Shutting Down the Phone System: Comcast’s Very Scary Filing

I’ve been sorting through the various filings at the FCC in the Phone Network to IP transition docket. I single out the 7-page filing by Comcast as the filing that scares the absolute bejeebers out of me.


Why? Because everyone else – no matter what their financial interest or political alignment – at least paid lip service to the idea that we ought to have some kind of regulation. Whether it’s a general nod to a “minimal and light touch regulatory regime” or a specific shopping list, the vast majority of commenters recognized then when you have something as big, complicated and utterly essential to people’s lives as the phone system, you need some kind of basic backstop for people to feel comfortable and to address problems that will invariably come up. Even AT&T has made it utterly clear that it does not see the future of phone service as a regulation-free zone.” Even staunch free market conservatives such as TechFreedom and Free State Foundation acknowledge that, as a practical matter, there is going to need to be some set of rules – even if they hope to keep these rules to what they regard as the barest minimum necessary.


Comcast, and Comcast alone, suggests otherwise. Comcast alone thinks we can manage the phone system as the Libertarian Nirvana. This smacks either of unbelievable hubris (“we’re so big everyone will have to deal with us – what could go wrong?”) or an incredible sense of market power (“we’re so big everyone will have to deal with us – heh heh heh”). Either way, this sends chills down my spine, because the filing signals loud and clear that Comcast – one of the largest providers of residential phone service in the United States, the largest residential broadband provider, and the single most powerful entity in U.S. telecom policy – simply doesn’t get it when it comes to the future of the phone system.


As I explain below, Comcast needs to understand that “With Great Market Share Comes Great Responsibility.” Because when you are this big, even what you don’t say can have huge consequences. Comcast is beyond “too big to fail.” It is now officially in its own regulatory category called “too big to be allowed to screw up.” Because Comcast is now so big, and so central to communications in the United States, that it could single-handedly crash the phone system by stupidly trying to manage it as if it were the cable world. Unless Comcast gets with the program and acknowledges the need for some kind of ongoing oversight of the phone system, this transition is guaranteed to become an utter disaster.


The thing that everyone else recognizes, and Comcast apparently still doesn’t, is that the phone network has to work for everyone, including places Comcast doesn’t serve and doesn’t want to serve. It’s sad that Smalltown in the middle of Flyover Country doesn’t have broadband, unless they can find a convenient McDonalds or Starbucks. Without broadband, these places miss out on our digital future. But if their phone connection stops working, they crash and burn now. We depend on the phone for 9-1-1 access, for human contact, for essentials of commerce so deeply embedded in our economy that we don’t even think about the possibility of it going wrong.


But it’s not just that the phone system is insanely important. It’s also insanely complicated. Uncounted thousands of transactions happen regularly, facilitated by the fact that there is a well-understood and fairly stable framework in place to cover most contingencies, and some well understood cultural sensibilities about not screwing up so badly it attracts regulatory attention. Yes, managing Internet service is also complicated. But the Internet developed in a “best efforts” environment where folks learned how to cope with complication through a variety of mechanisms – including accepting that the network was simply not that inherently reliable. Those coping mechanisms generally do not work for the phone system, because the phone system was designed with the expectation that it is fundamentally reliable, not simply “best efforts.” Comcast apparently believes you can totally upend that system and have it work just fine – at least for Comcast.


Which brings up the next thing Comcast apparently doesn’t get. Because this is a network, what gets screwed up elsewhere will eventually get screwed up for Comcast — with no guarantee that when the bits hit the fan Comcast will be able to fix it. On a network as interconnected as this one, your problems eventually become my problems and everyone else’s problems, which is why having some basic rules set in advance and having an agency with the authority to deal with a massive failure of any kind is rather important. Because when the badness goes down, you are not going to be able to magically fix it — even if you are the Great and Powerful Comcast.


