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FCC Chair Moves Network Revamp to Top of To-Do List

FCC Chair Moves Network Revamp to Top of To-Do List

New FCC Chairman Tom Wheeler is pushing for a massive overhaul of communication networks in the U.S. -- from old copper lines to VoIP -- which could result in a significant economic boost. Companies like Cisco, Netflix and Google are salivating over the possibility of IPTV, so "everyone all around will potentially make money where they're not doing so right now," noted tech analyst Mukul Krishna.

By Richard Adhikari E-Commerce Times ECT News Network
11/21/13 9:11 AM PT

The United States Federal Communications Commission is ramping up efforts to transition the country's phone networks from their current time-division multiplexing, or TDM, technology to Voice over Internet Protocol, or VoIP.

The FCC's January meeting will include consideration of an Order for immediate action, according to FCC Chairman Tom Wheeler.

The order should include recommendations on how best to obtain comment on and conduct experiments that will let the commission and the public observe the impact of transitions on consumers and businesses, as well as collect data to supplement the findings from the experiments, he said.

Recommendations on how to initiate a process for the commission's consideration of legal, policy and technical issues that don't fit into the experiments, together with a game plan for managing the adjudications and rulemakings that the transition will involve, should also be included in the order, added Wheeler.

Ways of informing and protecting consumers will be a major area of focus for the recommendations.

Reaction to the Plans

"There are two choices -- either we stay in the 20th Century or we bite the bullet," Mukul Krishna, senior global director Digital Media, Frost & Sullivan, told the E-Commerce Times. "It's not going to happen overnight, but the transition is necessary."

The FCC's move toward VoIP was spurred by a request last year from AT&T and the National Cable and Telecommunications Association, Wheeler said.

"This looks like an effort by AT&T and others to abandon certain networks and customers while forcing consumers to pay for what will likely be more costly services to cover the expense of the networks," suggested Jim McGregor, principal analyst at Tirias Research.

"The carriers have been pushing for this direction for some time, and the market has been pushing the carriers to transition to IP as well," remarked Michael Brandenburg, unified communications and collaboration industry analyst at Frost & Sullivan.

Why the Push for VoIP

Carriers like AT&T will benefit because they will no longer have to install and maintain copper lines.

"Carriers don't really want to maintain those old networks, which are cumbersome to maintain and don't have the same flexibility a modern IP network can offer," Ronald Gruia, director, emerging telecoms at Frost & Sullivan, told the E-Commerce Times.

"There's also a problem with theft," he pointed out.

Carriers will seek to drop the "decades of regulations associated with their copper networks, such as rural phone service requirements, while at the same time being free to deprecate legacy networks whenever they feel like it," Frost's Brandenburg told the E-Commerce Times.

The FCC is likely eyeing the economic boost that might result from moving to VoIP.

Rural households that currently do not have broadband may opt for services like pay TV. Companies like Cisco, Netflix and Google are salivating over the possibility of IPTV, so "everyone all around will potentially make money where they're not doing so right now," Frost's Krishna pointed out.

Challenges to IP-ification

One major issue will be the question of who will pay for the transition, especially in rural America, which is largely without broadband.

"Is the government going to mandate fiber to every home and business?" Tirias' McGregor asked. "If yes, then who will pay for it? Carriers are already complaining about the cost."

The FCC should first figure out the costs and who will bear them, and then determine the potential impact on consumers, McGregor told the E-Commerce Times.

Although IP-based systems require a different security posture than traditional landlines, that "does not necessarily mean they are less secure," Frost's Brandenburg said. "I would expect the biggest challenge will be a continual battle to maintain the control that the FCC has over the carriers."


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