The End of the Beginning: FCC Invites IP Transition Trials

U.S. consumers are gradually abandoning the old, copper-based phone network. Around 2000, the U.S. had roughly 200 million traditional phone lines. By the start of this year, we had only 96 million. More than a third of adults use cellphones as their only form of phone service, up from just 5 percent a decade ago. Forty-two million households subscribed to voice-over-IP (VoIP) service in 2012, an increase of nearly 80 percent since 2008. In 2012, 43.5 percent of residential landlines were VoIP.

But because federal regulations require phone companies to maintain the plain, old telephone system even as they continue building out advanced networks, many in the industry argue that the arrangement imposes costs and holds back investment in the future.

Driven by these developments in the marketplace, technology transitions in communications networks are well underway. They include, for example, the transition from plain old telephone service delivered over copper lines to feature-rich voice service using Internet Protocols, delivered over coaxial cable, fiber, or wireless networks. This is popularly called the IP Transition. Widespread adoption of new technologies can deliver efficient, innovative services to consumers, spark investment, and grow the economy. Currently, consumers have a safety net, if you will. They can revert to legacy services if the newer technologies don’t meet their needs. But when adoption of new technologies reaches critical mass, many providers may ask the Federal Communications Commission for permission to cease offering those legacy services. Managing this transition so carriers can invest in the infrastructure they chose while protecting consumers’ interests is one of the great challenges facing the FCC today.

On January 30, the FCC invited voluntary experiments meant to ensure that the nation’s communications networks continue to provide the services consumers want and need in this era of historic technological transformations. FCC Chairman Tom Wheeler said the launch of these trials is a "very big deal." He said that companies want to shut off circuit-switched networks, but that requires the FCC to make very important decisions that it should not take lightly. Chairman Wheeler pointed out that these are not technical trials -- "We know how to build an IP network," he said. Instead the FCC is framing the experiments as a way to ensure that the traditional values embedded in telecommunications policy continue through these transitions. Chairman Wheeler said consumers have come to expect certain things, and a right to expect those things, from their networks.

The values the FCC seeks to preserve are:

1. All Americans must have access to affordable communications services (universal service).
2. Public safety communications must be available no matter the technology.
3. Competition in the marketplace provides choice for consumers and businesses.
4. Consumer protection is paramount.

The trials will be voluntary and will insure that no consumer loses access to current services in the process.

The Commission outlined a two-part application process, with interested parties submitting expressions of interest, to be followed by a more formal application. The FCC will also set a deadline of one year for launching the trials.

The FCC hopes to address:

• The level of interest in deploying high-speed scalable infrastructure;
• The characteristics of areas where service providers would offer wireless data services at prices comparable to urban wireline carriers;
• How anchor institutions would be impacted; and
• How working with other organizations can advance shared objectives of deploying next-generation networks.

In reviewing applications, the FCC promises to consider the quality of data that proposals would deliver. The officials also said the Commission will consult with state and tribal agencies in making its decisions. The data gathered in these experiments will inform the ongoing public dialogue about technology transitions. This discussion will guide the FCC as it makes complex legal and policy choices that advance and accelerate the technology transitions while ensuring that consumers and enduring values are not adversely affected.

The experiments will gather information in three broad areas:

• Service-based experiments: Providers are invited to submit proposals to initiate tests of providing IP-based alternatives to existing services in discrete geographic areas or situations. Proposals are due by Feb. 20, followed by a public comment and reply period ending on March 31, and final decision on the proposals made at the FCC’s May meeting.
• Targeted experiments and cooperative research: These experiments will explore the impact on specific values, including universal access and competition.
• Rural America: Experiments will focus on ways to deliver robust broadband to rural areas.
• People with disabilities: development and funding of interagency research on IP-based technologies for people with disabilities
• Telephone numbering in all-IP world: A numbering test-bed will address concerns raised about number assignment and databases in an all-IP world, without disrupting current systems.
• Data improvement:
• Reform of the FCC’s consumer complaint and inquiry process to collect better data on how technological change is impacting consumer values
• Intergovernmental collaboration (state, local and Tribal governments) to better understand consumer impact
• Collection and analysis of data on next-generation 911 systems in coordination with the U.S. Department of Transportation’s National 911 office and public safety associations

