Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C COMMENTS OF EARTHLINK, INC. AND NEW EDGE NETWORK, INC.

Transcription

1 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C In the Matter of ) ) Wireline Competition Bureau ) Seeks Comment on ) Business Broadband Marketplace ) ) COMMENTS OF EARTHLINK, INC. AND NEW EDGE NETWORK, INC. Samuel R. DeSimone, Jr. Executive Vice President and General Counsel EARTHLINK, INC Peachtree Street Atlanta, GA (404) tel Penny H. Bewick Vice President-External Affairs NEW EDGE NETWORK, INC Columbia House Blvd Suite 106 Vancouver, WA (360) tel Donna N. Lampert Jennifer P. Bagg LAMPERT, O CONNOR & JOHNSTON, P.C K Street NW, Suite 700 Washington, DC (202) tel (202) fax Counsel for EarthLink, Inc. and New Edge Network, Inc.

2 INTRODUCTION AND SUMMARY 3 DISCUSSION 6 I. Wholesale Broadband Access Services Benefit the Business Broadband Marketplace and Increase Broadband Adoption and Deployment 6 II. Fully Functional and Comprehensive Operation Support Systems are Necessary to Realize the Benefits of Wholesale Broadband Access Service 8 III. Wholesale Inputs Must be Reasonably Priced in Order to Give Business Customers Competitively Priced Choices 12 CONCLUSION 14 2

3 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C In the Matter of ) ) Wireline Competition Bureau ) Seeks Comment on ) Business Broadband Marketplace ) ) COMMENTS OF EARTHLINK, INC. AND NEW EDGE NETWORK, INC. EarthLink, Inc., and New Edge Network, Inc., file these comments in response to the Public Notice of the Wireline Competition Bureau of the Federal Communications Commission ( FCC or Commission ) seeking information on the business broadband marketplace. 1 As explained herein, the FCC should pursue and implement policies that further the growth of competitive broadband services using wholesale inputs to help meet the needs of home-based, small and medium sized businesses. INTRODUCTION AND SUMMARY EarthLink, Inc. ( EarthLink ) is an Internet service provider ( ISP ), providing nationwide Internet access and related value-added services, such as search, advertising and ancillary services sold as add-on features to the Internet access services, to individuals and small business customers. Since the beginning of retail broadband in 1998, EarthLink has actively pursued the rollout of broadband Internet access services to Americans throughout the country, building consumer offerings that utilize wholesale broadband transmission inputs. 1 See Wireline Competition Bureau Seeks Comment on Business Broadband Marketplace, WC Dkt , DA (rel. Sept. 15, 2010) ( Business Broadband Public Notice ). 3

4 New Edge Network, Inc. ( New Edge ), a wholly-owned subsidiary of EarthLink, is a competitive Local Exchange Carrier that builds and manages private IP-based wide area networks for businesses and communications carriers serving mostly small and medium business customers in smaller areas both inside and outside the former Bell Operating Company territories. New Edge s services utilize a blend of available access technologies including DSL, T1 lines, fiber-optic and wireless broadband connections. A key focus of New Edge s strategy is to provide the resources and services that best match business customers needs and resources. Coupled with its experience and commercial relationships with most other carriers and suppliers, New Edge is able to build and manage complex multi-location networks that require coordination and integration of various carriers, technologies, and geography, providing its business customers a single-source solution for high-speed network connectivity. The link between economic progress and broadband deployment and usage is wellrecognized. EarthLink and New Edge have found that demand for broadband increases when more consumers are able to extract greater value out of available broadband applications, content and functionalities. As the Commission has stated, wholesale broadband transmission inputs for competitive broadband providers enables affordable, high-speed access to the Internet to residential and business consumers. As a result, consumers will ultimately benefit through lower prices and greater and more expeditious access to innovative, diverse broadband applications by multiple providers of advanced services. 2 The National Broadband Plan also recognized 2 Deployment of Wireline Services Offering Advanced Telecommunications Capability, Second Report and Order, 14 FCC Rcd , 3 (1999). 4

