The Migration to an All-IP Network

Last month the FCC recommended that carriers adopt a number of security measures to help block against hacking in the SS7 Signaling System 7). Anybody with telephone network experience is familiar with the SS7 network. It has provided a second communication path that has been used to improve call routing and to implement the various calling features such as caller ID.

Last year it became public that the SS7 network has some serious vulnerabilities. In Germany hackers were able to use the SS7 network to connect to and empty bank accounts. Those specific flaws have been addressed, but security experts look at the old technology and realize that it’s open to attack in numerous ways.

It’s interesting to see the FCC make this recommendation because there was a time when it looked like SS7 would be retired and replaced. I remember reading articles over a decade ago that forecast the pending end of SS7. At that time everybody thought that our legacy telephone network was going to be quickly migrated to all-IP network and that older technologies like SS7 and TDM would retired from the telecom network.

This big push to convert to an IP voice network was referred by the FCC as the IP transition. The original goal of the transition was to replace the nationwide networks that connect voice providers. This nationwide network is referred to as the interconnection network and every telco, CLEC and cable company that is in the voice business is connected to it.

But somewhere along the line AT&T and Verizon high-jacked the IP transition. All of a sudden the transition was talking about converting last-mile TDM networks to digital. Verizon and AT&T want to tear down rural copper and largely replace it with cellular. This was not the intention of the original FCC plans. The agency wanted to require an orderly transition of the interconnection network, not the last-mile customer network. The idea was to design a new network that would better support an all-digital world while also still connecting to older legacy copper networks until they die a natural economic life. As an interesting side note, the same FCC has poured billions into extending the life of copper networks through the CAF II program.

Discussions about upgrading connections between carriers to IP fizzled out. The original FCC vision was to take a few years to study the best path to an all-IP interconnection network and then require telcos to move from the old TDM networks.

I recently had a client who wanted to establish an IP connection with one of the big legacy telcos. I know of some places where this is being done. The telco told my client that they still require interface using TDM, something that surprised my client. This particular big telco was not yet ready to accept IP trunking connections.

I’ve also noticed that the costs for my clients to buy connections into the SS7 network have climbed over the past few years. That’s really odd when you consider that these are old networks and the core technology is decades old. These networks have been fully depreciated for many years and the idea that the cost to use SS7 is climbing is absurd. This harkens back to paying $700 per month for a T1, something that sadly still exists in a few markets.

When the FCC first mentioned the IP transition I would have fully expected that TDM between carriers would have been long gone by now. And with that would have gone SS7. SS7 will still be around in the last-mile network and at the enterprise level since it’s built into the features used by telcos and in the older telephone systems owned by many businesses. The expectation from those articles a decade ago was that SS7 and other TDM-based technologies would slowly fizzle as older products were removed from the market. An IP-based telecom network is far more efficient and cost effective and eventually all telecom will be IP-based.

So I am a bit puzzled about what happened to the IP transition. I’m sure it’s still being talked about by policy-makers at the FCC, but the topic has publicly disappeared. Is this ever going to happen or will the FCC be happy to let the current interconnection network limp along in an IP world?

An All-IP Telephone Network?

IPThe FCC posed a very interesting question to the industry. They asked if VoIP should become the only way of delivering voice service. This infers having an all-IP network that is extended out to every customer. The FCC asked this question as part of the IP trials that a few telcos are currently undertaking to see what an IP world looks like. While IP undoubtedly makes for the most efficient telco network, I think there many practical reasons why this can’t be implemented everywhere.

We can start with the FCC’s own estimate that there are something like 14 million rural homes without a broadband alternative. These are people who live in rural areas and are almost universally on old and sometimes very poor copper. These are people who can’t get DSL or cable modem and for whom VoIP would not work. There are also a ton of people in the country who are on marginal DSL service who also will have a hard time getting working VoIP. Most such people are also rural, but there are older urban networks with bad copper that also suffer from problems related to the condition of the copper.

But aside from the rural issue, it’s an interesting question. Cable companies already all use VoIP for voice, as do fiber overbuilds. Urban telcos could also give everybody VoIP, but it would mean providing a DSL connection to everybody on copper. This would cause all sorts of network problems. We found out years ago that you can’t put too many DSL lines into the same large copper sheathe or you create interference problems, and universal VoIP would put DSL on just about every copper pair. I also can’t think of any financial benefit to the telco for spending the money to put voice on DSL if that is all a line is going to be used for.

All of these issues make it hard to imagine mandatory VoIP at the customer end of the network. I’ve always envisioned that the IP transition would mean an all-IP network between carriers, which would create the most efficient network. But forcing VoIP where it won’t work right sounds both expensive and impractical. And it would likely boot millions from access to the voice network.

But there are other parts of an all-IP network that could be interesting. For instance, if the whole network was IP from end-to-end you could do away with telephone numbers. In an all-IP network each customer would be associated with an IP address, and so keeping telephone numbers would be forcing a historical structure onto an all-IP network. While we all would probably still have phone numbers, it would be just as easy to just pick somebody out of a computer menu by name and connect with them without going through the fiction that a number is required.

