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Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 in the Matter of ) ) IP-Enabled Services ) WC Docket No. 0

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Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 in the Matter of ) ) IP-Enabled Services ) WC Docket No. 0 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) IP-Enabled Services ) WC Docket No. 04-36 COMMENTS OF GCI Tina M. Pidgeon Marty W. Weinstein Lisa R. Youngers Regulatory Attorney General Communication, Inc. General Communication, Inc. 1130 17th Street, NW, Suite 410 2550 Denali Street Washington, D.C. 20036 10th Floor Tele: (202) 457-8815 Anchorage, Alaska 99503 Fax: (202) 457-8816 May 28, 2004 TABLE OF CONTENTS I. INTRODUCTION AND SUMMARY................................................................................1 II. CABLE TELEPHONY IS ONLY ONE OF THE DELIVERY MECHANISMS FOR GCI’S COMPETIVE LOCAL SERVICE OFFERINGS........................................................................................................................5 III. THE COMMISSION SHOULD NOT FORMULATE REGULATION FOR LIKE SERVICES THAT DISTINGUISHES BASED ON TECHNOLOGY ..................................................................................................................8 IV. THE COMMISSION SHOULD FOLLOW A COMPETITIVELY-NEUTRAL REGULATORY FRAMEWORK AMONG PROVIDERS OF COMPARABLE SERVICES.........................................................................................................................11 A. Preserving Non-Discriminatory Access to the Network........................................11 B. Access Charges......................................................................................................14 C. Universal Service Eligibility..................................................................................15 D. Regulations Designed to Protect the Public Safety................................................17 V. CONCLUSION..................................................................................................................18 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) IP-Enabled Services ) WC Docket No. 04-36 ) COMMENTS OF GCI General Communication, Inc. (“GCI”) hereby submits these comments in response to the Commission’s Notice of Proposed Rulemaking, issued on March 10, 2004, in the above- captioned proceeding (“NPRM”), regarding the appropriate regulatory framework for IP-enabled services. I. INTRODUCTION AND SUMMARY GCI urges the Commission to adopt a competitively- and technologically-neutral framework that: • ensures nondiscriminatory access to incumbent LEC bottleneck facilities; • prohibits escape from applicable loop unbundling and interconnection obligations under Section 251(c) simply by changing from a circuit-switched to packet-based technology; • requires service providers to pay the same costs to access the PSTN, regardless of the technology used in either end of the call; and • prohibits arbitrary disqualification from eligibility for USF support based on technology or service classification. A regulatory framework that incorporates these features will neither disadvantage providers of those services that fall within the potentially broad category of “IP-enabled services” nor unintentionally or arbitrarily relieve incumbent local exchange carriers (“ILECs”) of those obligations that are necessary for the continued development of facilities-based local competition. GCI is an Alaska-based company providing local and long distance voice, video, and data communications services. It provides competitive telecommunications and cable services to more than 200 communities in Alaska, and since 1996, GCI has invested approximately $534 million in developing a facilities-based network throughout Alaska. GCI has a long history of investment and innovation, to the benefit of consumers. GCI’s first service offering, initiated over 20 years ago, introduced long distance competition to Alaska. In 1991, GCI entered the long distance haul fiber optic cable market, bringing competition into the market for submarine cable transport between Alaska and the “Lower 48,” and in 1998 it built the first modern and upgradeable fiber optic cable between Alaska and the rest of the continental U.S. Additionally, GCI just recently completed construction of a second submarine cable (Alaska United West) that runs between Seward, Alaska and Warrington, Oregon, providing redundant, ring-protected services between Alaska and the lower-48. In 1996, GCI installed DAMA-capable earth stations in 50 bush communities (i.e., extremely remote, rural communities throughout Alaska), significantly improving service and service capabilities by eliminating the double-hop satellite transmission previously required to complete calls into and out of bush villages. In 1997, GCI entered the local exchange market in Anchorage, followed by Fairbanks and Juneau in 2001 and 2002, respectively, and consumers in these areas have benefited from service and bundling innovations and lower rates. Today, GCI is in the midst of rolling out cable telephony for the service of local customers in Anchorage. -2- In short, investing in markets that are open to competitive entry by utilizing new technologies is familiar territory for GCI. In this proceeding, the Commission is considering how best to regulate, or not regulate IP-enabled services, which may be offered over existing facilities, new facilities, or some combination of the two. GCI urges the Commission to adopt policies that do not disadvantage new entrants and competitors in favor of incumbent local exchange carrier networks, and that do not make arbitrary regulatory distinctions among providers based on technology. As to the first point, many residential and business consumers still have a single, and sometimes inferior (meaning not equipped to provide advanced services at the FCC-defined speed), connection to the public switched telephone network and the Internet. According to the Commission’s most recent report on High-Speed Services for Internet access, over 42 percent of the U.S. zip codes are served by only two or fewer high-speed service providers,1 and even this data does not demonstrate that all premises within a specific zip code have multiple providers. Thus, in many cases, the phone line is the consumer’s only “on-ramp” to the PSTN and the Internet, and access to that facility must remain available to competitors so that consumers may receive the full benefits of competition, including innovative services and lower prices. Policies adopted in this proceeding, therefore, must not discourage competition by denying access to bottleneck facilities by competitors, including where the incumbent telecommunications facilities provider is offering so-called “IP-enabled services” via those facilities. In fact, it is only through the ability to compete for and serve that customer that new entrants have the opportunity to build a customer base and thus generate sufficient cash flow to invest in facilities build-out, bringing the facilities-based competition that was a preeminent goal 1 “High-Speed Services for Internet Access: Status as of June 30, 2003,” Industry Analysis and Technology Division, Wireline Competition Bureau (Dec. 2003) at Table 12, June 2003 data. -3- of the Telecommunications Act of 1996. By the same token, competitive entry or the threat of competitive entry provides the necessary incentives for investment and innovation by the incumbents themselves. Likewise, the policies adopted here should not favor one technology or service provider over another. For the promise of the innovation and investment that comes with competition—or sometimes just the threat of competition—to come to fruition, competitively neutral regulatory policies (consistent with nondiscriminatory access to bottleneck facilities at similar costs for similar usage) are also required. Thus, a provider should be neither advantaged or disadvantaged based on the technology used to deliver the service. A prime example is USF distribution policies. Any carrier that provides services that satisfy the requirements of Section 214(e) of the Act and Section 54.201 of the Commission’s rules must be eligible to receive support, without regard to the technology used to deliver that service. An overly broad application of an “information services” designation, however, could have the bizarre—and perhaps unintended— result of denying support to providers not for a failure to satisfy the relevant criteria, but simply due to the classification of the service as “information” rather than “telecommunications,” based on the technology used to provide the basic supported services. This is not the basis for sustainable regulatory policy. As described in more detail below, GCI urges the Commission to retain both market power principles and competitively neutral policies as part of the regulatory regime applicable to IP-enabled services. -4- II. CABLE TELEPHONY IS ONLY ONE OF THE DELIVERY MECHANISMS FOR GCI’S COMPETITIVE LOCAL SERVICE OFFERINGS Following the passage of the Telecommunications Act of 1996, GCI entered the local exchange business in 1997 in Anchorage, which is the state’s largest urban center, and now offers local service to approximately 45 percent of Anchorage residential and business customers combined. In 1997, GCI also had requested interconnection services from the incumbent local exchange carriers in Juneau (the state’s capital) and Fairbanks (the state’s second largest city), but was stalled by a seemingly endless series of regulatory and legal proceedings related to the termination of the incumbent’s rural exemptions under Section 251(f) of the Act. Following a long and protracted legal battle culminating in a state
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