The Digital Migration Purpose of Presentation Overseeing...
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1 November 6, 2003 November 6, 2003 Global Forum 2003, Rome, Italy Global Forum 2003, Rome, Italy 1 Overseeing the Digital Overseeing the Digital Migration: Migration: The Triennial Review Example The Triennial Review Example Brent M. Olson Brent M. Olson Deputy Chief, Competition Policy Division Deputy Chief, Competition Policy Division Wireline Competition Bureau Wireline Competition Bureau Federal Communications Commission Federal Communications Commission 2 November 6, 2003 November 6, 2003 Global Forum 2003, Rome, Italy Global Forum 2003, Rome, Italy Purpose of Presentation Purpose of Presentation n To describe the FCC’s recent Triennial To describe the FCC’s recent Triennial Review proceeding in the context of the Review proceeding in the context of the ongoing Digital Migration. ongoing Digital Migration. 3 November 6, 2003 November 6, 2003 Global Forum 2003, Rome, Italy Global Forum 2003, Rome, Italy Spectru Spectru m Radio/ Radio/ TV TV Coax Coax Vide Vide o Copper Copper Voice Voice OLD WORLD Analog/Narrowband Cable Cable 3G 3G DSL DSL Wi Wi- Fi Fi FTTH FTTH UWB UWB Powerline Powerline Fixed Fixed Satellite Satellite Mesh Mesh Laser Laser DTV DTV ANYTHING ELSE! ANYTHING ELSE! APPLICATIONS APPLICATIONS Voice; Video; Data Voice; Video; Data Old World • Competition—Limited/Govt. Sanctioned Monopolies • Market Structures—Balkanized—2-Dimensional—One Network/One Service • Consumer —Regulated Prices; No/Little Product Differentiation; Limited innovation • Innovation—Significant But Slow • Ubiquitous Networks—Universal Service Subsidies • Regulatory —Heavily Regulated with Strong Jurisdictional Boundaries New World • Competition—Multiple Facilities-Based • Market Structures—Converged—3-Dimensional—One Network/Many Services • Consumer —Lower Bundled Prices; More Innovation/Product Differentiation; Personalization/Customization • Innovation—Dynamic at all levels (Network/Applications/CPE) • Ubiquitous Networks—technological advances • Regulatory —Less Regulated—boundaries blur High Risk Massive Cap/Ex Political Anxiety Great Uncertainty Consumer Excitement /Confusion New Markets New Revenue Streams Investment/ Innovation Economic Growth Int’l Competitive Edge NEW WORLD Digital/Broadband The Digital Migration The Digital Migration The Digital Migration 4 November 6, 2003 November 6, 2003 Global Forum 2003, Rome, Italy Global Forum 2003, Rome, Italy Pre Pre-1996 Act Landscape 1996 Act Landscape (post 1984 break (post 1984 break-up of AT&T) up of AT&T) Primarily two types of telecommunications Primarily two types of telecommunications companies in the U.S. companies in the U.S. n Local monopoly telephone companies Local monopoly telephone companies n Long distance companies Long distance companies By law, local companies not allowed to By law, local companies not allowed to offer long distance, but given exclusive offer long distance, but given exclusive franchises to provide local service franchises to provide local service 5 November 6, 2003 November 6, 2003 Global Forum 2003, Rome, Italy Global Forum 2003, Rome, Italy Post Post-1996 Act landscape 1996 Act landscape All telecommunications markets opened to All telecommunications markets opened to all carriers all carriers n Note that largest local companies, the BOCs, required Note that largest local companies, the BOCs, required and, in all but one pending instance, have received and, in all but one pending instance, have received FCC approval before offering in FCC approval before offering in-region long distance region long distance Special rules for local markets Special rules for local markets n Local carriers required to open their networks at cost Local carriers required to open their networks at cost- based rates based rates – unbundling unbundling n Unbundling predicated, at a minimum, on whether Unbundling predicated, at a minimum, on whether competitors would be “impaired” without access to competitors would be “impaired” without access to that network element. that network element. 6 November 6, 2003 November 6, 2003 Global Forum 2003, Rome, Italy Global Forum 2003, Rome, Italy Federal/State Jurisdiction Federal/State Jurisdiction Regulation of telecommunications companies Regulation of telecommunications companies shared between federal government and state shared between federal government and state governments governments n Traditionally, states have jurisdiction over “intrastate” Traditionally, states have jurisdiction over “intrastate” communications communications -- -- communications that do not cross communications that do not cross state boundaries and federal government has state boundaries and federal government has jurisdiction over “interstate” communications jurisdiction over “interstate” communications n 1996 Act gave both federal and state governments 1996 Act gave both federal and state governments authority over unbundling and other competition authority over unbundling and other competition provisions provisions
Transcript of The Digital Migration Purpose of Presentation Overseeing...