I get that for Comcast, their filing makes total sense. If you’re Comcast the current world work perfectly, therefore any change would have to be for the worse. When you are a happy  pig in mud, you worry that the slop will stop coming in, not where your waste flows out. Besides, this is just opening days on a long process. Conventional Comcast wisdom holds that you start with TOTAL SCORCHED EARTH CRUSH YOUR OPPONENTS, then work back to what you can get away with.


We Already Have Problems – At Least For Rural Phone Service


Unfortunately, we already have problems as a result of the IP transition. Odds are good that if you are not one of the small percentage of Americans impacted by this issue, you have never heard of the “rural call completion problem.” To provide the short version – as a result of the IP transition, the phone network is starting to unravel at the edges. Calls from urban areas to rural areas are increasingly not going through. Somewhere in the routing of IP packets and translation of this to the traditional TDM-telephone technology,  enough latency and packet loss slips in so that calls stop working. The FCC thought it knew the cause of the problem, something called ‘least cost routing,’ and addressed it in 2012.


But it turned out that simply reminding carriers they are required to complete phone calls didn’t solve the problem. In fact, because we have zero reporting requirements and zero information about the IP-based phone system, the FCC discovered it had no friggin’ idea why the phone system was starting to unravel at the edges, who to hold responsible, or how to stop it.   The FCC responded last week, rather sensibly and unanimously, by releasing a Notice of Proposed Rulemaking (NPRM) on Rural Call Completion. The NPRM proposes a bunch of reporting requirements on providers of voice services – whether IP-based or TDM – that would allow the FCC to trace how calls get routed and figure out the problem. The FCC also made it clear it would order providers to make sure calls go through to rural areas, and that the most onerous reporting requirements would phase out as phone service to rural areas became more reliable again. This proposal got a 5-0 vote, with even the Republicans noting that making sure that calls go through everywhere in the country is absolutely at the core of the FCC’s responsibility.


In the world that Comcast envisions, however, the FCC would do absolutely nothing – because it would not have any authority to deal with the rural call completion problem. After all, the rural call completion problem is a consequence of the IP transition. It can only be resolved by requiring IP-based call providers to keep records, make reports, and complete a call to the destination of the subscriber’s choosing regardless of whether Comcast actually wants to take the necessary steps to ensure the call goes through. As noted above, from Comcast’s perspective, the cost of allowing the FCC to exercise such jurisdiction over VOIP providers such as Comcast (in the absence of “ancillary jurisdiction” arising from the soon-to-be-extinct TDM-network) is simply too great. By contrast, the cost to Comcast of rural Americans of not having a functional phone service ranges from non-existent to an upper range of barely noticeable.


I want to emphasize that Comcast is not necessarily causing the problem. Nor does Comcast hate rural America. Heck, all things being equal, I’m sure Comcast would love to see rural folks get all their calls. But it’s not Comcast’s problem, so Comcast  doesn’t really care (certainly not enough to incur any additional expense or acknowledge any FCC authority). Comcast’s footprint is entirely urban/suburban. Sure, some small percentage of Comcast customers get frustrated when they can’t call a bed & breakfast in a small town in Vermont or can’t call home to Nowhereville, TX (population 150) on Mother’s Day. But that is such a tiny portion of their overall call volume that Comcast doesn’t even notice.  To the extent the customer notices, s/he blames the rural provider, not Comcast. After all, all the other calls the subscriber makes with Comcast’s system go through just fine.


So the rural call completion problem does not bother Comcast in the slightest; Comcast therefore has no incentive to accept cost to fix it. By contrast, actually keeping records on call routing is a very big deal to Comcast. It’s not really the money and inconvenience (although obviously Comcast would rather not spend the money or be bothered so it can complete 5-10 calls to Nowhereville a month). Comcast’s big worry is that this means regulating voice-over-IP, which uses Internet protocols, and therefore such a regulation is perilously close to – gasp! – regulating its Internet access and transport services! Imagine if we blew away the magic IP pixie dust that repels regulators and made IP just one more technology for moving voice around? From Comcast’s perspective, that cannot be good. Ever.


