In 1996, the FCC changed the face of our industry forever by opening the local telephone market historically dominated by incumbent local exchange carriers (ILECs) to competition. It accomplished this through the 1996 Telecommunications Act (Act) by requiring ILECs to interconnect with other telecommunications providers called competitive local exchange carriers (ILECs) so these competitors could reach consumers and businesses. Specifically, the Act created certain requirements for all local exchange carriers:
Section 251(a) sets forth the most important requirement, imposing on all “telecommunications carriers” the duty “to interconnect directly or indirectly with the facilities and equipment of other telecommunications carriers.” This obligation is to be “technology neutral.” VoIP providers may also obtain access to interconnection with the local exchange network through competitive carriers.
Section 251(b) sets forth duties for all LECs, rules requiring resale of services, number portability, dialing parity, access to rights-of-way, and reciprocal compensation.
Section 251(c) sets forth additional detailed obligations that apply only to incumbent LECs.
Section 251(c)(1) requires incumbent LECs and telecommunications carriers requesting interconnection to “negotiate in good faith in accordance with section 252 the particular terms and conditions of agreements” to fulfill the section 251(b) and (c) requirements.
Section 251(c)(2) imposes on incumbent LECs the duty to provide, for the facilities and equipment of any requesting “telecommunications carrier,” direct interconnection with its network “for the transmission and routing of telephone exchange service and exchange access” at “any technically feasible point within the carrier’s network” that is at least equal in quality to that provided by the LEC to itself or its subsidiaries, on rates, terms, and conditions that are just, reasonable, and nondiscriminatory.
Section 251(c)(6) imposes on incumbent LECs the duty to provide for “physical collocation of equipment necessary for interconnection or access to unbundled network elements at the premises of the local exchange carrier,” on rates, terms, and conditions that are just, reasonable, and nondiscriminatory.
Unfortunately, as technology changed, telecom rules have not changed, and as the Commission notes it has never applied section 251(c) to VoIP networks, and even today ILECs are not required to offer direct interconnection under section 251(c)(2) for VoIP traffic. Moreover,
Interconnection is further complicated by the technical reality of today’s networks. The Act defines “Interconnected VoIP” as a VoIP service that, among other things, “[p]ermits users generally to receive calls that originate on the Public Switched Telephone Network [(PSTN)] and to terminate calls to the [PSTN],”31 meaning that a VoIP call may traverse both IP and TDM portions of the network via interconnection with the legacy PSTN. As a result, an incumbent LEC’s network might carry VoIP originated traffic over TDM trunks, and competitive LECs often deploy media gateways to convert IP voice packets to TDM format (and vice versa) for interconnection with incumbents. (FCC Docket 25-208, Draft Notice of Proposed Rulemaking, para. 10).
These interconnection rules are holding back the transition to an all IP network. The agency states,
Only a small fraction of consumers today subscribe to legacy stand-alone copper-based voice service, and many providers already rely on packet‐based IP networks to deliver high-speed voice and data services. And yet, despite increasingly widespread adoption of IP technology by consumers and businesses, our current interconnection regulatory framework for local voice service has delayed the promise of ubiquitous next-generation networks. The Commission’s incumbent LEC-specific interconnection requirements—mandated under the Telecommunications Act of 1996 to promote competition—force providers to maintain costly, outdated infrastructure installed across the nation to ensure interconnection with other carriers using legacy time-division multiplexing (TDM) equipment. (Id., at para. 1).
To jump-start the adoption of a nationwide IP network, the FCC is planning to release a Notice of Proposed Rulemaking (Notice) in Docket 25-208 at its upcoming August meeting whenever it is held. This Notice will seek industry comments on the following topics:
What is the current state of TDM and IP interconnection for voice services?
A proposal to forbear from the interconnection and related obligations imposed on incumbent LECs under sections 251(c)(2) and (c)(6) of the Telecommunications Act, and the Commission’s rules implementing those provisions by a sunset date of December 31, 2028.
Whether and to what extent eliminating the incumbent LEC-specific interconnection regulatory framework may affect other statutory frameworks or Commission rules, and whether the Commission should revisit any other provisions or rules that are rendered redundant by the elimination of incumbent LECs’ interconnection obligations in section 251(c)(2).
What, if any, regulatory framework for IP interconnection should replace the current interconnection framework under section 251(c)(2), and on the scope of the Commission’s authority to regulate IP interconnection under any such framework.
Ways the Commission can facilitate a successful transition to all-IP interconnections for voice services while retaining critical oversight in areas of public safety and consumer protection.
Finally, the Commission notes that it intends to address issues related to tariffing and access charge requirements stemming from the legacy TDM framework in separate future items.
Industry comments will be due 30 days after the Notice appears in the Federal Register. Reply comments will be due 30 days later.