5 [e]nsuring robust competition not only for American households but also for American businesses requires particular attention to the role of wholesale markets. 3 All American business from small, home-based business to large enterprise users should have access to competitive broadband options and the ability to pursue the broadband choices that best suit their business needs. For American businesses to enjoy the benefits of competitive broadband services, it is critical that there be adequate national wholesale broadband services that incorporate fully functional and comprehensive broadband operation support systems ( OSS ). Without OSS the vital component that enables wholesale users of business broadband services to pre-qualify, order, manage and support broadband offerings the ability of business customers to utilize reliable, efficient and feasible competitive broadband options will be frustrated. Given the potential benefits of seamless, efficient OSS, the FCC should also undertake an evaluation of the benefits of a standardized OSS, which could streamline ordering and provisioning not only for business broadband services, but for communication services as a whole. Finally, to enable the offering of broadband service to all business users, including homebased, small and medium sized businesses, wholesale inputs must be priced and offered in a way that does not undermine attractive, reasonable, and competitively priced choices. 3 Omnibus Broadband Initiative, Connecting America: The National Broadband Plan, 47, GN Dkt (2010) ( National Broadband Plan ). 5

6 DISCUSSION I. Wholesale Broadband Access Services Benefit the Business Broadband Marketplace and Increase Broadband Adoption and Deployment As EarthLink and New Edge have described previously, 4 the availability of wholesale broadband access services has a significant and positive impact on broadband adoption and broadband deployment, especially as wholesale broadband inputs are often used to serve businesses in smaller, more rural areas, particularly those outside of the former Bell Operating Company territories. In fact, when broadband network providers offer service in previously unserved (or underserved) areas, they provide a competitive alternative in areas where building out additional infrastructure might not be economically feasible. The ability to provide customers with a competitive broadband access choice ensures that previously unserved areas do not immediately transition into underserved areas. 5 Moreover, the offering of wholesale broadband access by competitive broadband network providers venturing into unserved areas means fuller utilization of newly built broadband networks and swifter realization of network investments. In addition to the network investment benefits that wholesale broadband access services bring, competitive choice enhances user broadband adoption. Home-based business customers are often inclined to select a broadband Internet provider like EarthLink over the incumbent 4 See Letters from Jennifer P. Bagg, Counsel for EarthLink and New Edge, to Marlene H. Dortch, Secretary, FCC, GN Dkt (filed Aug. 24, 2009, Sept. 14, 2009, Sept. 15, 2009, Sept. 25, 2009, Sept. 28, 2009 and Nov. 30, 2009). See also Reply Comments of EarthLink, GN Dkt (filed Apr. 26, 2010); Comments of EarthLink, GN Dkt (filed July 15, 2010). 5 See A National Broadband Plan for Our Future, Notice of Inquiry, 24 FCC Rcd. 4342, 49 (2009) (asking whether multiple providers of broadband services are useful or necessary for achieving our goal of providing broadband services to unserved and underserved areas. ). See also American Recovery and Reinvestment Act of 2009, Sec. 6001, Pub. L. No , 123 Stat. 115 (2009) ( Recovery Act ). 6

7 broadband provider due to EarthLink s name recognition for customer service, loyalty and personal recommendations, while other small and medium business customers, who perhaps require managed networks outside urban and suburban footprints, are attracted to services like those offered by New Edge, which can offer a one-stop solution across multiple provider territories via wholesale broadband access. EarthLink and New Edge s successful wholesale broadband service relationships have increased overall the number of business customers that enjoy the benefits of broadband services and competition. 6 Wholesale broadband service providers also help realize the nation s broadband usage goals, by assisting in community development, wiring anchor institutions, helping schools, and increasing jobs. 7 Networks of anchor institutions, such as those New Edge deploys for its customers, including health, education, public safety, and government buildings are critical to the expansion of broadband services to the unserved and underserved. 8 For instance, New Edge 6 See Letter from Jennifer P. Bagg, Counsel for EarthLink and New Edge, to Marlene H. Dortch, Secretary, FCC, 2-4, GN Dkt (filed Sept. 14, 2009). 7 See Recovery Act 6001(b), 123 Stat. at (stating that the goals of the BTOP is to provide broadband access to unserved areas; to provide improved broadband access to underserved areas; to provide broadband access, education, and support to community anchor institutions, or organizations and agencies serving vulnerable populations, or job-creating strategic facilities located in state- or federallydesignated economic development areas; to improve access to, and use of, broadband service by public safety agencies; and to stimulate the demand for broadband, economic growth, and job creation). 8 Comments of NATOA, 2, GN Dkt. No (filed Oct. 28, 2009). As described by FCC Commissioner Copps, [b]roadband can be the great enabler that restores America s economic well-being and opens doors of opportunity for all Americans to pass through, no matter who they are, where they live, or the particular circumstances of their individual lives. It is technology that intersects with just about every great challenge confronting our nation whether it s jobs, education, energy, climate change and the environment, international competitiveness, health care, overcoming disabilities, equal opportunity the list goes on. Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996, as Amended by the Broadband Data Improvement Act, Notice of Inquiry, Statement of Commissioner Copps, 24 FCC Rcd (2009). See also National Broadband Plan at 10. 7