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November 6, 2003November 6, 2003 Global Forum 2003, Rome, ItalyGlobal Forum 2003, Rome, Italy 11
Overseeing the Digital Overseeing the Digital Migration: Migration:
The Triennial Review ExampleThe Triennial Review Example
Brent M. OlsonBrent M. OlsonDeputy Chief, Competition Policy DivisionDeputy Chief, Competition Policy Division
Wireline Competition BureauWireline Competition BureauFederal Communications CommissionFederal Communications Commission
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Purpose of Presentation Purpose of Presentation
nn To describe the FCC’s recent Triennial To describe the FCC’s recent Triennial Review proceeding in the context of the Review proceeding in the context of the ongoing Digital Migration.ongoing Digital Migration.
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SpectruSpectrumm
Radio/ Radio/ TVTV
CoaxCoax
VideVideoo
CopperCopper
VoiceVoice
OLD WORLDAnalog/Narrowband
CableCable 3G3G
DSLDSL WiWi-- FiFi
FTTHFTTH UWBUWB
PowerlinePowerline FixedFixed
SatelliteSatellite MeshMesh
LaserLaser DTVDTV
ANYTHING ELSE!ANYTHING ELSE!
APPLICATIONSAPPLICATIONS
Voice; Video; DataVoice; Video; Data
Old World
• Competition—Limited/Govt. Sanctioned Monopolies
• Market Structures—Balkanized—2-Dimensional—One Network/One Service
• Consumer —Regulated Prices; No/Little Product Differentiation; Limited innovation
• Innovation—Significant But Slow
• Ubiquitous Networks—Universal Service Subsidies• Regulatory—Heavily Regulated with Strong Jurisdictional Boundaries
New World
• Competition—Multiple Facilities-Based
• Market Structures—Converged—3-Dimensional—One Network/Many Services
• Consumer —Lower Bundled Prices; More Innovation/Product Differentiation; Personalization/Customization
• Innovation—Dynamic at all levels (Network/Applications/CPE)
• Ubiquitous Networks—technological advances• Regulatory—Less Regulated—boundaries blur
High Risk Massive
Cap/Ex Political Anxiety
Great Uncertainty
Consumer Excitement/Confusion
New Markets
New Revenue Streams
Investment/ Innovation Economic
Growth Int’l Competitive
Edge
NEW WORLDDigital/Broadband
The Digital MigrationThe Digital MigrationThe Digital Migration
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PrePre--1996 Act Landscape 1996 Act Landscape (post 1984 break(post 1984 break--up of AT&T)up of AT&T)
Primarily two types of telecommunications Primarily two types of telecommunications companies in the U.S.companies in the U.S.nn Local monopoly telephone companiesLocal monopoly telephone companiesnn Long distance companies Long distance companies
By law, local companies not allowed to By law, local companies not allowed to offer long distance, but given exclusive offer long distance, but given exclusive franchises to provide local servicefranchises to provide local service
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PostPost--1996 Act landscape 1996 Act landscape
All telecommunications markets opened to All telecommunications markets opened to all carriers all carriers nn Note that largest local companies, the BOCs, required Note that largest local companies, the BOCs, required
and, in all but one pending instance, have received and, in all but one pending instance, have received FCC approval before offering inFCC approval before offering in--region long distanceregion long distance
Special rules for local marketsSpecial rules for local marketsnn Local carriers required to open their networks at costLocal carriers required to open their networks at cost--
based rates based rates –– unbundling unbundling nn Unbundling predicated, at a minimum, on whether Unbundling predicated, at a minimum, on whether
competitors would be “impaired” without access to competitors would be “impaired” without access to that network element.that network element.
