With a 5-0 vote on January 30 to approve an AT&T petition that allows voluntary trials of all-Internet Protocol (IP) communication networks, the Federal Communications Commission (FCC) has recognized the inevitable: communications networks are rapidly changing from circuit-switched Time Division Multiplexing (TDM) technology running on copper wires to IP technology. The bi-partisan FCC vote recognizes that it is time to begin serious work on the thorny transition issues as the industry converts old fashioned phone networks with modern ones necessary to the nation’s modern commerce. This order is important to California IT managers who purchase from incumbent telephone companies like AT&T or Verizon.
The FCC estimates that 40% of households in the U.S. have “cut the cord” to their wireline telephone and receive wireless voice services only. According to estimates from the trade group U.S. Telecom, by the end of 2013, less than 30 percent of homes will rely on the switched network as their primary voice provider. Further, according to Commissioner Jessica Rosenworcel, the number of TDM-based landline telephone access lines have gone from 200 million in year 2000 to only 96 million in December 2013, reflecting a move towards interconnected Voice Over Internet Protocol (VOIP) of 42 million lines.
As a result of these massive shifts in communications technology, the large incumbent phone companies like AT&T and Verizon have a “white elephant” on their hands with the aging copper-based networks. To remain competitive with other broadband companies such as the cable companies, they need to transition their TDM technology wireline voice networks to VOIP services that will run on multi-purpose IP-based broadband networks. However, federal and state regulatory wheels turn oh-so-slowly, especially with hot potato social issues like universal service and Lifeline services. An FCC Technology Transitions Task Force has been working on these transition issues for over a year, resulting in this long awaited FCC action.