As the battle between cable providers and traditional telephone companies continues before federal regulators in Washington, a report issued Tuesday challenged old regulations that require companies such as AT&T to maintain copper-based legacy networks.
The report by industry analyst and scholar Anna-Maria Kovacs was issued by the Internet Innovation Alliance (IIA), a diverse consortium of 175 organizations that advocates for widespread broadband adoption. The alliance includes large companies like AT&T, some smaller carriers and nonprofit groups.
Among its findings, Kovacs' 45-page report found that only 5% of the nation's households rely exclusively on circuit-switched voice telecommunications over copper wires (commonly called POTS, for Plain Old Telephone Service). Meanhwhile, 38% of households rely on wireless communications exclusively and the remainder rely on a combination of wired and wireless services that include voice over IP.
Cable and traditional phone companies are battling over the same set of customers for Internet services that include video, social networking service and much more. Traditional phone companies are concerned they can't compete fairly because of regulations that they must spend billions of dollars providing a traditional wired network that only offers voice and slower data services.
IIA Honorary Chairman Rick Boucher, a former congressman, said in a conference call introducing the report that federal regulations require incumbent telephone companies to maintain their entire circuit-switched networks, even as wireless and other technologies have evolved. More than half of the $154 billion spent by those companies from 2006 to 2011 went for this "outdated network" based on copper, he said.
"Cable, by contrast, is not burdened by these regulations," Boucher said. "Freeing up the telcos would allow them to build ... and [they] would be a more vibrant competitor to cable."
Boucher stressed in a statement that federal and state policymakers "must modernize policies and create a level playing field for all competitors to invest and innovate."
Kovacs said the purpose of her report was not to make recommendations although she did endorse industry trials to convert circuit-switched homes and businesses to all-IP networks that would take place "in a few small controlled areas where we can retreat back to old technology if we need to." The IP platform would not have to run over wireless only, she said, but could be built on fiber or something like AT&T's U-verse service, which runs mostly over fiber with some copper in the final stretch to a home or business.
Over the past year, AT&T has urged the FCC to allow it to conduct trials in two cities that haven't been named.
On Sept. 24, AT&T CEO Chairman Randall Stephenson urged the FCC to move faster on AT&T's request for trials. AT&T has set a goal to build an all-IP, all-wireless, all- cloud network nationwide by 2020.
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