Kevin Werbach e Wharton School, Univ. of Pennsylvania

werbach@wharton.upenn.edu

No Dialtone e End of the Public Switched Telephone Network (full paper available at http://bit.ly/16Ve7re)

e PSTN “Any common carrier switched network, whether by wire or radio, including local exchange carriers, interexchange carriers, and mobile service providers, that use the North American Numbering Plan in connection with the provision of switched services.”

47 C.F.R. §20.3

e PSTN “Any common carrier switched network, whether by wire or radio, including local exchange carriers, interexchange carriers, and mobile service providers, that use the North American Numbering Plan in connection with the provision of switched services.”

47 C.F.R. §20.3

e PSTN “Any common carrier switched network, whether by wire or radio, including local exchange carriers, interexchange carriers, and mobile service providers, that use the North American Numbering Plan in connection with the provision of switched services.”

47 C.F.R. §20.3

POTS

One of the Great Technological Achievements in Human History

e PSTN is Dying

•  Residential switched access lines –  194 million in 2000 –  101 million 2012

•  % of US Households with POTS –  93% in 2003 –  25% in 2013

•  Why? IP convergence + wireless –  43% of homes wireless-only and 32%

served by VOIP by end of 2013

Going, Going…

•  AT&T Trials Petition (11/7/12) –  No requirement to maintain legacy PSTN networks –  No obligation to interconnect –  Customers can be transitioned to IP-based without permission

•  AT&T Infrastructure announcement (same day) –  $14 billion over 3 years to upgrade 75% to U-Verse;

the rest served via wireless

•  Verizon’s Lowell McAdam (July 2013) –  “[E]very place we have FiOS, we are going to kill the copper. We are

going to just take it out of service and we are going to move those services onto FiOS.”

–  “[In rural areas,] we are going to cut the copper off there. We are going to do it over wireless.”

•  2009 NBP public notice •  TAC initiative •  2011-12 Workshops •  Technology Transitions Task Force •  5/13 public notice on trials

Verizon’s Response

What Voice Link is Missing •  Medical alert home monitoring services

•  Telecommunications relay service for the deaf and hard of hearing

•  Digital Video Recorder (DVR) program guide downloads

•  Credit card processing terminals for small businesses

•  ATM machines for small businesses

•  Home alarm monitoring

•  Calling to 900-number (paid) services

•  Collect calls

•  Calling cards or other dial-around calls

•  International dialing (without a supplemental plan)

What to Make of is •  e transition is a good (and necessary) thing. •  Unnecessary regulation or "nancial burdens are bad.

But… •  Neither the rationale nor the content of telecom

regulation is necessarily tied to a technology. •  Our expectations of the PSTN haven’t diminished.

Legacy Silo Legal Structure

Data

Telephony (Title II)

Cable (Title VI)

Broadcast (Title III)

(also legacy slides – from 2005!)

Data Voice

Emerging Reality

Web

Email

Video

File Transfer

Data Voice

Emerging Reality

Web

Email

Video

File Transfer

All or Nothing Regulation •  Ad hoc response to VOIP under ancillary authority •  Open Internet Order mess

Road to Nowhere?

Six Dimensions of the PSTN

1.  a technical architecture 2.  a regulatory arrangement 3.  a business and market

structure 4.  universal connectivity 5.  strategic national

infrastructure 6.  a social contract

1.  a technical architecture 2.  a regulatory arrangement 3.  a business and market

structure 4.  universal connectivity 5.  strategic national

infrastructure 6.  a social contract

What Remains?

Interconnection

•  Distinguish from non-discrimination –  Central issue is universality, not fairness

•  Are commercial forces enough? –  Comcast-Level 3, Cogent-Verizon –  Terminating access monopoly –  Port capacity and other variables

•  Impact of usage caps and end-user pricing •  FCC data roaming requirement:

“commercially reasonable terms,” with dispute resolution (upheld by DC Circuit)

Coordination

•  47 USC §256(b)(1): “oversight of coordinated network planning by … providers of telecommunications service….”

•  Numbering –  Some unresolved technical standards for VOIP interconnection –  Need for PSTN-to-IP number portability database

•  Network reliability –  E.g. requirements for battery backup

Social Commitments

•  Emergency services (E911) •  Universal service •  Disability access •  Data privacy (CPNI) •  Consumer protection (slamming/cramming) •  Law enforcement access (CALEA) •  Etc.

Making it Work

Transition Mechanisms •  “No carrier shall discontinue, reduce, or impair service … unless and

until there shall "rst have been obtained from the Commission a certi"cate that neither the present nor future public convenience and necessity will be adversely affected thereby.” 47 USC §214(a)(3)

•  Cutting the Gordian Knot of Internet regulation •  Requirements for 214 approval

–  Interconnection on commercially reasonable terms, subject to arbitration and disclosure requirements.

–  Participate in coordination mechanisms for PSTN-to-IP numbering integration and network reliability.

–  Continue to meet social obligations.

Date Certain •  Analogy to DTV transition

–  Most proposals suggest 2017 or 2018

•  Date certain for what exactly? –  AT&T’s view: When TDM interconnection rights end

•  My proposal: carriers meeting interconnection, coordination, social contract obligations freed from legacy requirements at that point

•  Trials and troubleshooting for implementation surely will be required

I have to hang up now…

Full paper available at http://bit.ly/16Ve7re

werbach@wharton.upenn.edu Twitter: @kwerb

Photo Credits •  Slide 1: Iraxmas (http://www.#ickr.com/photos/iraxmas/390798973/)

•  Slide 2-4: Science Museum London (http://www.#ickr.com/photos/sciencemuseum/7642672140/)

•  Slide 6-7: Kim Seng (http://www.#ickr.com/photos/captainkimo/8717789122/)

•  Slide 10-12: US Fish & Wildlife Service (http://www.#ickr.com/photos/usfwsnortheast/8151170166/)

•  Slide 18: Para#yer (http://www.#ickr.com/photos/para#yer/463387468/)

•  Slide 19-20: Nicholas Smale (http://www.#ickr.com/photos/nicholassmale/2653055999/)

•  Slide 21-24: Chris Campbell (http://www.#ickr.com/photos/cgc/5259321/)

•  Slide 25-26: Library of Congress (http://www.#ickr.com/photos/library_of_congress/2179061201/)

•  Slide 27: Keith Williamson (http://www.#ickr.com/photos/elwillo/6452275823/)

•  Slide 28: AJC1 (http://www.#ickr.com/photos/ajc1/3367295141/)