What Time is It? The Future of Legacy Networks, Regulation & Competition


What Time is It? The Future of Legacy Networks, Regulation & Competition

By Paula Bernier, Executive Editor, TMC  |  May 14, 2014

Copper, TDM, and wireline networks in general – all three remain important parts of our public networks today. At the same time, all three are vestiges of the past that continue to be the source of decommissioning discussions.

But is copper really going the way of the dinosaur? What’s happening with the TDM-to-IP transition? And, in the age of the smartphone and the tablet, who needs boring old wireline networks anyway?

More importantly, what do the changes in the networking landscape that are prompting some of the changes and debates relative to copper, fiber, over-the-top services, TDM, wireless, and wireline mean for communications providers, customers, and competition?

Answers to at least some of these questions could come as soon as later this year, which is when the Federal Communications Commission is expected to render decisions related to the pending IP interconnection and special interconnection proceedings, said Chip Pickering, CEO of the competitive carrier association COMPTEL (News - Alert). That should clarify, or establish, IP interconnections rights and obligations, special access last mile reform, and the plan to move the industry to IP as quickly as possible, he said. Any FCC rulings on the above topics are likely to be just the tip of the iceberg in terms of new communications policy, however, added Pickering.

The next big legal framework that will govern communications technology is likely to be established over the next two to four years, Pickering said, as there’s the possibility of significant new legislation from Congress on this when it comes back in 2016.  

So, two decades after the Telecom Act of 1996 went into effect, it appears that Congress will be back at it again, working to address the rules of the road on our rapidly changing information superhighway.

A Series of Tubes

One issue that has been bandied about the industry in recent months and years has been about what will become of the nation’s copper communications infrastructure, and how that will affect competitive carriers’ ability to reach customers in an affordable way.

Debates about the end of the copper age have been going on for some time, but there have been a lot of impressive advancements over the years to keep copper in the loop, so to speak. New advancements in bonding and vectoring, along with the fact that this transport medium is very widely available today, have kept copper relevant even in today’s world of big broadband.

Just look at how copper technology continues to advance. ADSL2+ with bonding offers 12 to 25mbps bandwidth at distances of 7,000 to 13,000 feet. VDSL2 delivers 25 to 50mbps at lengths of up to 2,000 to 3,000 feet. VDSL2 with vectoring, and Bonded VDSL2, promise 50 to 100mbps, and 100 to 200mbps, respectively, at that same reach. And G.Fast with vectoring, which will be in trials beginning in the first quarter of 2015, promises to deliver 200 to 1,000mbps at distances of 100 to 500 feet.

There’s no doubt that fiber is the best choice for customers that have higher bandwidth requirements, but the ubiquity of the copper network makes it a pretty darned good platform on which to deliver most communications services, said Daniel J. McCarthy, president and COO of Frontier Communications, a wireline provider that uses a mix of fiber-to-the-home and hybrid fiber/copper networks to bring services to a range of business and residential customers in 27 states.

Copper also remains an important medium because of its designation in terms of communications regulation. There are regulations specific to copper that enable competitive service providers to access (at rates deemed affordable) the copper infrastructure of incumbent players, while rules around incumbents giving competitors access to their fiber networks are less clear, noted Pickering, who spoke with INTERNET TELEPHONY in March.

Competitive carriers fear that incumbents will install fiber, decommission copper, and leave competitive carriers – many of which rely on wholesale relationships with the ILECs to reach customers – without a method to do so. One ruling that stoked this concern, Pickering noted, was the adoption of Verizon’s so-called new wires, new rules proposal, which relieved the telco of having to grant competitors access to its fiber.

AT&T Services’ Gary Ludgood, senior vice president of global network field operations, said his company doesn’t have a massive retirement plan, but added that as it deploys fiber it doesn’t want to have to maintain other assets for which there is less demand or that are sitting idle.

The whole discussion about copper and fiber relative to communications regulation really misses the point of what needs to be done from a regulatory standpoint, however, according to Pickering. Rather than setting rules based on the specific technology, he suggested, legislators and regulators should ensure rules are in place to allow for competition in the marketplace regardless of whether the underlying infrastructure involves copper, fiber, wireless, TDM, IP, or whatever. Taking a technology-neutral stance, he said, will “keep the industry from having this fight every 5 years” as technologies change.

Perhaps. But for an industry that’s always struggled with changing its mindset from a technology-focused to a services-oriented one, that involves a significant adjustment. That’s not to mention that incumbents frequently view the move to new technologies as an opportunity to break free of old rules.

The Death of the PSTN

A separate piece of the old to new debate revolves around the move from TDM to IP technology. This transition is often referred to with the provocative phrase: the death of the PSTN.

Just how quickly the IP transition is happening, however, varies depending upon whom you talk to.

Sam Kline, senior vice president of corporate strategy at Granite Telecommunications, said his company still adds about 1,000 lines of POTS each day – so the PSTN clearly ain’t dead yet.

Bill Cheek, president of the wholesale markets group at incumbent telco CenturyLink,

added that the transition to IP is not going to occur quickly, as we’re still seeing a good amount of hybrid IP/TDM switch deployments as opposed to IP-only ones. While IP is deployed in national networks, there is not a ubiquitous deployment of IP in local markets, he added. In fact, the use of VoIP in local markets is primarily driven by cable and wireless providers, he commented, adding that the transition to IP is not going to occur quickly for carriers in rural markets.

