IP Transition Pilots Are How Business Would Proceed, Wheeler Says

"If we don’t maintain the network compact values it is, per se, an unsuccessful transition,” said Wheeler. “If people can’t have access to 911, it’s an unsuccessful network transition. If the result is a diminution, rather than an encouragement and hopefully expansion of competition, it’s an unsuccessful network transition. If we drag our feet and go too slow, it’s also an unsuccessful network transition."

Wheeler emphasized he, as a regulator, is drawing on his long experience in business. “For most of the last decade, I've been a venture capitalist, I've been out investing in new companies,” he said. New companies don’t “rush hell-bent in and say, ‘Lets do everything all at once,’ but ‘Let’s do a trial.'” Commissioner Jessica Rosenworcel has spoken repeatedly about the concept of sandboxes in business, Wheeler said. “That’s what we're doing,” he said. “We're building a sandbox or sandboxes around the country where we will be able to see what happens when companies, and us, trial different concepts on a voluntary basis with consumers to see what the outcomes are."

The transition pilots the FCC has proposed aren’t about whether the technology works, Wheeler added. “It is not a technology trial, we know how to build IP networks,” he said. “This is a values trial. What we call the network compact, those sets of values that are the relationship between users and network providers. We know how to do that in a switched-circuit world. How do we transplant those values over into an all IP world?"

The IP transition order was approved by a 5-0 vote at last month’s FCC meeting (CD Jan 31 p1), Wheeler observed. “This is a team effort.” The switched telephone network of today hasn’t changed much since 1876 when the government awarded the first patent for a phone, he said. “Alexander Graham Bell would recognize the telephone network of today,” Wheeler said. “It served us incredibly well for well over a century, but it was highly inefficient. Maintaining that capacity … was a huge cost. IP and digitalized packet information is the antithesis of that. Instead of maintaining a circuit, it is constantly tearing down and building, tearing down and building.” Moving to IP means “huge efficiencies, huge efficiencies, because now the network is constantly being used,” Wheeler said.

The FCC wants to do a variety of trials in rural and urban markets and those that fall somewhere between, Wheeler said. “This is not a homogenous kind of undertaking,” he said. “We need to have trials that address specific circumstances …. We have been encouraging those who want to do trials to make sure that they have a cohort that looks like America."

The way regulators do their job has to change as the world changes, Wheeler said. “We live in a different kind of environment,” he said. “In the old regulatory world, the FCC could dictate and determine what happens and sit there as the all-wise and all-knowing and be pretty secure that it could control what’s going on. Now we're living in a chaotic world, where as a result of this distributed network, innovation has been pushed to the edges of the network and we want to encourage that innovation. We want to keep coming back to maintaining these values that I keep talking about.”

Wheeler said he played a role in the DTV transition as a member of President Barack Obama’s transition team. “I was the guy that made the decision to say to the president-elect that we had to change the date and push it back because we weren’t ready,” Wheeler said. “One of the arguments I made as to why we had to push this back was that if we in the government don’t get this right, how in the world can we be trusted to get anything like the mega-issues right? It was the wrong time to introduce uncertainty and consternation.” One takeaway from the DTV transition was that “you get one shot, and that’s a pretty sobering thought,” he said.

AT&T Understands Importance of ‘Values Trials'

In a panel discussion following Wheeler’s remarks, AT&T Senior Vice President Bob Quinn said IP transition trials will be most successful if no one recognizes they are even taking place. “The old TDM/POTS technology is going away,” he said. “If we have to be cobbling together class five circuit switches anywhere 15 years from now, that is going to be horrible because the inefficiency of utilizing that technology is only going to get worse over time. I always say to people ‘The last person connected to the POTS network is going to get quite a bill, right?'"

Quinn said AT&T has to move forward on the transition. “If you think about how phone companies do business, we grandfather lots of services,” he said. “We probably have people still on the … AT&T One Rate service that was introduced like in 1994. We grandfather services all the time. We never make them go away. We have thousands and thousands of USOCs [Universal Service Order Codes] and each USOC is its own service code.” Anyone with POTS service likely has a USOC associated with Touch-Tone, Quinn said. “You used to pay for Touch-Tone so there was a separate USOC,” he said. “Now we've zero-rated it, but I guarantee if you have POTS service we have that Touch-Tone USOC still on your line."

The IP transition was initially something AT&T looked at as part of changes within its network, Quinn said. “It seemed like the time was right,” he said. “We understand everything that Chairman Wheeler said today about the values trial. We understood there’s a whole bunch of rules that attach to being a telephone company today, and we have to understand what those rules are going to be going forward.” A “huge discussion” had to take place as the IP transition progresses, he said. “The best place to have that discussion in our view is at the Federal Communications Commission, because it has everybody in the room."

There are “many and numerous ways this could crash badly,” said Harold Feld, senior vice president at Public Knowledge. Many people like their traditional landline service for a variety of reasons, he said. “Either because I want the voice for $20 a month and don’t want the cable … or I want the reliability or I need the call quality or I have a heart monitor and it depends on a particular old technology."

Feld said trials are critical. “People think this is just about voice, it’s not,” he said, noting that in almost every elementary school there are still emergency boxes with a lever to pull in case of fire. “Those go through the phone network to the fire department where there’s an alarm that goes off,” Feld said. “That system is an old technology. It relies on the traditional phone system because the phone is there, it’s self-powered, it’s reliable and we built these schools a while ago. I want to make sure that doesn’t break.” The role of the FCC is clear, he said. “The important role of the FCC right now is to make sure that the vital communications infrastructure of the country doesn’t crash and burn.”

"The idea that this day was coming has been known for a long time,” said former FCC Commissioner Kathleen Abernathy, now executive vice president at Frontier Communications. Abernathy said the agency started to talk about tackling the transition under then-Chairman Michael Powell. “The reason why I think it’s good that we waited is no one really knew what the technology would look like, no one really knew how many competitors there would be,” she said. “This day was inevitable. It wasn’t a question of if, it was just a question of when.”