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FCC Tests Copper Obsolescence in an IP World

Dan Jones
1/30/2014
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The FCC said Thursday that it is ready to start testing alternatives to copper, such as fiber or wireless, a move that will be music to the ears of large incumbents like AT&T and Verizon.

The Federal Communications Commission (FCC) issued an unofficial announcement of "voluntary experiments" to test new technologies to supersede legacy lines.

"Driven by developments in the marketplace, technology transitions in communications networks are already well underway," the agency states in the order. "They include, for example, the transition from plain old telephone service delivered over copper lines to feature-rich voice service using Internet Protocols, delivered over coaxial cable, fiber, or wireless networks."

The government body states that these new technologies must adhere to a set of "enduring values" to be considered. These include:

  • Public safety communications must be available, no matter the technology
  • All Americans must have access to affordable communications services
  • Competition in the marketplace provides choice for consumers and businesses
  • Consumer protection is paramount

Carriers like AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) are currently subject to the Carrier of Last Resort (COLR) rule from 1913 that states that every American household should have access to a phone line.

On November 7, 2012, AT&T petitioned the FCC to update its rules so that wired or wireless IP systems can be considered as a replacement for the traditional copper phone-line system. Verizon, meanwhile, has been working with state governments to get COLR rules changed.

Something over a year later, the FCC is inviting Providers "to submit proposals to initiate tests of providing IP-based alternatives to existing services in discrete geographic areas or situations."

Proposals are due by February 20, followed by a public comment and reply period ending on March 31. Final decision on the proposals will be made at the FCC's May meeting.

Related posts:

— Dan Jones, Mobile Editor, Light Reading

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prayson.pate
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prayson.pate,
User Rank: Blogger
2/1/2014 | 10:33:10 AM
Re: So, does copper go away?
As Tom pointed out there is a question of how CSPs can make money from wireline services. One interesting development is the Google Fiber program, which is providing fiber-to-the-home in Kansas City and Provo, Utah.

In KC the deployment was facilitated by the fact that the city owns the phone poles, so Google cut a deal with them to deploy aerial fiber, which is much cheaper than buried fiber.  Can they drive this strategy more broadly?

The prospects are not bright.  Verizon, AT&T and others have backed off their fiber-centric residential strategies due to the high cost of burying fiber.

Another interesting point is that 4G LTE is creating tremendous demand for fiber backhaul from small cells.  Again, the cost is prohibitive, creating friction between supply and demand.

To me, that leaves two possibilities:

1) The CSPs figure out how to make their wireline facilities more profitable, possibly leveraging the latest Net Neutrality ruling.

2) Fiber for residential internet access and small cells becomes a regulated utility.  Back to the future!

Prayson
brookseven
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brookseven,
User Rank: Light Sabre
1/31/2014 | 9:54:00 AM
Re: So, does copper go away?
Dennis,

From a Tier 1 carrier standpoint, the regulators are right.  Go look at the numbers.

From a small carrier standpoint, I think we shall have to see.

seven

 
mendyk
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mendyk,
User Rank: Light Sabre
1/31/2014 | 9:12:28 AM
Re: So, does copper go away?
State regulators (at least the ones I know) do not consider phone companies to be in dire straits by any means. Whether or not that's a valid view is debatable, but for the foreseeable future I do not expect regulators to be issuing any rulings that would allow a wireline incumbent to simply end conventional POTS service.
brookseven
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brookseven,
User Rank: Light Sabre
1/31/2014 | 9:00:52 AM
Re: So, does copper go away?
Tom,

 

TDM Voice is free....they already own all the equipment and have all the training required.

Already built and installed stuff is always cheaper than any new stuff.

seven

 
bdcst
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bdcst,
User Rank: Light Beer
1/30/2014 | 11:54:26 PM
Re: So, does copper go away?
Well, Verizon started to do it with their FioS offering in some communities and then lost their momentum.  My brother-in-law in Needham MA is on fiber for his POTS line, cable and data.  But a few miles further west in Boston proper it isn't happening, at least not yet.