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Federal/State Jurisdiction Federal/State Jurisdiction
Regulation of telecommunications companies Regulation of telecommunications companies shared between federal government and state shared between federal government and state governmentsgovernmentsnn Traditionally, states have jurisdiction over “intrastate” Traditionally, states have jurisdiction over “intrastate”
communications communications ---- communications that do not cross communications that do not cross state boundaries and federal government has state boundaries and federal government has jurisdiction over “interstate” communicationsjurisdiction over “interstate” communications
nn 1996 Act gave both federal and state governments 1996 Act gave both federal and state governments authority over unbundling and other competition authority over unbundling and other competition provisionsprovisions
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Task of Triennial Review Task of Triennial Review
To adopt comprehensive network unbundling rules that To adopt comprehensive network unbundling rules that also respond to court remands and outstanding petitions.also respond to court remands and outstanding petitions.
nn 1996 1996 –– Commission adopts first set of unbundling rules, Commission adopts first set of unbundling rules, overturned by Supreme Court.overturned by Supreme Court.
nn 1999 1999 –– Commission adopts second set of unbundling rules, Commission adopts second set of unbundling rules, overturned by appellate court.overturned by appellate court.
nn 2001 2001 –– Commission initiates proceeding to undertake Commission initiates proceeding to undertake comprehensive review of unbundling rules. Proceeding sweeps comprehensive review of unbundling rules. Proceeding sweeps in court remand as well over two dozen various petitions filed bin court remand as well over two dozen various petitions filed by y individual parties requesting changes to specific rules. individual parties requesting changes to specific rules.
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Scope of Triennial Review Scope of Triennial Review Debate focused on access to three major elements Debate focused on access to three major elements
nn Loops Loops –– the transmission facilities between an end user the transmission facilities between an end user customer premises and the central office where switching customer premises and the central office where switching and other routing equipment is generally housed.and other routing equipment is generally housed.
nn Transport Transport –– the transmission facilities that connect central the transmission facilities that connect central offices and send traffic through the network.offices and send traffic through the network.
nn Switching Switching –– the equipment that assigns circuits and routes the equipment that assigns circuits and routes telephone calls.telephone calls.
Other elements of lesser contention include OSS Other elements of lesser contention include OSS (operations support systems), signaling networks, (operations support systems), signaling networks, callcall--related databasesrelated databases
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Main stakeholders and their Main stakeholders and their positionspositions
Incumbent local telephone companiesIncumbent local telephone companiesnn Sought limited unbundling rulesSought limited unbundling rules
Copper loop only, limited access to high capacity loops and no Copper loop only, limited access to high capacity loops and no access to broadband.access to broadband.Lower capacity transport only in limited markets.Lower capacity transport only in limited markets.No unbundled access to switching functionality.No unbundled access to switching functionality.
CompetitorsCompetitorsnn Sought extensive unbundling rulesSought extensive unbundling rules
All loops regardless of capacity or technology.All loops regardless of capacity or technology.All transport links regardless of capacity All transport links regardless of capacity –– only removed when fully only removed when fully functioning wholesale market on a particular routefunctioning wholesale market on a particular routeUnbundled access to both circuit and packet switchingUnbundled access to both circuit and packet switching
Equipment Vendors (HighEquipment Vendors (High--Tech Broadband Coalition)Tech Broadband Coalition)nn No unbundling of new broadband investment No unbundling of new broadband investment –– FTTH and FTTH and
packet switching.packet switching.