8 connects long-term care facilities located in seven states, an outpatient rehabilitation facility that has services in over 600 locations, and numerous medical providers located outside urban and suburban areas. New Edge also provides wholesale broadband service to schools throughout the country, including a private provider of early childhood and school-age education and care serving more than 300,000 children, a state teachers association, as well as local government authorities, such as mayor offices, food safety inspectors, and government run housing authorities. Likewise, EarthLink s customer base represents numerous small and home-based businesses. A substantial number of home offices and small businesses utilize EarthLink services as a way to leverage broadband Internet access to expand their businesses, creating jobs and expanding economic opportunities. The development of thriving wholesale broadband service options also promotes broadband innovation and helps ensure that consumer and user choices (not legacy benefits and lack of options) drive success and market evolution. Instead of being required to accept the broadband service packages and options (including price, terms, features, quality, customer service, and functions) offered solely by one (or two at best) incumbent legacy providers, business broadband customers become empowered to seek the services that best meet the needs of their business when they have competitive options from which to choose. II. Fully Functional and Comprehensive Operation Support Systems are Necessary to Realize the Benefits of Wholesale Broadband Access Service Practically speaking, the benefits of competitive wholesale broadband service can never be realized completely by business broadband customers without the underpinnings of fully functional and comprehensive OSS. Unless these business users can turn to a competitive broadband provider who can respond to pre-qualification inquiries, process orders, complete 8

9 installation, follow-up on trouble tickets and perform status checks, the benefits of robust wholesale broadband competition will be an unrealized objective. Much like viable electronic OSS was fundamental to the development of today s telephone network by making the manual processes through which a telephone network was operated more efficient, the current and future state of OSS development must be able to support emerging network technologies. 9 At a minimum, this requires broadband OSS to be electronic, in real-time and readily accessible by wholesale broadband service competitors. Wholesale broadband service providers must be able to institute a workable application programming interface ( API ), including through access to the information necessary to implement it. 10 Notably, while an API build-out is a joint process, the burden of implementing an API falls significantly on the competitive wholesale broadband provider. 11 There are now compelling reasons for the FCC to assess more closely the impact of a standardized broadband OSS and APIs, including potential benefits to business customers and 9 Agilent Technologies, White Paper: Operations Support Systems (2007), available at 10 An API is a set of standards that enable two systems to integrate pre-ordering and ordering functions, essentially the functional translation of customer data. The API allows the wholesale broadband service provider to enter and submit customer data into their own corporate operating systems that interfaces with the OSS of the providing company. The need to check separate systems and utilize duplicative entries, which increases manual error, delay and complexity, is eliminated. The API is therefore a fundamental component of fully functional and comprehensive OSS as it enables the wholesale broadband service provider to access real-time pre-qualification details, place orders and issue trouble tickets, as well as access to and delivery of other information necessary to best serve consumers. 11 The underlying broadband network provider need only establish the specifications and documentation for its API once, while each wholesale broadband service provider must build-out a separate API to that underlying provider, as well as for every other underlying provider it purchases wholesale broadband service from. 9

