Confronting tough questions about carriers of last resort
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Confronting Tough Questions About Carriers of Last Resort. Ellen Blackler February 20, 2008. The Context for AT&T: AT&T is a Major Provider of Service to Rural America. AT&T serves 25% of all rural lines in the United States – 7.5 million lines.

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The context for at t at t is a major provider of service to rural america l.jpg
The Context for AT&T:AT&T is a Major Provider of Service to Rural America

  • AT&T serves 25% of all rural lines in the United States – 7.5 million lines.

  • AT&T serves more rural customers than any other company.

  • AT&T’s commitment to rural America is strong, but regulatory policy must be reformed to allow us to transform that commitment into a modern communications network.


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Traditional COLR is No Longer the Best Way to Ensure Ubiquitous Service

  • Existing rules can act to constrain a provider’s ability to use new technologies to serve hard to reach customers, driving up costs.

  • Two Prong Approach to Change

  • COLR should be transformed to a flexible, technology neutral service obligation allowing providers to use all available technology tools to provide access.

    • Eliminate it where there is competition.

    • Support it where it is high cost.

  • Promote network investment by – you guessed it – finally addressing implicit subsidies in access, and reforming universal service policies.


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Flexible Service Obligation Ubiquitous Service

OBJECTIVE:Transform the existing COLR requirements to a flexible service obligation to provide core functionality with the most efficient technology. Where robust competition exists, eliminate COLR entirely

  • Most consumers today have a variety of choices over a variety of technologies – cable, DSL, wireless, POTS, etc.

  • Regulators have recognized the competitiveness and established the competitive classification process to determine when regulation is no longer necessary to protect consumers from price increases.

  • Those same competitive forces mean that COLR is no longer necessary – providers have every incentive to make sure consumers have ample offerings to meet the range of consumer needs.


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Flexible Service Obligation Ubiquitous Service

  • Define service obligation in terms of the core functionality (access to the PSTN, emergency service, operator service, directory assistance, and 711, 8YY, directory listing, lifeline).

  • Eliminate it where there is competition.

  • Where costs of meeting the obligation are high, support to a SINGLE provider should be made available.

    • There could well be pockets of high cost areas in a region otherwise competitive. For these areas, an optional service obligation, supported by universal service, would be created and offered to a single provider who would guarantee service in exchange for the support.


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Promote Network Investment Ubiquitous Service

  • Funding mechanisms need to promote network evolution and the deployment of advanced services that consumers increasingly rely on without jeopardizing access to basic voice services.

  • Programs to provide one time subsidies to a single provider to deploy infrastructure where it is inadequate should be considered.

  • Subsidies in intrastate access need to be removed.

  • Need to provide rate flexibility for rates in high cost areas.


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Current State Developments Ubiquitous Service

  • Laws amended to allow COLR obligation to be met with any technology, and protects that technology from the full range of state regulation.

    • Texas, Nevada

  • Adjust line extension obligations to reflect presence of competitors.

    • Mississippi Legislation – line extension requirements do not apply when there is an alternative provider to the premise, or where the incumbent is prohibited from serving.

  • Activity related untangling the damage caused by exclusive access arrangements.

    • Exclusive access arrangements are bad for competition and customer choice – for video, internet or voice.

    • Sticky problems arise where exclusive access arrangements exist for some services like internet access, but COLR for voice remains.