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CHAPTER V - The Essence of the Debate: Lessons from the IP Transition

The IP Transition now under way has important implications for national broadband policy, as well as for the respective roles of wired and wireless communications. As Harold Feld has stated:

I believe AT&T’s announcement last week about its plans to upgrade its network and replace its rural copper lines with wireless is the single most important development in telecom since passage of the Telecommunications Act of 1996. It impacts just about every aspect of wireline and wireless policy.[22]

Larry Downes’ extended discussion of the IP Transition in the context of Verizon’s response to Hurricane Sandy is instructive. As Downes notes:

Beyond avoiding the “unintended consequences” of wasting infrastructure dollars and unnecessarily stranding network assets in the declining PSTN, quickly and efficiently transitioning every American to IP telephony would help those users who still rely on it to make the leap to the 21st century—to broadband Internet and all the services beyond voice it has to offer.[23]

The question of wired and wireless convergence and substitution had a real-world test in the wake of Hurricane Sandy, and the response to the disaster—by network operators, consumers, policy advocates and the government—offers insights into the debates that surround the broader transition from PSTN to all-IP (including wireless) networks.

Following the disaster, Verizon chose not to rebuild its destroyed PSTN network on the island of Mantoloking, off the coast of New Jersey. Instead, Verizon offered wireless service as (at least) a short-term replacement. Some consumers were unhappy with the “fix,” just as some policy advocates, regulators and local telephone service providers have been critical of the IP Transition more generally:

Washington advocacy groups, state and local regulators, and marginal participants in the dying wireline supply chain [have criticized the IP Transition]. Each of them, for different reasons, have been tilting at whatever windmills they can find, pleading their case to Congress, the FCC, and the press….

The advocacy groups reflexively fear any technological advance that reduces the need for government regulation of network infrastructure. For state and local regulators, the concern is losing their influence over service providers, and with it the regular opportunity to extract concessions for changes in equipment or service.

And so-called “competitive” local phone companies, who piggy-back their services off the equipment of the incumbents, know that the faster consumers embrace free or bundled VoIP, the weaker their subscription-based business modeland future survival—appears.[24]

Harold Feld has expressed support for, but concern about, the IP Transition:

This isn’t an engineering problem—it’s a policy choice. Now is the time to make the policy choices that will form the foundation of the all-IP network for the 21st Century, just as our decisions to adopt these five fundamental principles shaped the phone network of the 20th Century.

We must not keep old rules that no longer serve us simply because they are comforting and familiar, but we must not be so dazzled by the promise of new technology that we forget the foundational principles on which these networks must be built. The technology changes, but the social needs and goals remain the same.[25]

According to many observers, the switch from PSTN to IP offers many more benefits than problems:

The Internet’s packet-switching architecture, open standards, non-proprietary protocols, peered networks and digital hardware are clearly better than separate, closed networks based on older analog technologies. They are also cheaper to operate and maintain. Competition among Voice over Internet Protocol (VoIP) providers is fierce, and prices are falling.[26]

Not surprisingly:

[C]ustomers are voluntarily abandoning wired telephone service in favor of fiber and cable-based VoIP and mobile broadband at a remarkable rate. At its peak, the PSTN network connected nearly every American. By the end of 2011, less than half of all American homes still had a wired connection. That number could fall to as little as 25% by 2015.[27]

At the same time, however:

Critics of an accelerated IP Transition warn of the risk of leaving behind the remaining Americans who still rely solely on PSTN, particularly in rural communities, and among some elderly and low income households.[28]

In part because of the resistance of policy advocates, regulators and local providers, the IP Transition has been less than smooth, and it has bumped up against regulatory impediments:

Carriers can’t simply turn off the PSTN network, even in the vast majority of locations where better and cheaper options are widely available. That’s because decades-old regulations still on the books require the continued operation of the decaying and obsolete analog network, no matter how few users it still has and regardless of cost.

* * *

Current regulations, however, require carriers to maintain the PSTN, the maintenance of which is not sustainable. Wireless carriers must forgo investment in new, more efficient broadband technology to maintain the aging PSTN infrastructure.[29]

The National Broadband Plan similarly acknowledges that required maintenance of legacy PSTN networks “is not sustainable”:

These regulations can have a number of unintended consequences, including away from new networks and services. The challenge for the country is to ensure that as IP-based services replace circuit-switched services, there is a smooth transition for Americans who use traditional phone service and for the businesses that provide it.[30]

Much of the ongoing debate thus concerns the appropriate policy response to the inevitable IP Transition. But it is important to note that the IP Transition itself may usher in the very solutions to these policy concerns:

With the PSTN network off and everyone transitioned to native IP, we can that much sooner build the next generation of Big Bang Disruptors to revolutionize, as the National Broadband Plan predicted, education, health care, energy, employment, community, public safety and entertainment.

* * *

If we move quickly, we can solve the remaining technical obstacles and remove the social barriers that keep some adults stalled in the 20th century. We can agree to core principles for the emerging communications infrastructure that will make it even more successful than the one it is replacing. With public education promoted by leaders in both government and industry, we can ensure a smooth transition for everyone, closing what’s left of the digital divide quickly and definitively.[31]

[22] Harold Feld, Shutting Down The Phone System Gets Real: The Implications of AT&T Upgrading To An All IP Network, Public Knowledge Blog (Nov. 13, 2012), available at http://www.publicknowledge.org/news-blog/blogs/shutting-down-phone-system-gets-real-implicat.

[23] Larry Downes, The End of the Wired Telephone Network is Coming…But Not Soon Enough, Forbes (Oct. 30, 2013), available athttp://www.forbes.com/sites/larrydownes/2013/10/30/the-end-of-the-wired-telephone-network-is-coming-but-not-soon-enough/ .

[24] Id.

[25] Harold Feld, Five Fundamentals, Values For A New Phone Network, Public Knowledge Blog (Jan. 29, 2013), available at http://www.publicknowledge.org/news-blog/blogs/five-fundamentals-framework-successful-transi.

[26] Downes, supra note 23.

[27] Id.

[28] Id.

[29] Id.

[30] National Broadband Plan, supra note 2 , “Chapter 4: Broadband Competition and Innovation Policy”.

[31] Downes, supra note 23.

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