FCC Commissioner Mignon Clyburn pointed out that the IP transition “holds potential for the introduction of next generation 911, with features such as video call and more reliability and redundancy.” But she cautioned, too, that the Commission has a duty … to close digital divides and ensure that all Americans, including low-income consumers and those in rural, insular and high cost areas have access to advanced telecommunications and information services reasonably comparable to those in urban areas.” She supports the rural broadband trials and experiments targeting schools, libraries, and health care facilities as vehicles to achieve these goals.

FCC Commissioner Jessica Rosenworcel characterized the proposed experiments as “sandboxes,” a way to test new, big ideas without harming the host platform – “inviting a range of sandbox trials to assess how to migrate the networks we rely on today to the digital possibilities of tomorrow. Commissioner Rosenworcel was credited with first articulating the four traditional values the FCC aims to protect moving forward.

FCC Commissioner Ajit Pai pointed to the potential payoffs of the IP transition: effective emergency response through Next Generation 911, better healthcare through telemedicine, and improved educational outcomes through distance learning. And he reiterated that the FCC cannot continue requiring carriers to invest in both old networks and new networks forever. “Every dollar that is spent maintaining the networks of yesterday is a dollar that can’t be invested in the networks of tomorrow. And our goal should be to maximize investment in IP infrastructure so that high-speed broadband extends to every corner of our country.”

"The layers of conditions and presumptions that the Commission establishes for a provider to gain approval to move forward with a service trial are numerous and complex and not what I would have written if I had the pen," said Commissioner Michael O'Rielly. I worry that with so many conditions, we are reducing the chances of companies filing proposals. If few show up to do trials, how does that help inform us? Also, many of the conditions or presumptions -- such as those concerning cybersecurity -- appear not to have a basis in the statute or existing Commission rules. Others seem to expand the scope of existing Commission rules. Nevertheless, trial participation is voluntary and participants will have the opportunity to seek waivers and rebut the presumptions. I look forward to reviewing the proposals that are filed and will give thorough consideration to any requests for relief." He also expressed concerns about rural broadband experiments, saying they "have the potential to divert universal service funding and distract the Commission from completing universal service reforms already adopted."

“The transition of our phone network for the digital future began on the right road today. By unanimous vote, the FCC agreed on two important things. First, the phone transition must leave no one behind. Every American should enjoy the same quality of service and the same competitive alternatives after the transition as they enjoy today, if not better. By adopting fundamental principles similar to the ones urged by Public Knowledge, today's order properly makes consumer protection, public safety and competition the roadmap for moving forward,” said Public Knowledge Senior Vice President Harold Feld. “Second, and more importantly, a unanimous FCC agrees that customers are not guinea pigs. The proposed technical trials will proceed on a voluntary basis, with safeguards to protect small businesses, rural subscribers and other vulnerable populations such as the elderly and the poor. By building on the knowledge gained in these trials, the FCC can manage the process to minimize disruption and maximize benefit for all. If the principles adopted today are the road map to the future, then these trials are a vital first step on that road. While we will no doubt see many arguments along the way until we get there, it's nice to know that even if this is the most dysfunctional and partisan Washington anyone can remember, we can at least start with agreement on where we want to go and the first steps on how to get there.”

Free Press Policy Counsel Jennifer Yeh said, “The Commission rightly acknowledged that the values of competition, consumer protection, universal service and public safety must guide the transition to an IP-based network. While we applaud the FCC's commitment to these values, the agency's focus is misplaced. Without clarifying the policy framework that will apply to the transition, these values are unenforceable. We urge the Commission to reassert its authority over the public communications network. Although the technology underlying this network is evolving, the FCC needs to continue to fulfill its obligation to promote competition, interconnection, universal access and other consumer protections. The FCC needs to clarify that it has authority over the public telecommunications network, and it needs to assert that a technological upgrade doesn’t nullify its authority to oversee that network.”

