FCC: Get with the IP-Revolution

The FCC has announced plans to begin a technology overhaul that will pave the way for new and better telecommunications services and applications. Last week, new FCC chairman Tom Wheeler began to take steps towards making video calls more of a reality (what then-FCC commissioner Michael Powell called in 2000 “The Great Digital Broadband Migration”). Except, as we all know, video calling has already been a reality (thanks to Skype, Google, Vonage, Apple and a host of other innovators). Once again, the FCC is playing catch-up to innovators that are light years ahead of their rule-writing.

On the official FCC blog, Wheeler announced that the FCC would begin working on a massive telephone infrastructure switchover. For the past half-century FCC rules and regulations have created and maintained a telephone infrastructure called time-division multiplexing, which makes possible a service known simply as “POTS” or “Plain Old Telephone Service.” As the name implies, POTS is just that, a simple voice telephone system that allows for audio calling. Unfortunately, audio calling is just about all this system of old switches and copper wires can handle.

Meanwhile, leveraging the power of IP (or internet protocol), systems like Skype, Vonage and a host of others have left consumers wondering why exactly they still pay for a legacy phone system. Major Internet service providers like Comcast have been offering their version of IP-based telephone as part of basic packages.

Telephone industry giants like Verizon and AT&T have been pouring billions of dollars into infrastructure investment to keep pace. They’ve been swapping the old circuit-switched technology and copper wires for new packet-switched technologies and optic fiber lines. But those swaps aren’t just about digging into their pockets and coughing up some cash (in fact, they’re glad to make the transition), but they’re about weaving their way through some very old and confusing policy.

Current FCC regulations are still written with the assumption that this century-old technology is still the dominant force in telephony. Telephony expert Larry Downes explains, “Leftover rules from the early 20th century days of monopoly carriers and equipment providers even make it difficult for wireline providers to terminate services without permission, even if they are replacing those services with something better and cheaper.”

These onerous regulations have forced telephone giants like AT&T investing heavily in century-old technologies and slow to pull the trigger on infrastructure updates; and smaller local telecommunications companies are unable to progress beyond their legacy systems.

Under FCC guidelines, telecom companies worry that after building a better, faster system they would still be legally obligated to maintain their old system as well. And those maintenance costs continue to skyrocket, with much of the original infrastructure hardware no longer being produced.

The impact of such a transition would be far more jarring on the FCC than on consumers. Reports indicate that more than half of all consumers have already made the switch to an IP based telephone system at the residence. And because of their robust technological capabilities and scalability, many businesses have begun to make the switch to IP-based telephony systems as well. 

Despite regulatory struggles AT&T took the leap a year ago, announcing its plans to offer 99-percent of its network the new IP-based technology by 2015. The company was forced to act on this in order to keep its primary offering, U-Verse, relevant and competitive amidst a sea of new offerings. At the same time that they announced the new plan, AT&T filed an FCC request hoping to update regulations and allow them to let their legacy system die when it’s replaced. Keeping it alive on top of the new system would mean billions of dollars in additional network costs, and subscribers would surely feel the pinch.

Last week’s FCC announcement to begin IP-based test markets marks a solid step forward. Hopefully a release of updated regulations will follow, allowing the old systems to die and dropping the cost of telephone service to consumers across America.

Zack Christenson writes on digital tech issues for The American Consumer Institute Center for Citizen Research, a nonprofit educational and research organization.  For more information, visit www.theamericanconsumer.org.

 

 

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