The FCC’s Plan to Gut Tech Transitions Rules Is Bad for Consumers, Small Businesses and Competition

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In April of this year, the Federal Communications Commission began a wireline infrastructure proceeding designed to accelerate broadband deployment. The proceeding contains multiple proposals to remove barriers to broadband deployment and infrastructure, such as reforming pole attachment rates and preempting state and local laws.

Buried within these proposals is a plan to eliminate “tech transitions” rules, which outline the responsibilities of phone carriers when they choose to retire copper networks or discontinue service. The Commission adopted the rules in 2015 after finding that certain technologies such as home alarms, medical devices, and fax machines that plug directly into the copper network wouldn’t work once a carrier transitioned its copper network to a fiber or wireless network.

The tech transitions rules require carriers to give their customers, competitive carriers, and other relevant public agencies 180-day advance written notice prior to making network changes that would affect the service they offer. The notice must advise consumers of any secondary effects of the network change, such as potential impacts on 911 systems, credit card readers, and other business equipment, as well as impacts to competitors who utilize infrastructure owned by legacy phone companies. The rules also require carriers to get permission from the FCC prior to replacing their customers’ copper lines with other technology. The rules ensure that when a carrier decides to discontinue its landline service and replace it with another technology, everyone in the service area has access to an adequate substitute service that is measured by a standard criteria including voice quality, network reliability, and access to 911 systems.

The FCC is seeking to eliminate these rules by shortening the notice period for copper retirement and removing the requirement that carriers must consider what impact their network changes will have on other technologies. In other words, the FCC is now acting to enable carriers to quickly abandon copper services without considering the consequences for communities. But what is worse, rather repeal these rules directly, the FCC has decided to hide its intent behind a “technical” change in definition.

The FCC Rollback Of Vital Protections

Federal law (47 U.S.C. 214(a) & (c)) states that before a telecommunications provider may “discontinue or reduce or impair service to a community,” it must prove to the FCC that the discontinuance, reduction or impairment will serve “the public convenience and necessity.” That seems fairly straightforward. As we argued (and the FCC majority found), the plain reading of the statute means that you have to show that a community has a service as good as the discontinued service. The FCC calls this the “functional test,” does the replacement service function enough like the old service that consumers or local businesses aren’t hurt by the change.

The telephone companies argued that “service” did not mean the general telephone service, but only the parts of the service covered in the official tariff filed with the FCC. A tariff, for those unfamiliar with the term, is a very basic description of what the carrier offers and at what rate. It does not cover, for example, things that the FCC rules separately require the phone company to offer (such as 911), or things that consumers depend on that have traditionally worked with the phone system (like medical monitoring systems). Nor does the tariff describe things like voice quality. Under the carrier’s reasoning, as long as some sort of long distance dial tone is available in the area, “service” is not impaired and the carrier can turn off the copper line.

As a commissioner, Pai sided with the carriers. Now that Pai is chairman, he has sought comment on whether to eliminate the “functional test” and instead use the “tariff test.” Changing from the functional test to the tariff test would effectively gut the protections adopted by the FCC in 2016 without changing the rules by lowering the standard from “service of comparable quality and functionality” to “some kind of dial tone.”

The Proceeding So Far

As part of the proceeding, the FCC accepted comments from interested parties including consumer groups, competitive carriers, and legacy phone companies. Consumer groups representing diverse parts of the nation such as the elderly, minority and low-income groups, rural Americans, and those with disabilities all filed comments explaining why rolling back the tech transitions rules harms these communities. Competitive carriers also filed in support of the current rules in order to promote competition in the broadband marketplace. However, a handful of legacy phone companies, including Verizon, AT&T, and CenturyLink, continue pushing the FCC to eliminate the rules.

After two rounds of comments, the record is clear that the FCC’s plan to gut the tech transition rules is a bad deal for consumers, small businesses, and competition. Here’s why.