“This is a historic step by the FCC to empower underserved areas to meet their own broadband needs via ‘self-help’ tradition deeply rooted in rural America,” said Wally Bowen, founder of the nonprofit Mountain Area Information Network (MAIN) in Asheville (NC).

"Rural Telephone and Electric Coops and other small municipal and nonprofit organizations have been the leaders in bringing broadband to our rural communities. We appreciate the FCC's recognition of their important role by including them in opportunities to participate in the Rural Broadband Trials and Connect America funding,” said Mimi Pickering, member of the Central Appalachia Regional Network (CARN).

“Access Humboldt applauds the FCC action today,” said Sean McLaughlin, Executive Director. “By extending program eligibility to local governments and other community anchors, the Rural Broadband Trials have the potential to support locally owned broadband media networks that build local capacity to serve public safety, health, education, media, economic development and civic engagement – targeting broadband deployment and sustainable adoption for some of the least served communities across the nation.”

“This is a an important step in closing the digital divide for remote rural communities. We thank the FCC for recognizing the need to expand funding options and provider opportunities,” said Connie Stewart, Executive Director of the California Center for Rural Policy.

Christopher Mitchell, Director of Telecommunications at the Institute for Local Self-Reliance, said, “This is a great step for rural communities that have not been well served by existing providers. It recognizes that local, nonprofit based providers may be best positioned to meet the needs of local businesses and residents.”

Benton Foundation Director of Policy Amina Fazlullah said, "The Benton Foundation welcomes today’s important step taken by the Federal Communications Commission to update the nation’s existing landline telephone system, while preserving the traditional values that have made that system the best in the world. The FCC’s Order aims to ensure universal availability and accessibility, competition, trustworthiness, robustness and resiliency for a new, digital-based network. Moving forward, as the FCC considers applications to conduct trials and as it evaluates these trials, Benton urges the Commission to also consider how the transition will result in a network that is fast and open, and reflects our nation’s diversity."

In December 2013, Benton released The New Network Compact: Making The IP Transition Work For Vulnerable Communities in which we asked the Commission to be mindful of a wide array of vulnerable communities that could be unfairly disadvantaged during this conversion. Depending on how this transition is done, these communities stand to benefit immensely or be disproportionately harmed. Only by fully understanding the possible pitfalls and opportunities of such a change can the FCC develop a set of “rules of the road” that will best serve all of the country’s residents.

“Today’s unanimous FCC decision recognizing the technological and competitive changes sweeping communications markets and the importance of transitioning to new IP-based networks is an important step forward,” said USTelecom President Walter McCormick. “The Commission order creating a path for voluntary geographic trials and for a framework for resolving important policy issues will help provide a foundation for completing the transition in a way that preserves the key values identified by the Commission while providing consumers with new and innovative services. One of these key values is universal access, and we appreciate that the Commission is fully committed to implementing the second phase of the Connect America Fund this year. Doing so will allow millions of rural Americans to benefit from Internet connections by pushing robust broadband service to the very edges of the network and providing faster speeds to most rural locations.”

Shirley Bloomfield, CEO of NTCA–The Rural Broadband Association, said, “Small rural telecommunications providers have seized the lead in implementing technology transitions in their communities, edging out broadband and IP-based technologies to some of the farthest reaches of the United States. To build upon these efforts, NTCA–The Rural Broadband Association members have already conveyed interest in participating in any trials or experiments to the extent they can help promote and sustain core values of universal service and consumer protection in rural America. In particular, any rural broadband experiments must hold fast and true to the fundamental statutory principles of universal service, and must help ensure that high-quality, advanced services become and remain both available and affordable across all of rural America. If implemented in this way, today’s announced experiments could help restart what has unfortunately been, in recent years, a stalled process of edging out broadband-capable networks in many rural areas, so we look forward eagerly to seeing the details of the order. But as we have highlighted to the commission in recent weeks, any possible experiments must recognize that universal service contemplates service to all Americans rather than a lucky few that any given provider may choose to serve, and any experiments must not permit creative carving up of rural areas just to cream skim larger customers or more densely populated areas at the very real expense of those left behind. NTCA’s members stand ready to help the Commission in delivering on the true promise of universal access throughout high-cost rural areas, and we are hopeful that the FCC’s announcement will further this shared objective.”

