By Deborah Taylor Tate
We are indeed already in the midst of the IP transition, as Free State Foundation Legal Fellow Sarah Leggin recently discussed in a May 5 Perspectives from FSF Scholars. Consumers have been increasingly abandoning traditional wireline telecommunications services in favor of next-generation alternatives. So far, the Federal Communications Commission has allowed the transition to occur organically and has refrained from imposing unnecessary conditions or regulations on the process. But now there is a role for the Commission to play in promoting the technological transition to IP-based services. The FCC should support the IP-transition by removing outdated rules, promoting universal service and network reliability through Lifeline and the Lifeline Broadband Pilot Program, responding quickly to issues that arise, and curbing unnecessary spending in programs that help achieve core Commission values.
Incredible investment and innovation is already moving the communications sector toward an all-IP world. As Ms. Leggin noted in a September 25 Perspectives, AT&T and Verizon ranked in the top five “U.S. Investment Heroes of 2013,” together investing $34.5 billion in 2012. Further, the telecommunications and cable sector was responsible for $50.5 billion of investment, comprising more than one-third of total capital investments in the U.S. economy for 2012. These and other investments have allowed companies to deploy new technologies, upgrade and build-out new networks, and move the IP transition forward. And consumers are rapidly adopting new services and innovations.
I remember introducing the concept of VoIP—voice over Internet protocol—to policymakers and legislators in 2000. Incredibly, here we are in 2014 with most of us already utilizing IP for most every type of communication possible, whether connecting across town or around the globe. At the end of June 2013, there were 158.7 million VoIP subscribers globally according to Point Topic’s latest quarterly report. The U.S. accounted for 35 million of those subscribers, making the U.S. a VoIP leader in the international community. Additionally, nearly two-thirds (65.6%) of adults ages 25-29 in the U.S. lived in households with only wireless phones, as did three-in-five (59.9%) 30- to 34-year-olds and a majority (54.3%) of adults ages 18-24, according to a 2013 Centers for Disease Control Wireless Substitution Survey.
While this incredible investment, innovation, and adoption of new services is exciting, it is important to pause and make a few observations.
As Commissioner Pai recently stated, consumers, engineers, technological innovations, and corporate investment have been moving the transition along at a steady pace, but it is important that the FCC now take steps that further encourage the IP transition. These include "the repeal of many outdated rules on our books based on the principles of 19th century railroad regulation." I agree with Commissioner Pai that the FCC should continue to apply a light regulatory touch, while also removing any regulatory roadblocks that threaten to slow the pace of the IP transition. This approach will allow the free market to continue to drive technology toward an all-IP ecosystem.
Second, our poorest citizens who are most in need of assistance in emergency response, healthcare, or access to information regarding jobs, are those who have cut the cord most quickly. These low-income individuals and households depend on a smooth and seamless transition to a wireless or all-IP world. Ensuring that communications service remains available and reliable for these low-income consumers is perhaps the most important role for the FCC throughout the IP transition. Although the competitive broadband marketplace and the steady transition to all-IP services, for the most part, does not require regulatory intervention by the Commission, the Lifeline program can provide subsidized service to eligible low-income consumers to provide a universal service backstop in the IP-world.
I am very pleased that the FCC took the forward-thinking position of expanding Lifeline to include mobile broadband through its recently launched Lifeline Broadband Pilot Program. The voluntary experiments authorized under this program will help bring mobile broadband to low-income consumers, and will also provide information that the Commission can use to improve and modernize the Lifeline program to better serve those in need. The test results will be used to determine pricing and service offerings for Lifeline broadband plans that meet the needs of citizens living in poverty and struggling with unemployment. The tests will also help chart a course for how to deliver public safety information and connect first responders with non-English speakers and consumers with disabilities. The Lifeline program can play an important role in ensuring that positive new developments in mobile health care delivery are available to low-income persons. In other words, use of the Lifeline program provides a positive example of how to determine and meet consumer demands in a changing communications landscape, especially the demands of those who may need a lifeline most.
Third, the FCC must be vigilant in order to detect specific problems that occur during the transition away from legacy networks. The Commission must be ready to shine a light on issues and demand a swift response and corrective action. Commissioner Pai did just this when he brought to light the death of a child due to a lack of understanding regarding 911 calls from inside a hotel. He called for the Commission to immediately address 911 indoor location accuracy issues, which have arisen as consumers increasingly rely on wireless service to reach emergency responders. As these and other issues associated with the transition from traditional landline to wireless or VoIP services arise, the FCC and service providers need to be ready to resolve these problems swiftly.
Finally, the FCC must remain focused on ensuring that universal service programs are executed efficiently and effectively, and without waste, fraud, or abuse. Although technology may change, the FCC should still base its approach to the changing communications landscape on the same core values upon which the Commission was founded. The Commission should continue to promote values like consumer protection, universal service, and network reliability in the mobile wireless and new IP-based communications era and beyond.
I have always been a strong supporter of the concept of universal service. However, universal service programs must be constantly reviewed in order to determine what support is truly necessary, modernized so that programs keep up with constantly evolving technologies, and monitored to ensure that programs are actually helping to achieve core goals as efficiently as possible. As Commissioner O'Rielly stated while approving the initiation of the proceeding to conduct service-based trials, "the order makes clear that the experiments will not delay universal service reforms established in the 2011 order. Indeed, the item commits to implementing key parts of Connect America Phase II and to addressing the challenges of providing service to remote areas by the end of this year." Yet he properly cautioned: “I support universal service and want to ensure that all Americans have access to modern communications networks. But, as contemplated, I am concerned that these new experiments have the potential to divert universal service funding and distract the Commission from completing universal service reforms already adopted.”
Detractors of universal service programs have always been concerned about the "telephone tax" that consumers see every month on their phone bills. Those concerns and other criticism will heighten if the FCC does not also remain focused on the fiscally responsible execution of universal services programs. The Commission still needs to reform the USF program by capping the high-cost fund, reducing available subsidies, establishing a sunset period for ending high-cost fund subsidies, and curbing waste, fraud, and abuse of the Lifeline program. And I agree with Commissioner O'Rielly that the technology transition trials and other pilot programs have the potential to unnecessarily divert Commission resources away from existing programs that need support. The FCC must continue to appropriately fund the programs that are truly necessary, like Lifeline, and should continue reform efforts so that the so-called "telephone tax" doesn't become an "IP-transition tax." I hope Commissioner O'Rielly continues to be the cop on the beat on these cost issues so that both providers and customers can reap the benefits of a modern communications ecosystem while paying only what is necessary.
Americans at every income level are leading the way toward an all-IP world. By cutting the cord, choosing wireless over wireline, and adopting broadband services, citizens are moving markets and marketplaces. The FCC should keep its eyes – and its regulatory tools – focused on ensuring services to our neediest citizens during the ongoing IP-transition, promoting core values such as universal service and public safety, and supporting the transition with "light touch" oversight. Doing so will allow rapid innovation to continue, competition to flourish, and consumers to propel the IP-transition forward.