Will Michigan IP Interconnection Decision be a Precursor for FCC?
January 28, 2014 | by Andrew Regitsky
It has received very little publicity, however a December 6, 2013 Order by the Michigan Public Service Commission (MPSC) may foreshadow the future of ILEC-CLEC ISP interconnection for the industry. The Order in Michigan Case Number U-17349 reversed the decision of an arbitration panel and required AT&T to interconnect with Sprint Spectrum (Sprint) on an Internet Protocol (IP) level as required by sections 251 and 252 of the 1996 Telecommunications Act.
The battle over ISP interconnection has become extremely contentious. The CLECs led by CompTel argue that the FCC could speed the IP transition and spur benefits to consumers by confirming that IP interconnection for voice services is governed by sections 251 and 252 of the Act. Without such a requirement, ILECs would be able to use their market power in interconnection negotiations to impose unfair charges on smaller carriers to complete calls and put them at a competitive disadvantage. Moreover, such charges would effectively negate the Commission’s intention to move the industry to bill and keep for all inter-carrier compensation
ILECs claim, however, that IP interconnection is occurring quickly and effectively without federal regulation and the FCC would best serve the industry by keeping hands off and letting the market operate as intended.
The FCC, for its part has failed to provide sufficient guidance. It has stated that it expects carriers to negotiate in good faith but it has failed to adopt actual rules. Thus lacking specific FCC direction, disagreements between ILECs and CLECs concerning IP interconnection are steadily increasing and state commissions are becoming involved.
The specific Michigan case arose from a dispute between Sprint and AT&T regarding Sprint’s request that AT&T interconnect on an IP level. Sprint argued that section 251 is technology neutral and is thus applicable to both Time Division Multiplexed (TDM) and IP interconnection. AT&T argued that a state decision would be premature since the FCC was already considering the issue. An arbitration panel agreed with AT&T that Michigan should not act without FCC guidance. However, the MPSC reversed the decision:
The Commission finds that the arbitration determination on this issue must be reversed. IP interconnection has become an important and prevalent form of interconnection in the telecommunications industry. TDM-based switching is declining, and the FCC has requested that incumbent local exchange carriers (ILECs) negotiate IP interconnection in good faith…AT&T Michigan alleged that the interconnection requirement of Section 251(c)(2) does not extend to IP-to-IP interconnection. This legal question is currently pending before the FCC in a rulemaking proceeding. However, in its recent further notice of proposed rulemaking, the FCC observed that, section 251 of the Act is one of the key provisions specifying interconnection requirements, and that its interconnection requirements are technology neutral they do not vary based on whether one or both of the interconnecting providers is using TDM, IP, or another technology in their underlying networks… Accordingly, the Commission finds that pursuant to Section 251(c)(2)(A), an ILEC, such as AT&T Michigan, not only must provide, for the facilities and equipment of any requesting telecommunications carrier, interconnection, but also IP interconnection, with the local exchange carrier for the transmission and routing of telephone exchange service and exchange access.(MPSC Order pp.4-5, 7, emphasis in original).
The FCC is planning on providing the details of the TDM-to-IP transition on January 30, 2014. It will be interesting to see if it will finally address the IP interconnection issue. Odds are that section 251 interconnection will be required.
By Andrew Regitsky, President, Regitsky & Associates
