In September, Verizon decided to yank development of a packet voice network after a ruling by the California PUC said it would have to share the network. Verizon issued a press release on the subject on September 22. It read in part:
- "We deeply regret that California consumers will be denied Internet-based packet-switching technology," said Tim McCallion, Verizon's Pacific region president. "Verizon has no choice but to halt this program because of a regulatory ruling that imposes conditions we cannot meet and that undermine the economics of this investment."
So why are folks still talking about this, three weeks later? What's striking about the decision, industry experts say, is that it flies in the face of the Triennial Review of the Federal Communications Commission (FCC), which aimed to give carriers more ownership of their own packet networks without forcing them to share resources. In addition, today more federal decisions appear to go in favor of the RBOCs (see RBOCs Clear (Another) Regulatory Hurdle). But those in favor of deregulation point to the fact that a state can contradict the federal government on telecom line-sharing, leaving service providers with a cloudy regulatory outlook.
Several equipment vendor sources said the California PUC decision is still being talked about as a disincentive for service providers to build packet VOIP networks.
The issue was raised this week when Alliance for Telecommunications Industry Solutions (ATIS) president Susan Miller expressed concern over the California PUC decision in a Q&A session.
Sources say that softswitches from Nortel Networks Ltd. (NYSE/Toronto: NT) were at stake in the Verizon network.
Nortel declined to comment for this story.
One executive with multiple systems operator (MSO) Cox Communications Inc. (NYSE: COX) said the ruling brings to light the reality that service providers are still battling regulation on two levels, the federal and the state. And in many cases, the two jurisdictions aren't on the same page.
"As an MSO, this is something we are faced with all the time," said James Renken, vice president of operations support with Cox. "The FCC has a jurisdiction and the state has a jurisdiction, so you just have to do your work with both of them..." — R. Scott Raynovich, US Editor, Light Reading