U'S' Telecom Policy

1
U.S. Telecom Policy

• CWA Presentation
• Debbie Goldman
• Chicago , Illinois USA
• August 23, 2005

2
Outline

• U.S. Regulatory Policy A Brief History
• Fiber Deployment by Major Wireline Companies
• U.S. Regulatory Policy Current Issues

3
U.S. Regulatory Policy. 1920s 1970s Private
Sector Regulated

• Private sector, regulated monopolies
• Bell system (ATT). One long-distance network
  local Bell operating companies cover 80 of
  population
• Smaller local network systems thousands of
  small local companies cover other 20 of
  population
• Regulation
• Federal regulation - long-distance service
• State regulation - local service price, quality,
  interconnection
• Universal service
• 1950. 50 telephone penetration
• By 1980s. 97 telephone penetration
• How?
• Price regulation. Cross-subsidies urban to rural,
  business to consumer
• Universal Service Fund. Subsidies to rural
  carriers and poor

4
U.S. Regulatory Policy. Before 1996Emerging
Competition Union Response

• Regulation
• 1970s. Competition enters long-distance,
  equipment markets.
• 1984. ATT Divestiture
• ATT. Long-distance, equipment manufacturing,
  research. Deregulation and competition in these
  markets
• 7 Bell local network companies. States regulate
  prices, quality, consumer protection,
  interconnection
• CWA
• 1935 Wagner Act. Company-dominated unions
  declared illegal
• 1947. CWA founded. Union growth accelerates
• 1974. CWA achieves national bargaining for
  400,000 ATT workers
• 1984. Government break-up of ATT. CWA expands
• CWA maintains industry pattern bargaining with
  national telecom councils bargaining for
  organizing rights expands.
• New wireless units.

5
U.S. Regulatory Policy.1996 Telecommunications
Act

• Opens local market to competition
• Bells must resell unbundled network elements at
  regulated rates
• Competitors can build their own facilities
• No regulation of competitors, but regulation of
  incumbent
• Bell companies can get into long-distance after
  local market is open to competition
• Universal Service Fund
• 2.25 billion program of subsidies to schools and
  libraries for Internet access
• Rural and low-income subsidies support telephone
  service, not broadband. Contributions to fund
  based on of long-distance revenue
• Prohibits rate regulation of cable, wireless
  services
• Wireless. Multiple networks competing
  technologies

6
U.S. Regulatory Policy. 1996 2005 More
Deregulation, Local Competition

• Local consumer market.
• Unbundling resale at below-cost prices. Bells
  lose lines to resellers refuse to invest in
  "last mile" fiber
• 2004. Courts reject resale and unbundling rule
  regulators exempt advanced networks from
  unbundling
• Bells announce "last mile" fiber build-out
• Long-distance market. Overcapacity. Price wars.
  Fraud. Bankruptcies. (MCI WorldCom)
• Local/long-distance mergers (SBC/ATT VZ/MCI)
• CWA gains broader organizing rights, employment
  security. With UNI, blocks MCI-Sprint merger

7
Fiber Deployment Plans Verizon

• Fiber to the home
• Current offer 5, 15, or 30 Mbps capacity up to
• 100 Mbps
• Now offered in 250 communities in 14 of Verizon's
  29 states
• Target 3 million Verizon homes by year-end 2005
  10-15 years to deploy everywhere
• 20-30 billion total investment (1,000 per home)
• Analysts worried about payback on huge investment
• Cable-like system. All channels delivered to
  set-top box in home. 300 digital TV channels plus
  video-on-demand, voice, Internet access

8
Fiber Deployment Plans SBC Project Lightspeed

• Fiber to the node, then copper wire last few
  thousand feet
• Capacity 20-25 Mbps
• Target 18 million, or 50 of SBC homes, by 2008
• 4 billion projected capital investment (250 per
  customer)
• IP-TV. Consumers request channel, delivered from
  server
• Analysts worry about untested Microsoft IP-TV
  software

9
U.S. Telecom Policy Challenges

• U.S. 16 in broadband deployment
• 29 million or 26 of households have "advanced
  services" (200 kbps in 2 directions.). Cable
  beating DSL 2 to 1
• Slow speeds
• No national broadband policy
• Digital divide
• Competing networks regulated differently. Cable
  and wireless not regulated, but wireline
  telephone is
• Voice over Internet Protocol (VoIP) competing
  over these multiple networks
• Conservative political climate and rapid
  technological change favor deregulation

10
U.S. Telecom Policy Today Voice over Internet
Protocol (VoIP) and IP-Enabled Services

• Federal regulators (FCC) have already decided
• Federal jurisdiction over IP-Enabled services
• VoIP carriers must provide Emergency 911
• To be determined. Will IP-enabled services/VoIP
• Contribute to Universal Service Fund (10 of
  revenue)
• Pay for use of network
• Meet other obligations of telecom carriers such
  as consumer protections, wiretapping, access for
  disabled

11
U.S. Telecom Policy Today Universal, Affordable
Service

• Universal Service Fund
• How to make it sustainable? Contributions from
  all carriers voice, data, local, long-distance
• Will it support broadband deployment and access?
• Universal broadband deployment
• How to encourage high-speed deployment and
  affordable access everywhere, especially
  high-cost rural and poor communities
• Options
• Tax credits, low-interest loans
• Deployment timetables
• Expand schools and libraries fund police, fire,
  etc.
• Universal Service Fund subsidies for broadband
• Require measurement of network speed and
  reliability
• State and local planning commissions aggregate
  demand
• Leverage funding in other public subsidies
  housing, health care

12
U.S. Telecom Policy Other Issues

• Economic regulation
• Video franchising
• Municipal networks
• Network neutrality
• Carriers cannot block consumer access to any
  website or end-user
• Consumers can attach any equipment to network

13
CWA Telecom Reform Policy UNI Framework

• Universal, affordable service
• Quality service, quality jobs
• Financial equity and transparency