There are a few situations where going all-digital is a bit of a concern. Take 911. The current 911 network is comprised of a redundant pair of special access circuits between each carrier and each local 911 center. This network layout was created to greatly increase the likelihood that a 911 call can be completed. But in an all-IP world 911 traffic would probably be routed with everything else, which is not an issue of itself. But we know that Internet pipes go down all of the time. So anytime there was an Internet outage in a town or a region, 911 would go down with the Internet.

Of course, the FCC didn’t suggest this in a vacuum. They are being prodded in the whole IP-transition by both AT&T and Verizon who would like to get out of maintaining rural copper lines. AT&T has said many times that they want to cut down millions of rural lines and convert them to cellular. And so any pretense that the carriers are interested in creating a rural all-IP network is a fiction, because these large carriers don’t want to own or operate a rural landline connection of any kind. As we recently saw with a large sale of Verizon FiOS lines to Frontier I’m not sure that the two big telcos want to maintain any landline connections at all. These telcos are now mostly cellular companies who are finding landlines to be a nuisance.

AT&T Wants to Sell its Abandoned Copper

telephone cablesOn May 28th AT&T made an ex parte presentation to the FCC concerning some more of its ideas about the upcoming conversion of the current PSTN to an all-IP network. Most of this presentation is a very straightforward primer on how the copper network is structured today and what AT&T’s obligations are in terms of having to unbundle and offer various parts of the network to competitors as unbundled network elements.

But the kicker comes on the very last page of the presentation and is titled “AT&T Proposes to Sell its Retired Copper to CLECs” where they describe how they would offer abandoned copper to other carriers. You can see this Powerpoint here.

Let me put this into context. In Docket FCC-11-161A1 the FCC kicked off the process to begin the transition of the PSTN from today’s TDM based technology to an all-IP network. The FCC is proposing that carriers get together to replace the network that used today to interexchange voice traffic between them.

But AT&T has taken the opportunity to open the discussion of how they might be able to walk away from their old copper. In network terms, AT&T’s copper network is called their distribution network, meaning the network that they use to get from their central offices to customers. The FCC has never expressed any interest in requiring that the distribution networks should become all-IP. There are still millions of miles of very serviceable copper, and with newer technologies like G-Fast any copper in good condition can deliver pretty decent broadband speeds.

But AT&T keeps using this regulatory process to lobby the FCC to let them start walking away from customers on copper. Last year they said that they wanted to walk away from millions of copper lines and that in rural areas they plan to instead serve people using cell phones. Anybody who has tried to find bars of data on their cellphone in a rural area can tell you that there are huge parts of the geography in this country where there is no cellular data service. So what AT&T is really telling the FCC is that they want to abandon rural America.

In this presentation AT&T comes along with another idea to try to soften the FCC on this topic. This slide shows that they plan to sell abandoned copper to CLECs, which is their way to assure the FCC that these customers won’t really be abandoned when AT&T walks away. But this is incredibly cynical and supposes that any CLEC would actually want their old copper. There are a lot of practical issues involved in what AT&T is proposing that would not make this a very attractive business plan for a CLEC.

  • They want to sell the copper but not the customers and not the central office. There are plenty of companies who would be interested in buying the whole shebang, but AT&T wants to keep everything in the office that is served with fiber and just sell the old wires. This means the new CLEC would start on day one with no customers or revenue.
  • AT&T would require a CLEC to operate this copper from a collocation inside their office. This is incredibly difficult and costly. Collocation rules require CLECs to use costly paperwork to make any change inside of an AT&T central office. Doing something as simple as changing a power supply requires a detailed application and waiting for AT&T’s approval. In a case where a CLEC bought all of the copper in an office this paperwork would make it impractical to act competitively.
  • I have no idea how this would be practical on hybrid loops, meaning customers who are served both on fiber and copper. A good example would be a subdivision where AT&T has built fiber to the front of the subdivision and then jumps onto copper to get to homes. That kind of copper cannot be accessed from a collocation in a central office but requires an even more costly collocation where a CLEC has to build an access cabinet next to the existing AT&T one in the field. Because of this almost nobody competes today on hybrid loops.
  • AT&T wants CLECs to take over the full cost and maintenance of the old copper. That is mind-boggling, particularly in rural areas where this copper has been ignored and is in bad shape. AT&T and Verizon basically walked away from rural areas decades ago and shut down business offices, got rid of most technicians and stopped making new investments or even spending for normal maintenance. Look at the mess that Frontier got when they bought West Virginia from Verizon to understand the condition of rural copper.

AT&T is trying every tactic they can think of to make the FCC think it’s a good idea to let them walk away from rural copper. I can promise if they do so that there are going to be a whole lot of customers who will go dead and find themselves with no telephone or data service. If AT&T really wants out of the rural business they should sell the whole exchanges as Verizon has done. The idea of keeping the best part of their offices and only shedding the old copper is one of the more hair-brained ideas I’ve ever heard from AT&T. I can’t imagine any CLECs that will sign up for this idea. I really don’t think AT&T thinks this will work, but they are just hoping that the FCC staff is naïve enough to feel good about this if they think that abandoned customers will have an alternative.