So as between making sure folks in rural America get reliable phone service versus acknowledging the FCC needs to retain some authority over the IP-phone network, the rational Comcast reaction is: “Sorry rural America, we regard you as acceptable collateral damage to keep us regulation free – sucks to be you.”


Perhaps you, oh gentle reader, may share Comcast’s conclusion that what happens in rural America is not your problem. Consider this, then. The phone network is a network, and problems are going to continue to proliferate. What we have right now is just the beginning of the unraveling around the edges. Eventually, the inability of providers to fully track call routing, the growth of routing tables, and the additional latency and packet loss this will cause, will work its way back into the system to impact more populous areas. By the time even Comcast is willing to admit that something might go wrong, however, we will be in the telecom equivalent of the financial meltdown. Frankly, I’d rather avoid that.  But I understand why Comcast — the Goldman Sachs of Telecom — doesn’t think that can happen and therefore considers elimination of FCC authority over the IP-based phone system worth the risk.  


Why Do We Care What Comcast Thinks?


So if Comcast is the lone, whacky outsider, why do we care what Comcast thinks, especially at this early stage?  Part of the problem, of course, is that Comcast has such total mind-control over some of its subsidiaries in Congress and at the FCC that the failure of Comcast to acknowledge that any form of regulation might be necessary in an all-IP world utterly resolves the matter for them. You know how some people resolve the tough questions by asking “what would Jesus do?” There are regulators and legislators who resolve policy by asking “what would Comcast want me to do.” It doesn’t matter if rural people can’t call 9-1-1. The fact that Comcast has not given them permission to exert authority provide reliable phone service to rural America is what matters. If Brian Roberts told these people “bark,” they would be on the phone the next morning making appointments with vets for rabies and distemper shots.


For starters, therefore, it’s necessary for Comcast to give its legislative and regulator zombies permission to keep America on the phone grid before this becomes too much of a problem. Yes, there are plenty of folks at the FCC and in Congress who actually can make a decision without permission from Comcast, but there are enough who can’t that permission from Comcast to keep the phone system from getting all buggered up would be reassuring.


But I have another reason why I personally find Comcast’s filing, and the attitude behind it, so scary.  My nightmare scenario is Comcast decides it won’t interconnect with someone unless it gets paid what it thinks access to its 10 million voice subscribers is worth – because that’s how things are done in the cable world. But this isn’t the cable world, where Comcast holding up Viacom over carriage rights can mean I miss The Daily Show for awhile. If Comcast holds up Frontier or AT&T Wireless, it means millions of people can’t call home, can’t call their businesses, and potentially can’t call 9-1-1. That’s not an inconvenience, that is a disaster.


The usual response to this concern is that this is so awful it could never happen, because Comcast would never risk doing anything like this. But what this filing tells us is that Comcast would risk this just fine, because whether it simply doesn’t get it or actually plans to leverage its gigantic size in exactly this way, Comcast does not think negotiating interconnection or phone termination is any different from negotiating carriage agreements.


Now I’m not saying that Comcast ought to beg for special favors from the FCC as part of the transition. I’ve been pretty caustic about that sort of thing in the past. But I am saying that Comcast needs act responsibly for its market size, set a good example, and follow in the footsteps of AT&T and just about everyone else by recognizing this is not just about themselves. For this transition to work successfully, Comcast must acknowledge that the phone system needs some kind of oversight so that phone calls to rural America go through, consumers can still count on their phone calls staying private, and the network bloody well works reliably and consistently.


Because whether it’s merely hubris or an actual intent to exploit its market power, the sad truth is that Comcast is actually the one company big enough to totally crash the U.S. communication networks through unilateral action of its own. Comcast is not simply “too big to fail,” it’s in a special regulatory category all its own called “too big to be allowed to screw up.” The fact that Comcast can blithely start a proceeding of this magnitude and importance by essentially saying “we’re so big we’ll always be better off with no rules” is probably the best argument for making sure the FCC has the authority to deal with the inevitable disaster this kind of arrogance causes.

Stay tuned . . . .