Bach Seat

A.G. Bell‘s question to Watson over a century ago may be relevant again. Tom Nolle at No Jitter explains how that can happen if the FCC expedites the transition to VoIP. Mr. Nolle, the founder of CIMI Corporation does not think that the basic quality of voice service is at risk. He does believe but there are some truly profound consequences to a decision to abandon TDM voice. He believes it will happen, it’s smart to think about the end of POTS — as relates to both opportunities and risks.

Telecommunications has long been more than analog voice and copper loops. The author points out that regulations have stayed in the “TDM” Dark Ages. Operators like AT&T (T) have demanded the FCC modernize things. To deal with these issues, the FCC bundled its transitions (TDM-to-VoIP, fixed to mobile, copper to fiber) into a single Technology Transition Policy Task Force. The recommendations from that activity will hopefully launch experiments in promoting change while controlling the risk of unfavorable impacts. The recommendations of the TTPTF (quite the acronym!) are posted online (PDF) and he says it’s a clarion call for change. So instead of talking about the process, let’s look at the impact.

Who still uses TDM

Mr. Nolle the CIMI principal consultant estimates, that 40% of US households still have TDM voice. Businesses have a higher TDM commitment. The article says that nearly 70% of business voice is still TDM. Suppose we saw TDM voice go away completely; what would happen?

First, little besides voice that requires TDM services and trunks. Which he says means we would see all access lines and trunks transition to packet–almost certainly to Ethernet. The author says this could increase the number of Ethernet business connections by about 28%. it would also likely increase the access bandwidth commitments by branch offices and SMBs (using DSL, fiber, cable, etc.) by over 50%. Metro and access vendors would benefit from this almost immediately because it’s likely that operators would start to promote Ethernet access and IP voice more strongly as soon as the “experiments” showed signs of success.

Operators already like the notion of an “access-first” strategy where they supply a fat pipe to a customer and then build ad hoc services over it. Ethernet or packet access encourages that, so giving that to everyone would drive operators quickly to look for rapid service deployment tools so that they don’t lose all the new access-generated opportunities to the over-the-top players (OTTs). The author believes that operator interest in software defined networks (SDN) and network functions virtualization (NFV) are linked to this very thing. After all it’s silly to talk about “improved service velocity” if you have to restring an access connection to upgrade service.

Impact on Internet policy

The second impact Mr. Nolle sees is on Internet policy. This voice transition raises the question of the difference between “packet” or “IP” and “the Internet”. You can do VoIP over any IP, including private networking. That’s done with a lot of IP voice today in fact. Operators could in theory augment their services to customers by building IP services that bypass the Internet, but that would pose issues in linking the services to current devices in the home or in businesses. OTTs would surely want to get involved in any new service opportunity, and all that raises the triple-threat question of QoS, settlement, and Net Neutrality.

There’s no barrier to QoS in “private” IP networks, but on the Internet, the Net Neutrality order last year said that you could offer QoS only if the subscriber pays for it. Most practical Internet QoS opportunities arise because an OTT like Netflix (NFLX) could gain by offering QoS to customers. They’d pay the ISPs and either embed the cost or perhaps eat it to improve their differentiation. But the FCC said “No!” Now the new FCC Chairman, Tom Wheeler, says “Perhaps”–at least he did in a speech to a university audience. If that were to become policy, it would likely drive QoS for Internet services, and that would drive settlement among ISPs and content players.

Settlement has been a big issue for the Internet since the 1990s. Customers pay their own ISP, so if there’s no money flow from that ISP to others, QoS stops where the ISP hands off the traffic. That’s inhibited the value of the Internet for applications that need QoS, but it perhaps encouraged smaller players and startups who couldn’t pay like Google (GOOG) or Netflix could. Whether this small-player benefit is more for VCs who then have to raise less funding to get an OTT off the ground is an interesting question–but in any event, adding settlement and QoS to the Internet would almost certainly increase operator interest in providing service quality for a fee, which in turn would increase network investment, helping equipment vendors and carriers alike… In short, it would change the industry.

Mr. Nolle concludes that VoIP could be a back door to making the Internet a real network and not a service on top of carrier IP infrastructure. That could remake our experiences online, and the vendors’ fortunes in the marketplace. So watch the progress of this initiative; it could have huge impacts.

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ATT has already made its move to get rid of POTS lines in Michigan. ATT has bribed gotten politicians in Lansing to introduce Senate Bill 636. Michigan SB 636 would amend the Michigan Telecommunications Act (PDF) to let ATT and their fellow travelers eliminate POTS lines in Michigan.

Melissa Seifert, associate state director for government affairs for AARP Michigan says eliminating POTS lines in the Great Lakes State would impact many people. It would affect small-business owners who use fax machines and credit card verification systems, she said, as well as emergency services in parts of the state where cell phone access is unreliable. According to the Michigan Public Service Commission, roughly 3 million Michiganders subscribe to landline service. About 90 percent of households of folks ages 65 and older still use landlines for “lifelines.”

Related articles

• FCC Prepares to Set Rules for the Death of Copper POTS – (dslreports.com)

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.