“The way forward is to encourage technological change while preserving the attributes of network services that customers have come to expect,” FCC Chairman Tom Wheeler wrote in a recent blog.
After assuming office late last year, FCC Chairman Tom Wheeler wasted little time in issuing a challenge to the telecom world when he called for “a diverse set of experiments” to move just about everything to an IP-style network. This meant moving away from the time-division multiplexing (TDM)-based network that has provided communications for everything from alarm systems to Mother’s Day calls.
Wheeler, who took on the job as FCC Chair on Nov. 4, issued his statement two weeks later. While there are many IP-based alarm systems, there are sizable chunks of both residential and commercial services still using legacy TDM systems. If there is TDM technology anywhere in your service offering, you are one of those operations that FCC’s proposal will affect.
FCC’s idea is to move everything in the nation’s telephone system from its century-old network of circuits, switches and copper wires to IP. While the upgrade will cost money, the FCC would argue that, in the long run, trying to maintain physical switches and a POTS-style network will be even more expensive. Simply keeping software current for old switches already is a challenge for many dealers and integrators.
“We have no control over what our customer purchases when they buy their phone systems,” notes Bob McVeigh, vice president and general manager of Security Solutions Inc. of Norwalk, Conn. He adds that the move to IP has been a reality for some time: “Even if the customer has all copper lines, as soon as it leaves their house, it is jumping onto the Internet — something IP-based.”
McVeigh, who serves on ESA’s industry affairs committee, says ESA has been trying to warn the membership that this will happen. “Anyone who doesn’t realize this is coming needs to read more,” he says.
Government Recognizing the Reality
TDM is gradually on its way out. The big telcos like AT&T and Verizon would agree; yet, any FCC program to speed up the transition might not do much to help alarm companies finance the changeover. “FCC is recognizing the reality that the telephone network is converting to IP,” says Charles McKee, vice president of government affairs with Sprint. Located in Washington, D.C., he handles legislative, regulatory and spectrum issues for the company.
While most carriers already have made the transition to IP in their networks, he notes that much of the traffic is converted to TDM when it is handed off. “The FCC has not set a date by which we are going to shut down the TDM network,” McKee emphasizes; however, he adds, they have taken steps to start eliminating the Universal Service Fund subsidy for TDM networks.
AT&T has suggested that the FCC set up a hard cutoff date for TDM, and telecom managers need to be sure they appreciate the difference between the FCC’s current position and AT&T’s stand. AT&T and Verizon would like to transition to all-IP — AT&T already has its U-Verse service in place and Verizon offers FiOS. Vonage and Skype also offer services that would make the FCC Chair happy. But the FCC is not stopping there.
Sprint and other competitive carriers are concerned that AT&T and Verizon — two of the biggest boosters of the move away from TDM — will use the transition as an excuse to get out from under regulatory oversight. The FCC might not see it that way.
Inside the Revolution
“This is what I call the Fourth Network Revolution,” Wheeler says. “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.”
Is IP the answer to everything in the network? Even a company that has embraced IP with a Cisco VoIP PBX sees its output come as TDM. What will happen when TDM becomes a dirty word in networking?
What AT&T has proposed is a series of “trials” where they cut over a whole metro area to IP. A cynical observer might say that such a trial hardly seems temporary. There is no language in these proposals to cut the city’s network back to TDM if there are any glitches.
Wheeler stumped for policy that would set forth the best process that the FCC can initiate so that, in parallel, it may decide the legal and policy questions raised by this change. The other FCC commissioners agree that it is an important initiative. It likely will happen in some form.
Wheeler admits that the future of networks can be hard to see, especially in moments of great change. He offered the following historical note: “When Alexander Graham Bell offered Western Union 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 is to encourage technological change while preserving the attributes of network services that customers have come to expect, Wheeler said in a blog post.
All of that would sound great to many customers, but what about those charged with providing the services?
The big names in telecommunications services — the ones alarm companies purchase from — are not singing the same song. The former Baby Bells are in favor of dumping TDM and, with it, the regulatory oversight that the FCC has exercised on price controls. CLECs (competitive local exchange carriers) and others worry that they — and their customers — will be priced out of the market in a non-regulated environment.
“Our current infrastructure has served us well for almost a century, but it no longer meets the needs of America’s consumers,” Jim Cicconi, AT&T’s senior executive vice president of external and legislative affairs, said in a prepared statement. “The transition to broadband and IP services that has already begun is driven by consumers who are moving to the Internet and choosing to connect in ways not imagined just a decade ago.”
Their stance is that we are in an IP universe and that the Internet works so well that there is no need for regulations under an IP-based network plan. Here, then, might be the “reason-behind-the-reason” for the major players’ strong desire to see the world go to IP: An opportunity to free themselves of pesky regulation.
“We fear a monopoly or duopoly without price controls,” McKee says, pointing out that AT&T and Verizon today control 80 percent of the telecom revenue in the United States and that even the competitive carriers must purchase lines from the LECs. “One of our concerns is that those carriers will have incentive to use market power to increase costs to the enterprise customer.”
He adds that he fears the LECs will use a transition to IP as an excuse to duck existing regulations that cover TDM-based services, especially pricing rules. “We share the CLECs concerns,” McKee says. “There is a need for the FCC to continue to provide for interconnection to the LECs at a reasonable and affordable rate.
“AT&T is using the IP transition as cover to eliminate regulatory oversight,” McKee continues. “They are effectively using removal of copper to remove any obligation to the last-mile connections,” he says. He fears that AT&T will argue that the old regulations covered TDM and copper. “If the network is no longer copper, then is there no need for FCC jurisdiction?
Much of the FCC’s broad plan is supposed to be aimed at underserved geographic areas. This will require substantial capital investment by telcos in many cases. “Like any change, it requires planning,” Cicconi said. “The geographic trials directed by Chairman Wheeler will provide the real-world answers needed to ensure a seamless transition.”
Wheeler’s idea is neither original nor is he the first to voice it at FCC; in fact, the odds of action being taken are bolstered by the number of senior Commissioners who have already pushed for IP before Wheeler’s time.
Impact on Security Dealers
First, keep in mind that this is not something that will happen in three months or six months; but, it will happen, McVeigh assures. It will certainly affect alarm companies, but maybe not as much as some might fear. Security Solutions owns its own central station so McVeigh knows that any dealer who uses a central station more than one town away already is using IP.
What will be lost is the guarantee of the old POTS networks. Hurricane Sandy proved the resiliency of POTS services, which kept working even when all the IP-based services were washed out. “That resiliency will go away,” McVeigh confirms. “We will not have it in the future.”
Second, keep in touch with your telco and try to understand what your carrier is likely to do. Remember that your local contact might not be on top of the plans being made back in the telco’s headquarter; however, if enough dealers ask questions, the security community should be able to get a feel for the pulse of the decision making bodies.
Look for the transition to come to the networks sometime in the next three to four years. That is when telcos will force their customers to switch over. “The good news is they have improved their networks,” McVeigh says. “The smart dealer is migrating his client base to something that will be more reliable: IP, radio or GSM. The difficulty is establishing pricing. Dealers will be charged more by their third-party central stations, so they need to figure how they will compete.
“It’s kind of a shell game,” McVeigh adds. “You need to stay competitive in the marketplace and still deliver a quality product and make a profit. Dealers should be figuring who to do that right now.”
Curt Harler is a technology writer and regular contributor to SD&I magazine. Email him at email@example.com.