Is it possible that regulation is catching up with—or at least acknowledging--the changes that advanced technology has brought to the communications marketplace? The answer is a clear “yes” based on the issuance of the Declaratory Ruling, Second Report and Order, and Order on Reconsideration that was adopted last week by the FCC.
While the Commission was busy issuing many important decisions last week, this one is particularly notable for its regulatory recognition that the transition from legacy TDM (circuit switched voice services running over copper) to IP (multi-media-based) networks is proceeding at full throttle. With that in mind, the FCC has taken action. At the prompting of carrier advocate USTelecom (in the form of a petition for a declaratory ruling) the FCC has agreed that the designation of incumbent local exchange carriers as dominant “when providing interstate mass market and enterprise switched access services” be abandoned since, for all practical purposes in most parts of the country, such providers are no longer dominant. Bang.
With this acknowledgment in mind, the FCC has first removed the designation of incumbent carriers as dominant. Right off the bat, this takes a giant step forward in leveling the playing field between the embedded incumbents and other IP-based service providers who are offering similar services without some of the regulatory burdens imposed on the ILECs when they were, in fact dominant.
Secondly, the FCC created a new and simplified process for evaluating and approving requests from legacy voice providers to transition away from TDM (time division multiplexing) to IP-based services provided that such replacement services provide, according to the FCC, “adequate replacement for a legacy voice service.” This is particularly critical when considering issues related to not only 911 access and general interoperability, but to services offered in remote and rural areas, with particular attention to Tribal lands.
In practical terms, this action means that a provider can make a network transition from TDM to IP-based networks (legally—obviously the technical elements including planning and construction usually take significantly more time than this) in 30 days if the entity applying to the FCC for such permission can pass a voluntary 3 point test. The word “voluntary” is critical. Carriers who cannot—or choose not—to meet the terms of the test can still go through the process “the old-fashioned way,” but the timing for approval will be considerably longer.
The three point test requires:
The potential for litigation over what the word “substantially” (from Point 1) is significant as IP providers struggle to work out some of the technological kinks that exist between legacy equipment and IP services (consider, as an example, fax machines). The same litigation opportunity exists when considering the definition of what defines “current rules and standards.” The issues associated with the third point are obvious, but not insurmountable. By recognizing the challenges posed by the transition, the FCC clearly recognized and acknowledged not only the technological challenges, but the need to educate consumers on what these modifications may mean to end-users, not necessarily those who are technologically sophisticated or supported.
By taking this action, the FCC has formally acknowledged that the existing regulatory structure hasn’t always adapted to advances in technology. This move represents a huge step forward in acknowledging that the TDM, although not disappearing, is moving slowly toward sunset.