10 spillover efficiencies. 12 A standardized OSS, including standardization of data fields such that they would be consistent from one provider to the next, once implemented, would result in enormous cost savings for all consumers and broadband providers. Not only would broadband providers enjoy significantly reduced burdens of constant system retooling in order to communicate with the systems of other providers, the process of OSS implementation would be streamlined. Greater standardization of OSS and APIs would also well serve the interests of competition and consumer choice since it would enable seamless customer switching of broadband service providers, meeting other goals of the FCC. 13 Competition in the business broadband marketplace can never really take hold if consumers are frustrated when they attempt to change broadband providers. In addition, standardization of OSS is even more compelling in this era of industry consolidation, mergers and acquisitions. As such, EarthLink and New Edge continue to urge the FCC to seek more information on what standards are in use by the industry and identify standards that meet industry and consumer requirements, their costs and the potential impact on our nation s broadband goals See Letter from Jennifer P. Bagg, Counsel for EarthLink and New Edge, to Marlene H. Dortch, Secretary, FCC, 5, GN Dkt (filed Nov. 30, 2009). 13 See, e.g., Consumer Information and Disclosure, Truth-in-Billing and Billing Format, IP-Enabled Services, Notice of Inquiry, 24 FCC Rcd (2009) (seeking, in part, comment on how to provide consumers with better access to clear, easily understandable information they need to choose a provider or switch an existing provider or plan). 14 See, e.g., OSS Through Java Initiative, The Only Game in Town (2005), available at (describing the OSS through Java standard (OSS/J) as the most mature and widely supported off-theshelf enablers of end-to-end component-based solutions ); TM Forum, Solution Frameworks Next Generation OSS Standards, available at ( TM Forum s Solution Frameworks (NGOSS) are the widely adopted set of standards and best practices for transforming your business and 10

11 At the same time, the FCC should pursue immediately more incremental OSS changes. For example, prior to mandating standardized broadband OSS, the FCC should require fully functioning carrier-deployed broadband OSS that facilitates efficient usage. EarthLink and New Edge recognize and agree that the cost of OSS implementation is an important consideration and acknowledge that the FCC must weigh the costs and benefits of proposed regulatory mechanisms. 15 Today, there are off-the-shelf and innovative options available that, with modifications to the existing systems of each company, could substantially ease the burden on implementing a fully functional and comprehensive OSS. 16 To create sound and data-driven policies, the FCC should have a clear and complete understanding of the costs of carrier deployed OSS, including specifically, the incremental cost of defining and facilitating open, workable APIs for wholesale broadband providers. operations. ). While EarthLink and New Edge do not necessarily endorse these solutions, they underscore there is a need for standardization. 15 It is EarthLink and New Edge s joint experience that industry costs have fallen substantially in the over ten years since the FCC and other regulatory authorities first explored OSS costs. See Filing and Review of Open Network Architecture Plans, Memorandum Opinion and Order on Reconsideration, 8 FCC Rcd. 97, 13 (1992) ( at this time the benefits of requiring BOC enhanced services personnel to use the same access to OSS for [complementary network services] as independent [enhanced service providers] do are outweighed by the costs and would not be in the public interest.); Deployment of Wireline Services Offering Advanced Telecommunications Capability and Implementation of the Local Competition Provisions of the Telecommunications Act of 1996, Third Report and Order and Fourth Report and Order, 14 FCC Rcd , 143 (1999) (finding the cost of implementing modifications to incumbent LEC systems so that competitive LECs could access might range anywhere from $3.5 million to hundreds of millions of dollars. ). 16 See, e.g., IBM, White Paper: Improve operation efficiencies through effective managements of nextgeneration networks and services, 5-6 (March 2008), available at ( Out-of-the-box service assurance solutions that are easy to install, upgrade and maintain over their life can reduce ongoing operational costs, lower learning curves and improve time to productivity and value, and do not require highly skilled operators to manage. ); HP, NGOSS Solutions, available at 11

12 At a minimum, the FCC should make an explicit determination that up-to-date, real-time and efficient OSS for wholesale broadband services is needed not only to encourage deployment and adoption of broadband for business customers generally, but also to promote broadband competition. The FCC should define baseline OSS parameters to include electronic, real-time and accessible requirements. Further, to ensure its efforts are targeted, the FCC should also commit to obtaining additional data for assessment of wholesale broadband services OSS, with an emphasis on business-oriented wholesale services, as well as cost data. III. Wholesale Inputs Must be Reasonably Priced in Order to Give Business Customers Competitively Priced Choices As recognized in the Business Broadband Public Notice, the nature and extent of competition for business broadband services can depend upon providers ability to deploy appropriate facilities or, where that is not feasible, obtain those inputs from other providers that have networks in place. 17 The National Broadband Plan recognized succinctly that [b]ecause of the economies of scale, scope and density that characterize telecommunications networks... it is not economically or practically feasible for competitors to build facilities in all geographic areas. 18 While broadband services offered by providers who utilize wholesale inputs are vital to competition in the business broadband marketplace, the wholesale inputs must be competitively priced and reasonably available to attain their full potential competitive benefits. Wholesale prices that are artificially maintained at or near the consumer retail rate interfere with the ability of competitive providers like EarthLink and New Edge to create service 17 Business Broadband Public Notice at National Broadband Plan at

