Five Fundamentals for the Phone Network, Part 2: Interconnection and CompetitionMarch 7, 2013
Last week we started unpacking Public Knowledge’s proposed Five Fundamentals to guide the upgrade of our phone network to an IP-based infrastructure. First, we explained the importance of providing basic phone service to everyone in the country, regardless of the protocols used to deliver that service.
This week, we’ll focus on the continued need for interconnection and competition among phone service providers.
Interconnection requirements make sure that different phone networks connect with each other, so users can place a call to anyone else with a phone number, no matter which phone company the person being called uses. Interconnection has become a critical tool for developing competition among carriers—after all, if a smaller carrier couldn’t guarantee that you’d be able to use its service to call your friends, family, and business contacts, you would always need to buy service from the biggest carrier in order to be able to place the calls you want. As a result, the largest companies would only get bigger and bigger, leading to fewer choices and higher prices for subscribers.
In contrast to the phone network, we sometimes see disputes in the markets for internet or subscription video services that disrupt service for customers. For example, a retransmission dispute between NBC and AT&T could result in U-Verse customers losing access to NBC programs. We tend to view these things as inconvenient and costly to consumers, but not total disasters. But if these kinds of disputes between companies start to impact basic phone service, users will lose the ability to call for emergency services, contact loved ones, or conduct daily business with no notice. Phone service is simply too important to risk this kind of disruption in the network, so we require all phone companies to deliver calls to and receive calls from other carriers.
Interconnection policy especially impacts high-cost areas where carriers have less financial incentive to make sure that all calls go through. Complaints that calls to or from rural areas aren’t being delivered by carriers have even recently led the Federal Communications Commission to contemplate new reporting requirements to understand the scope of the problem and its causes (including the transition to IP). Without adequate interconnection requirements, these complaints could be a warning sign of things to come in the post-transition phone network.
Competition policy for our phone network also includes things like local number portability (LNP) rules, which enable customers to keep their phone numbers when switching between carriers. By making it easier to switch between carriers, these rules promote competition in the marketplace, leading to lower prices and better service.
For most of these issues, any steps the Commission has taken to apply rules or requirements have been based on the Commission’s authority over the pre-transition, TDM-based phone network. But even after that network fades away, the need for phone service that reliably reaches every other point of the network and the benefits of competition in the market will still exist. That is why federal, state, and local regulators must make sure their policies continue to ensure competition and interconnection in the phone network, regardless of what specific technology the phone network uses.