Big Carriers Wear Many Hats

I have seen several articles lately that note how carriers like AT&T and Verizon play both sides of the regulatory fence. But this is something that industry insiders who work with these carriers have known for years.

These articles talk about how these carriers are very good at picking and choosing their arguments based upon the fact that they are regulated in multiple ways. Both AT&T and Verizon are unique in the industry because they are certified in almost every way possible in the carrier world: they are incumbent regulated telephone companies; they are a wireless carriers; they are long distance companies; both of them operate as a CLEC in some markets where they serve businesses not in their telco footprint; there are times when they are what is called a carrier’s carrier, meaning they sell wholesale connections to other carriers; and finally, they provide broadband which they deem to be fully non-regulated.

When one of these large carriers makes a statement, the first thing I have always asked upon reading it is which one of these different regulated entities within the company is doing the talking. Each one of those types of entities operates under different rules and this often gives leeway to their policy people to say something that might be truthful for one part of their company and yet be stretching the truth if applied to another.

A lot of people, even those in the industry assume that these carriers lie a lot, when in many cases they are just doing this regulatory shuffle. I have seen this same behavior for decades and I have come to understand that generally what these companies say is the truth, at least for one of the many hats they wear. The trick is to know who they are talking for, because that let’s you then respond to them properly when you need to get them to do something. But this behavior drives people crazy who are not from the industry and they just think these companies lie a lot.

On a practical note this is something I run into all of the time. For example, I help clients purchase connections to AT&Tat places like tandems. One would think that the cost to connect to an AT&T tandem would be the same for everybody, but it can vary widely depending on your own regulatory status and upon which AT&T entity you are buying from. For instance, if you buy from AT&T the phone company then you buy special access connections at tariff rates. However, if you are a CLEC then you might be able to buy at rates from interconnection agreements. If you are carrying wireless traffic you might be able to buy from yet a third set of rates. If you are a large business you can buy either from AT&T the RBOC or from AT&T the CLEC. If you are large enough you can probably negotiate unique rates that are contractual. And AT&T is very good at trying to get you to buy a more expensive connection than you might be entitled to. It’s a very confusing puzzle that comes from the fact that different parts of AT&T are regulated differently.

Several of the articles I saw talked about a recent interaction between AT&T and the FTC. The FTC sued AT&T because they have been throttling their unlimited wireless data customers for years. This has been widely covered in the press. When an unlimited customers hits some threshold like 5 GB of data for month, their speed is slowed down to the point of barely working. The FTC is tasked with monitoring false or misleading advertising and they say that these plans are not unlimited if the speeds are too slow to use.

But AT&T is claiming that the FTC has no authority to sue them. They say instead that it is the FCC that should be investigating them. Basically, by this claim AT&T is saying that they are a common carrier and subject to Title II rules, which would give the jurisdiction of the case to the FCC.

But wireless data is not subject to Title II regulation. That might change in February if the FCC decides to regulate wireline and broadband data under Title II as part of the net neutrality order. So it’s very interesting to see AT&T claiming in the FTC suit that they are a common carrier. Because for wireless data they clearly are not regulated today by the FCC. But most of the rest of their business is covered by Title II.

You know how I said that most of the time you can figure out which entity is doing the talking if you think it about long enough? This is not one of those times, and sometimes they just lie.