13 offerings that meet business customers needs. As a matter of fact, in several cases, wholesale pricing has been pushed above consumer retail rates effectively thwarting competition. Thus, the FCC should consider ways to ensure that wholesale inputs are not priced or offered in a way that circumvents the ability of broadband competitors to offer business customers the broadband services, technologies and facilities they desire. The FCC should also look to the numerous international policies that rely heavily on wholesale broadband access as a means to promote a competitive market and benefit consumers. 19 Demands for unreasonable and substantial volume thresholds, imposition of significant shortfall penalties and attempts to mandate uneconomic rates, terms, and conditions can make it difficult, if not impossible, for competitive broadband service providers to compete fairly and ultimately undermine broadband choice. 20 Just as the 19 See, e.g., U.S. Government Accountability Office, Telecommunications: National Broadband Plan Reflects Experiences of Leading Countries, but Implementation Will Be Challenging, 26, 33 (Oct. 2010) (finding that six out of the seven top broadband performing countries have unbundling policies resulting in greater competition, higher speeds, more services, and lower prices). See also Harvard University Berkman Center for Internet & Society, Next Generation Connectivity: A Review of Broadband Internet Transitions and Policy from Around the World, 13-14, (Feb. 15, 2010) ( Open access rules are intended to encourage entry by those competitors, who can then focus their own investments and innovation on electronics and services that use that basic infrastructure. ). See also, e.g., Peter Nowak, Canada Must Open Internet Networks, CBC News (Jun. 16, 2010), available at Vladimir Guevarra, BT Must Give Rivals Access to Fiber Lines, Wall Street Journal (Oct. 7, 2010), available at 20 The FCC has long held that it will investigate anticompetitive pricing, including price squeezes and predatory pricing, and that such practices are inconsistent with the Communications Act and contrary to the public interest. See, e.g., Ameritech Operating Companies Petition for a Declaratory Ruling and Related Waivers to Establish a New Regulatory Model for the Ameritech Region, Order, 11 FCC Rcd , 20, n.44 (1996) ( a price squeeze can occur when an entity that provides both a retail product and a necessary input for providing that retail product possesses market power over the input. A price squeeze exists when the price of the input product is so high, relative to the price of the retail product, that competing providers of retail service are unable to make a profit. ); GTE Telephone Operating Cos.; GTOC Tariff No. 1, Memorandum Opinion and Order, 13 FCC Rcd , 32 (1998) ( We have ample authority under the Act to conduct an investigation to determine whether rates for DSL services are just 13

14 FCC explained in the National Broadband Plan, [w]holesale prices that are too high may deter efficient competitive entry... thus thwarting the benefits and success of wholesale inputs for broadband services. 21 For this reason, the FCC must continue to exercise strong oversight of such practices and be prepared to step in to ensure reasonable wholesale broadband service offerings and effective broadband competition. CONCLUSION For the foregoing reasons, EarthLink and New Edge urge the FCC to move forward on the stated goal to ensure that businesses realize the maximum benefits of broadband services and competition. 22 To do so, the FCC should ensure access to fully functional and comprehensive OSS, explore OSS standardization and commit to oversight and action to ensure wholesale inputs are offered on just and reasonable terms. and reasonable.... We conclude, therefore, that federal tariffing of interstate DSL services, such as the one at issue here, is appropriate, and we will address any price squeeze concerns as they arise ). 21 National Broadband Plan at 65, fn Business Broadband Public Notice at 2. 14

15 Respectfully submitted, Samuel R. DeSimone, Jr. Executive Vice President and General Counsel EARTHLINK, INC Peachtree Street Atlanta, GA (404) tel Penny H. Bewick Vice President-External Affairs NEW EDGE NETWORK, INC Columbia House Blvd Suite 106 Vancouver, WA (360) tel Donna N. Lampert Jennifer P. Bagg LAMPERT, O CONNOR & JOHNSTON, P.C K Street NW, Suite 700 Washington, DC (202) tel (202) fax Counsel for EarthLink, Inc. and New Edge Network, Inc. 15