However, he said that the fact that TDM-only equipment is rapidly becoming obsolete and that large carriers with wireless affiliates can transition faster to all-IP networks through the use of 4G wireless technology, are most certainly driving the IP transition forward.

AT&T is also trying to push things forward on this front. In fact, the giant telco wants to sunset its TDM facilities by 2019.

In an effort to make that happen, AT&T asked the FCC – which on Jan. 30 invited industry players to make all-IP network experiment proposals ­­– to allow it to trial IP technology in select parts of Alabama and Florida.

“There’s just no way that multiple networks can be maintained. There’s just no way,” said Ludgood, who gave a presentation and was part of a panel of service providers at the recent COMPTEL PLUS. “How many lines do you have to lose on a switch before you don’t have to maintain the switch? And the answer today is: All of them.”

In a Jan. 30 blog Jim Cicconi, AT&T’s senior executive vice president of external and legislative affairs, wrote: “The team who authored the National Broadband Plan and the TAC both recognized that creating a path for incumbent providers to retire legacy POTS technology was a necessary step towards achieving universal broadband connectivity in the United States. In particular, both understood that the cost of maintaining the legacy architecture, with its rapidly declining subscriber base, was unsustainable for any company, and was pulling significant dollars away from broadband investment. That decline has only accelerated over the past fifteen months – AT&T’s consumer POTS access lines decreased from 15.7 to 12.4 million lines between 2012 and 2013, proving the truth of the FCC’s conclusions in stark numbers.”

Details about AT&T’s proposed narrow trials are thin, said Pickering, and provide no guidance on how to do IP interconnection. However, AT&T’s Ludgood noted this trial is all about figuring out what works, and he invited the COMPTEL audience to get involved. COMPTEL has been encouraged by FCC Chairman Tom Wheeler (News - Alert) to both work with AT&T and propose its own trials, which Pickering said he’s discussing with the group’s members as well as with incumbent telcos.

Meanwhile, Cheek of CenturyLink at COMPTEL PLUS shared his company’s interconnection plans relative to the IP transition. CenturyLink’s plan transitions third-party point of interconnection behind a national convergence switch allowing third-party interconnection via IP or TDM at the state level; the company intends to implement a secondary convergence platform to displace/retire legacy national Class 4 circuit switches and establish parallel interconnection, allowing for diverse TDM/IP third-party interconnection to the PSTN; and CenturyLink Voice Infrastructure supports all manner of interconnection for termination to the PSTN and allows for next-gen voice services, while maintaining support of legacy services for customers still requiring TDM.

The Wireless Way

Whether TDM or IP, ILECs in the 37 states that CenturyLink serves have lost more than 70 percent of the residential lines since 2000, said Cheek, pointing to the new trend toward wireless communications. More than one in three homes, he added, are wireless only. Cheek also pointed out that Ericsson (News - Alert) reported there were 5 billion connected people in 2010 and that by 2020 there are estimated to be 50 billion devices that will be part of the growing Internet of Things.

Indeed, it’s no secret that the massive uptake of smartphones and tablets – and the rise of the Internet of Things and M2M – are changing the lives of both end users and of service providers.

In 2009, AT&T’s Ludgood said, 45 percent of the company’s revenue came from wireless, 30 percent came from voice and related services, and 25 percent came from wireless data and managed services. Last year, 54 percent came from wireless, 29 percent from wireless data and managed services, and just 17 percent from voice and other services, he said, adding that AT&T has seen 50,000 percent wireless data growth since 2007.

What’s Next?

Given his long history at cellular industry association CTIA, and the obvious and growing importance of wireless, wireless will certainly be top of mind for the FCC’s new chairman. But, again, wireless is a just a piece part of what’s happening in communications, and what’s happening in communications is always changing.

Driving this potential revisiting of the Telecom Act, according to Pickering, is the new leadership at the FCC and a realization that the world has changed significantly since 1996 and that the marketplace is very different, so current regulation no longer reflects the reality of what’s happening now.

As Wheeler wrote in his Nov. 19 FCC blog: “Our communications networks are changing – and fast. What some call the IP transition is really a series of transitions; a multi-faceted revolution that advances as the packets of IP-based communication replace the digital stream of bits and analog frequency waves. The impacts on networks have already begun and will be profound. Fiber networks are expanding. Bonding technology is showing interesting possibilities with regard to the nation’s traditional copper infrastructure. Communications protocols are moving from circuit-switched time-division multiplexing to IP. And wireless voice and data services are increasingly prevalent, empowering consumers to connect at the place and time of their choosing.

“This is what I have called the Fourth Network Revolution (News - Alert), and it is a good thing,” Wheeler wrote. “History has shown that new networks catalyze innovation, investment, ideas, and ingenuity. Their spillover effects can transform society – think of the creation of industrial organizations and the standardized time zones that followed in the wake of the railroad and telegraph.

“But the future of networks can be hard to see, especially in moments of great change. When Alexander Graham Bell offered Western Union (News - Alert) all rights to his telephone patents in 1876, the response was a curt dismissal. A Western Union memorandum concluded that “[t]his ‘telephone’ has too many shortcomings to be seriously considered as a means of communication.”

“The way forward,” Wheeler concluded, “is to encourage technological change while preserving the attributes of network services that customers have come to expect – that set of values we have begun to call the Network Compact.” 

Edited by Stefania Viscusi


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