AT&T asked the FCC to begin IP transitions over a year ago. Jim Cicconi, the company's chief lobbyist, called the FCC's January 30 action "a bold leap forward on the path to a modern 21st Century broadband world." "Beginning the process for achieving this transformation is overdue, and all of us should recognize the sense of urgency Chairman Wheeler and his team have brought to this issue. They quickly recognized and credited the leadership shown many months earlier by Commissioners Rosenworcel, Pai, and Clyburn, as well as the clear public support of Commissioner O’Rielly, to build a unanimous vote for moving forward. This is visionary both for its break with the past, its recognition of the future, and its unanimity in a time of partisan strife. Maybe I’ve been in this town too long, but once upon a time we all had a term for this. We called it leadership." Cicconi pledged support for universal service, competition (including interconnection), public safety, network reliability and consumer protection.

Jonathan Sallet, the FCC’s acting general counsel and head of the Commission’s Technology Transitions Policy Task Force which spearheaded the order, said the FCC was at the end of the beginning of its work on the IP transition. He said that the item was meant to tee up "quickly" the big policy and legal issues that need to be answered. He also noted there will be much more work for the Commission to do as application trials arrive and are approved – and the results of the trials are evaluated. He also noted that there are many legal and policy issues that the FCC must address and that the trials themselves will not resolve. FCC Chairman Wheeler said he’s asked for a managerial framework this spring that will provide guidance on how and when these questions will be resolved. Wheeler said he’s asked the FCC to proceed as follows:

• The Wireline Competition Bureau, led by Julie Veach, will own the administration of both service and the rural broadband experiments. The Bureau has suggested, and I agree, that it should form a steering committee to include representatives from the Public Safety Bureau, the Wireless Bureau, the Consumer and Governmental Affairs Bureau, the Office of Strategic Planning, the Office of Engineering and Technology, and the Office of General Counsel to guide its oversight of the experiments. That will include specific responsibilities for Public Safety and Wireless, as noted below. Legal approvals necessary to the implementation, duration or operation of experiments will be processed in the ordinary course of business.
• Jon Sallet and the Office of General Counsel will lead the strategic path forward, including the creation of a managerial framework that will chart the process by which the Commission will decide the large-scale legal, regulatory and policy issues arising from the IP transitions.
• Jonathan Chambers, with the support of OSP, including Henning Schulzrinne, will be responsible for the R&D efforts identified in today’s Order, as well as the continuing creation of innovation policy. OSP will also assist WCB in recruiting participants in the experiments, and will work with WCB and OGC to develop procedures for the selection of participants in the rural broadband experiment. OSP will be jointly responsible with CGB for the implementation of datacollection efforts associated with the Order.
• David Simpson and the Public Safety and Homeland Security Bureau will provide subject-matter expertise for all public-safety issues associated with the implementation of the Order.
• Roger Sherman and the Wireless Bureau will provide subject-matter expertise for all wireless issues, including the deployment of fixed wireless systems, associated with the implementation of the Order.
• Kris Monteith and the Consumer and Governmental Affairs Bureau will work with OSP on implementation of data-collection efforts associated with the Order.
• I will be looking to Julie Knapp and OET to be involved in engineering issues that will inevitably arise during the experiments, even though their focus is on the impact on consumers and customers, rather than technology by itself.
• Because of the importance to our economy of the IP transitions, I have asked Mindel DeLaTorre of the International Bureau to provide an international benchmark of how U.S. efforts compare to progress towards IP transitions globally.

We’ll keep you up-to-date on all the IP Transition news and, as always, we’ll see you in the Headlines.