Universal Service and ATT Trial

As discussed in our previous blogs AT&T Proposes TDM-to-IP Transition Trial posted 3/4/14, and Wholesale Customers and AT&T’s Proposed TDM-to-IP Transition Trial posted 3/5/14, AT&T has filed a proposal for a TDM to all-IP wire center trial in its Carbon Hill, AL and Kings Point, FL wire centers. Among other things, the proposal discusses in detail how AT&T will maintain the universal service status quo during the trial period. As such, it raises interesting questions about what eligible telecommunications carrier (ETC) obligations may look like in an IP-world.


Will AT&T Maintain Its ETC Status?


AT&T said it will maintain its existing ETC status and comply with all obligations arising from that status during the period it offers IP-based services only on a voluntary basis in the wire centers. However, “at an appropriate time before AT&T seeks to grandfather existing customers of TDM-based services, AT&T plans to file a request for relief from the ETC obligations in the trial wire centers effective on the first day of Stage 1 of the trials. In that request, AT&T will demonstrate how it will satisfy the universal access statutory objective in other ways, and elaborate on why such relief is appropriate.”


Why Does AT&T Believe It Is Not Necessary To Require It To Maintain ETC Status?


AT&T states, under the latest version of the FCC’s Connect America Model (CAM), almost the entire Kings Point wire center is ineligible for Connect America Fund Phase II support and many areas within the Carbon Hill wire center are similarly ineligible. AT&T argues that if the FCC determines that support is unnecessary to maintain universal access in these areas, it also should find that requiring a carrier to maintain its ETC status is unnecessary to protect the public interest. “Requiring AT&T to provide voice on a standalone basis in areas where it does not receive – and, under CAF Phase II, where it cannot receive – high-cost support, would distort the market…and preclude AT&T, but not its competitors, from offering voice only as part of a bundle with broadband Internet access and/or video services, or as an application provided over a broadband Internet access service.” AT&T said that, given the competitive marketplace, “there is no basis for limiting the way in which AT&T and other ETCs may structure their services if those limits do not apply to competitors as well — particularly in areas where the Commission has concluded that funding is unnecessary to support universal service.”


What About Lifeline Service?


AT&T also argues there is no reason to require it to remain an ETC in the trial wire centers solely to provide Lifeline. It notes that there are currently 19 other providers offering Lifeline in the Carbon Hill wire center and 7 providers offering Lifeline in the Kings Point wire center. Moreover, it will be offering unlimited local and domestic long-distance calling over its Wireless Home Phone service in the trial wire centers at rates that are typically less expensive than the amount AT&T’s Lifeline customers currently pay for traditional voice telephone services. Thus, “irrespective of whether AT&T provides Lifeline service, low income customers (and, indeed, other persons with unique needs, such as seniors on fixed incomes) will continue to have access to low cost voice telephone services in the trial wire centers.”


AT&T also notes that one of the objectives of the trials is to evaluate the effect the IP transition will have on customers. It notes that as broadband is ubiquitously deployed and adoption rates increase, voice is apt to become just another application that will be offered to customers. Thus, as the IP transition progresses, “there likely will be no business case for a wireline provider to offer voice on a standalone basis. Post-transition, to the extent that companies offer “standalone” voice, they are likely to do so only at prices that are approximately the same as the price for standalone broadband service, and there is no policy reason why the Commission should compel AT&T to do otherwise during the experiment.”



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