So, here I am out in the boonies in Vermont waiting with bated breath for Spring to arrive and the final splciing of fiber which will end the local use of copper.  Good riddence.  When I first built my house aall the local telecom could offer me was a four party line!  And even when they ran more copper, it was so far from the CO that the induced AC hum was so bad I had to buy my own noise supression chokes and add tehm to the line.  When dial-up internet came along on a good day my modem might have made a 24kb connection.

Being too far from the CO when DSL came along it wasn't supported on my line until the hardware improved.  But even then the best it would do was around 64k!  The CEO of my little local Telecom promised to do better and evantually found a small enough and economical remote cabinet with DSLAM and placed it at the head of my road connecting it with a dozen T-1 circuits.  So, I've had a whopping 1.5 mb/s down for ther past few years but not stable enough for streaming HD video.

Once off of copper we'll leapfrog over most other domestic servcies for data connectivity.  And the phone company can also get out of the electrcial energy distribution business with no more CO battery at 50 volts to deliver over copper to the customer's end.

Keep in mind that inter-lata voice calls no longer traverse copper.  Fiber has taken over all of the major CO to CO trunking.  And with it CO switching engines are gradually being replaced wtih packetized call handling routers, VoIP.
DOShea
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DOShea,
User Rank: Blogger
1/30/2014 | 9:02:47 PM
FCC
Wow, it took the FCC a year and change since the AT&T petition to take this tentative step. I guess it's no surprise that it moved to the front burner once the wireless guy took over as chairman.
TomNolle
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TomNolle,
User Rank: Light Sabre
1/30/2014 | 8:50:02 PM
Re: So, does copper go away?
That may be true, mendyk, but you have to wonder whether anyone can make wireline pay, or even break even, at this point.  Having a rural telco take over is just a play on RUS subsidies, but there's no sustaining a bad business indefinitely.  Every year TDM carries fewer calls and those big switches just heat more space.  At some point you have to say that you can't subsidize nothing more than a habit.  Everyone needs voice calling, but not a specific kind of voice calling.
mendyk
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mendyk,
User Rank: Light Sabre
1/30/2014 | 8:19:52 PM
Re: So, does copper go away?
I doubt any state regulators will have the nerve to sign of on abandonment of wireline service in any area, at least for the next decade. So incumbents will either have to pawn those territories off on some other operator or continue to provide increasingly miserable service.
TomNolle
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TomNolle,
User Rank: Light Sabre
1/30/2014 | 7:14:21 PM
Re: So, does copper go away?
I think that's what they intend to be doing.  There are a bunch of copper-loop customers in areas that have significantly different economic densities.  In the areas with the biggest dollars-per-square-mile, you pull fiber and sell them TV.  Fios is targeted at places where you can make enough money to provide a return on the investment, so when you've provisioned all those places you stop pulling fiber.  It's that simple, I think.

In areas with "middle" opportunity density you can drive fiber deeper but not to the home (U-verse) and either do IPTV or just focus on residential broadband.  However, TDM voice and voice switching is a huge cost to you and anyone with broadband can get VoIP anyway, so you try to translate them to VoIP.

At the bottom of economic density (rural areas, low-income) the oeprators are losing money with every loop they have to deploy and current regulations make them the carrier of last resort.  So they want to change things there too, by asking the FCC to let them provision voice using cellular technology instead of the loop.

I think this is the net of what's behind all the regulatory reviews on voice.
brookseven
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50%
brookseven,
User Rank: Light Sabre
1/30/2014 | 5:56:34 PM
Re: So, does copper go away?
You guys are assuming they are going to have 1 plan.  They have (as far as I can tell) 2 plans:

FiOS for FiOS territories

Wireless for non-FiOS properties

The question really is what is AT&Ts plan for non U-Verse properties?

 

seven

 

PS - TDM is not obsolete....unless you delete the Optical Transport layer...but copper surely is.
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