The FCC’s IP Transition: Two Key Perspectives

Kudos are due to FCC Chairman Wheeler for quickly announcing that “it is time to act with dispatch” on the IP transition, and putting that into swift action.

As the FCC refocuses on the IP transition, some important perspective is warranted.

First, the consumer-driven transition to IP in the marketplace is already three quarters complete.

• ~75% of Americans already have chosen to subscribe to a competitive digital service to replace their legacy copper POTS service, per USTelecom data.
• ~75% of American households already have chosen to buy and use IP broadband service; specifically ~84m American households subscribe to either cable or telco IP broadband service per Leichtman Research.   
• ~74% of total U.S. mobile phone users already have adopted IP smart-phones per eMarketer.  
• 96% of U.S. mobile subscribers already have chosen to have an IP data plan per Nielsen.
• 99.5% of the U.S. population has availability of IP wireless broadband service per the FCC’s 16^th mobile competition report.  
• 93% of U.S. households have cable IP broadband service available to them per NCTA.

Simply, at least three quarters of Americans already have transitioned to IP, and given current IP transition trends, virtually all Americans will have transitioned to IP by 2017, the FCC’s own timing goal to shut down the TDM copper architecture in the transition to IP networks, per the FCC’s National Broadband Plan.  

Importantly, the pace of the marketplace IP transition is increasing as the economics of IP are increasingly improving with Moore’s Law and as the economics of the rapidly obsolescing copper PSTN are increasingly deteriorating as fewer and fewer Americans subscribe to a system designed to operate for everyone.

Second, the U.S. Government and FCC’s successful transition to IP is now in its 20^th year.

• In 1993, the Clinton Administration effectively initiated the IP Transition, by directing the National Science Foundation, to privatize operation of the Internet backbone as the equivalent of an enhanced service (today’s information service) with privately negotiated peering agreements not subject to common carrier regulation.  
• In 1996, the Telecommunications Act formalized U.S. policy toward the IP Transition: “It is the policy of the United States… to preserve the… competitive free market… Internet… unfettered by Federal or State regulation.”
• In 1997, the Clinton Administration further formalized the IP Transition policy in its “Framework for Global Electronic Commerce;” where the first two principles were: “The private sector should lead.” “Governments should avoid undue restrictions on electronic commerce.” 
• In 1998, FCC Chairman Kennard further affirmed the Clinton Administration IP Transition policy of no common carrier regulation of broadband: “if we have the hope of facilitating a market-based solution here, we should do it, because the alternative is to go to the telephone world, a world that we are trying to deregulate and just pick up this whole morass of regulation and dump it wholesale on the cable pipe. That is not good for America.” 
• In 2002, the FCC formalized the IP Transition by unanimously classifying cable modem service as an information service.
• In 2004, the FCC furthered the IP Transition by classifying Voice over IP (VoIP) as an interstate service (4-1), and not subject to state common carrier regulation.
• In 2005, the FCC similarly furthered the IP Transition by unanimously classifying DSL as an information service. 
• In 2007, the FCC again similarly furthered the IP Transition by unanimously classifying wireless broadband as an information service.

In sum, the effective IP transition set in motion by the Clinton Administration in 1993, when it privatized the Internet backbone, is now at least three quarters complete in the marketplace, and is on pace to be functionally complete by the FCC’s 2017 goal in the National Broadband Plan.

The FCC’s IP transition task now is to synch up with the pace of the marketplace’s transition to IP and to smoothly and appropriately complete the FCC’s part of the IP transition by the FCC’s deadline of 2017.

The FCC could not be in better hands to achieve this IP transition goal by 2017.

That’s because FCC Chairman Wheeler was a key leader in the Federal Government’s last big technological transition, the DTV transition from analog to digital TV, and that transition went smoothly and was very successful.

Chairman Wheeler’s lessons learned from the successful DTV transition should help the FCC’s IP transition to go smoothly and successfully as well.  

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Modernization Consensus Research Series

Part 1: Implications of Google's Broadband Plans for Competition and Regulation - Part 1 Modernization Consensus Series [1-28-13]

Part 2: Developing Fundamental Consensus for the IP Transition - Part 2 Modernization Consensus Series [1-29-13]

Part 3: Why Europe is Falling Behind America in Broadband - Daily Caller Op-ed -- Part 3 Modernization Consensus Series [2-13-13]

Part 4: Will the New FCC Chair Be a Modernist or Nostalgist? Part 4 Modernization Consensus Series [4-2-13]

Part 5: The FCC Transition - Part 5 Modernization Consensus Series [5-7-13]

Part 6: The Modern FCC Competition-Policy Linchpin - Part 6 Modernization Consensus Series [10-21-13]

Part 7: A Modern Vision for the FCC - New White Paper - Part 7 Modernization Consensus Series [10-31-13]