Many Communities Still Depend on Copper Networks

Copper networks have served as the backbone of America’s communication system for decades. Even though we are rapidly transitioning to fiber and wireless networks, about 48 million Americans still rely on copper-based voice services and about 28 million rely on copper-based broadband services provided by the legacy phone companies. In addition to traditional phone services, the copper network is the connective tissue for many third-party services such as fax machines, home alarms, and medical alert devices that consumers and small businesses use every day. Copper networks also maintain functionality during power outages, a feature fiber-based networks lack.

Several communities in particular still depend on the traditional copper phone line for services. For example, in many rural and low-income communities, the copper network is the only reliable and affordable service for voice and broadband. Historically, carriers have not invested in deploying next generation technologies to these communities or will often digitally redline them because they are unlikely to generate profitable returns. For elderly communities, the telephone is still a lifeline not just to communicate with loved ones but to also operate medical monitoring systems. Consumers with disabilities rely on copper-based text telephone (TTY) devices such as video relay services that are necessary for them to communicate. Many small businesses rely on the traditional phone network to conduct credit card transactions or send and receive faxes.

Eliminating the Tech Transitions Rules Puts Consumers and Small Businesses at Risk

The FCC adopted the advance notice rules for copper retirement to ensure consumers and small businesses receive accurate information about their change in service and had enough time to adapt. Without advance notice of copper retirement, consumers and small businesses are often left confused about what services they have. For example, several Verizon customers filed complaints with the New Jersey Rate Counsel after the carrier announced it was transitioning its copper network under the FCC’s prior short-term notification rules. Customers expressed concern over whether they or their small businesses would continue to receive service, if they would be affected by power outages, and if third-party equipment such as their medical devices would still work.

We’ve also seen the dangers of not providing advance notice when Verizon decided to replace its copper network on Fire Island, New York with wireless services. The wireless network didn’t work with a range of third-party services and couldn’t even complete 911 calls, sparking massive consumer outrage. The lessons from Fire Island also resulted in the FCC adopting the current service discontinuance rules, where phone companies must get permission prior to discontinuing landline service. In granting permission, the FCC adopted a ‘functional test’ where phone companies have to consider what impact changing their service would have on a community they serve. These rules not only ensure consumers and small businesses will have access to critical services after discontinuance but also ensures communities will have a voice in the tech transitions process.

Eliminating the Tech Transitions Rules Hurts Competition

Eliminating the copper retirement notification rules would also negatively impact competition in the broadband marketplace. Competitive carriers interconnect with legacy copper networks in order to provide service to their customers. Part of the reason the tech transitions rules were created was to give competitive carriers enough time to engage their customers on how changes in the network will affect their service. Without the rules, consumers and small businesses relying on competitive carriers may see a disruption or loss in their service. In a market that is increasingly consolidating, consumers and small businesses need competitive and affordable options offered by competitive carriers.

The Tech Transition Rules Are More Important Now Than Ever

The Commission’s tech transition rules are even more important now that more and more states are passing legislation allowing phone companies to discontinue their copper service. Just recently, Illinois passed an AT&T-supported bill allowing incumbent phone companies to end traditional landline phone services. In fact, AT&T has lobbied for similar legislation that's been passed in 19 of the 20 states where it serves as the incumbent phone company. With more and more states passing legislation allowing incumbents to discontinue service, the FCC’s tech transition rules become a last line of defense for consumers, small businesses, and competitive carriers.

The legacy phone companies claim that gutting the copper retirement rules would remove unnecessary burdens on them in order to spur broadband deployment. However, they fail to provide any evidence that eliminating the copper retirement notification and discontinuance rules would actually accelerate broadband. Instead, they simply call for an elimination of the rules given their “burdensome” nature. The FCC also fails to offer any cost-benefit analysis or other substantive evidence to support its plan to remove the tech transitions rules.

Conclusion

As we’ve seen from all of the groups that filed comments with the FCC, eliminating common-sense notification rules would impact consumers, small businesses, and competitive carriers, particularly the nation’s most vulnerable communities.

The transition to next-generation network technologies will bring a variety of benefits to Americans, but we must make sure that it’s an upgrade for all of us and not an upgrade for some and a downgrade for others. The FCC’s core mission -- consumer protection, local choice, competition, and public safety -- demands nothing less.

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