AT&T, Frontier talk to CPUC about future networks, without putting all cards on the table

by Steve Blum • , , , ,

The California Public Utilities Commission looked at telephone company plans to replace copper networks and plain old telephone service (POTS) with new technology at a workshop in San Francisco yesterday. Representatives from AT&T and Frontier Communications talked about some, but not all, of those plans, as I pointed out in the remarks I prepared, and mostly delivered, at the workshop…

The copper-to-IP transition involves three discrete but inter-related issues. Only two of those issues were addressed today.

The speakers from AT&T and Frontier talked about the benefits of replacing copper networks with fiber, and legacy POTS systems with Internet protocol technology. They did a good job of explaining the technology, the economics and the benefits that fiber and IP-based service brings.

Fair enough.

But they ignored the third issue, despite the fact that it is at the heart of their business strategy. It is at the heart of their plan to use federal and state subsidies to lock rural communities into substandard service at monopoly prices for decades to come.

That unspoken, third issue is the replacement of copper networks, largely paid for with public subsidies, with fixed wireless service, also paid for with taxpayer and ratepayer money.

Although AT&T’s representative ignored it today, the company has made no secret of its plans. It intends to replace copper networks with wireless local loop technology in rural areas, claim it delivers the minimum 10 megabits down and 1 megabit up speeds required by the California Advanced Services Fund and the FCC’s Connect America Fund subsidy programs, and pocket the cash.

Frontier has been less straightforward. Despite promising the CPUC that it was a “dedicated wireline service provider”, during the regulatory review of its purchase of Verizon’s California systems, it is now testing its own version of wireless local loop technology, and its executives are speaking of it of as a means of meeting their Connect America Fund obligations.

At best, the fixed wireless systems that AT&T and Frontier are developing can support broadband service that’s on a par with legacy DSL upgrades; service that’s priced, though, on a par with faster and more reliable copper and fiber-based service. And they want to use regulatory blessings obtained with promises of a fiber future to do it.

Today’s focus on IP technology and fiber networks was driven, in part, by the CPUC’s regulatory authority over voice service. But the CPUC also has a legislative mandate to bridge the digital divide in California and bring fast, reliable and affordable broadband service to all Californians. It also has a new responsibility to monitor AT&T’s and Frontier’s compliance with Connect America Fund commitments.

The CPUC should hold AT&T and Frontier to account for everything they do, not just those things they choose to talk about.