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The FCC’s DecisionThe FCC’s Decision
LoopsLoopsnn Unbundling distinctions based on loop technology. Unbundling distinctions based on loop technology. nn Generally, loops using legacy technology, copper Generally, loops using legacy technology, copper
loops and hybrid fiber/copper loops using legacy TDM loops and hybrid fiber/copper loops using legacy TDM (time division multiplexing) technology, are unbundled (time division multiplexing) technology, are unbundled while loops using newer technology, FTTH and hybrid while loops using newer technology, FTTH and hybrid fiber/copper loops using new packetfiber/copper loops using new packet--based based technology, not unbundled.technology, not unbundled.
nn For high capacity loops using TDM technology For high capacity loops using TDM technology (known as DS1s and DS3s), states asked to (known as DS1s and DS3s), states asked to determine whether competitive alternatives exist or determine whether competitive alternatives exist or could exist on a locationcould exist on a location--byby --location basis.location basis.
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The FCC’s Decision (cont’)The FCC’s Decision (cont’)
Interoffice Transport Interoffice Transport nn No unbundling of the highest capacity No unbundling of the highest capacity
transport, i.e., transport using optical transport, i.e., transport using optical transmission (OCn).transmission (OCn).
nn States asked to determine, subject to specific States asked to determine, subject to specific FCC guidance, whether competitive FCC guidance, whether competitive alternatives exist or could exist on a routealternatives exist or could exist on a route--byby--route basis for lower capacity transport route basis for lower capacity transport (DS1sand DS3s).(DS1sand DS3s).
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The FCC’s Decision (cont’)The FCC’s Decision (cont’)
SwitchingSwitchingnn Generally no unbundling for customer Generally no unbundling for customer
connections of DS1 capacity and above.connections of DS1 capacity and above.nn For lower capacity connections, states, For lower capacity connections, states,
subject to specific FCC guidance, asked to subject to specific FCC guidance, asked to define market areas and determine whether define market areas and determine whether competitive switching alternatives are or could competitive switching alternatives are or could be available in those markets. be available in those markets.
nn Only circuit switching unbundled, no Only circuit switching unbundled, no unbundling of packet switching.unbundling of packet switching.
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Major Themes Underlying Major Themes Underlying Decision Decision
GranularityGranularity –– places new emphasis on line drawing places new emphasis on line drawing through use of markets and more specific identification through use of markets and more specific identification of facilities. Reliance on state investigation and analysis.of facilities. Reliance on state investigation and analysis.Marketplace realitiesMarketplace realities –– places primary reliance on places primary reliance on marketplace facts, but not to the exclusion of marketplace facts, but not to the exclusion of marketplace potentialities.marketplace potentialities.Investment incentivesInvestment incentives –– makes distinctions between makes distinctions between legacy network elements and network elements requiring legacy network elements and network elements requiring new investment, notably broadbandnew investment, notably broadband--related investment.related investment.Intermodal alternativesIntermodal alternatives –– all potential competitors and all potential competitors and competitive platforms, not just telephonecompetitive platforms, not just telephone--specific specific platforms, factored into unbundling analysis.platforms, factored into unbundling analysis.
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ConclusionConclusion
Triennial Review is only one of many examples Triennial Review is only one of many examples of the FCC’s ongoing attempt to adapt its of the FCC’s ongoing attempt to adapt its regulatory regime in the face of the Digital regulatory regime in the face of the Digital Migration.Migration.Many other examples, including:Many other examples, including:nn Regulatory classification and treatment of broadband Regulatory classification and treatment of broadband
servicesservicesnn Treatment of Voice over Internet Protocol (VoIP)Treatment of Voice over Internet Protocol (VoIP)nn Intercarrier CompensationIntercarrier Compensation
