DPI Backs Call for an “IP-Transition” in Telecommunications

By Sarah Herpst
Recently, the Digital Policy Institute (DPI) urged the Federal Communications Commission (FCC) to take prompt steps that will speed the transition of telecommunications to all-digital, Internet-protocol (IP) systems. To provide the FCC with better direction on how to do so, DPI’s FCC filing, submitted jointly with Kleinhenz & Associates (Kleinhenz), a Cleveland, OH, business economics consulting firm, recommended that a trial of all-IP systems be conducted in Muncie, IN. The home of DPI, Muncie, Indiana also has been the site, over an 80-year period, of major studies of American consumer, social and technology trends and transitions.
The DPI/Kleinhenz filing at the FCC was in support of a petition filed by AT&T entitled “Internet Protocol Transition Petition,” and in support of a similar petition submitted by the United States Telecom Association (USTA).

AT&T’s petition recommends that the FCC avoid using lengthy and unnecessary procedures when deciding how to transition from plain-old-telephone service (POTS) to IP-based service as the standard for the nation. Robert Yadon, director of the DPI and coauthor of the comments, pointed out that “this transition has already begun taking place. The problem, however, is with the bureaucratic mess that the FCC must contend with in order to complete the task.”

“AT&T was absolutely right to place these issues squarely on the FCC’s plate. With billions of investment dollars at stake, uncertainty exists today because the commission has failed to resolve the numerous proceedings pending before it that directly relate to the IP transition,” said Yadon. He added, “This will be an opportunity to directly address those who incorrectly believe that the provision of broadband is a natural monopoly by cable systems, or that today wireline broadband doesn’t compete with wireless broadband.”

In addition to the lag in the IP transition, the DPI/Kleinhenz filing, and the two petitions themselves, focus on needed reforms in the regulatory structure of the telecom industry. Current regulation, they contend, stifles innovation, poses disadvantages to private investment and treats differently competitors offering the same services. These points are further illustrated by regional economist Jack Kleinhenz, CEO of Kleinhenz & Associates and coauthor of the reply comments, who said, “We need to displace regulatory restrictions that are impediments to needed telecommunications infrastructure investments for the IP transition. Studies have shown that infrastructure is important and associated investments stimulate economic activity either by enhancing productivity or by direct contribution to economic output.”

Yadon and Barry Umansky, DPI’s chief legal counsel and co-author of the comments, gave specific support to the AT&T suggestion that telecommunications carriers engage in “regulatory trials” around the country, at specific geographic sites and under supervision of the FCC. Among other things, the aim of these trials would be to give the Commission the opportunity to observe how the transition actually would work and how it would affect consumers. Such trials also would give the FCC the experience needed to help it avoid the imposition of unnecessary regulation on the expanded IP-based infrastructure and its operation. Noting that Muncie, Indiana has been the site of the “Middletown Studies,” developing decades of data on social, consumer and media trends in “a typical American town,” the DPI/Kleinhenz filing recommends that Muncie be one of the sites for these national trials. This would better enable DPI to provide continuing and in-depth research in support of – and providing useful guidance on – the move to an all-IP telecommunications structure in America.

You can find the joint filing of DPI and Kleinhenz at http://www.bsu.edu/digitalpolicy