The public-network IP transition is coming. It will greatly impact what we know as the telco Central Office (CO). It will change the meaning of the tandem switch, which is the network switch that connects trunks together to create long distance connections among COs.
The IP transition will also change the meaning of CO because once an IP call is established, the call will be routed peer-to-peer through the IP network. The call will be established by the new IP CO (actually a data center) but will traverse the network bypassing the IP CO. The IP CO becomes the signaling and management control point for the calls, but the calls do not pass through the IP CO as they do in legacy calls.
At the recent Genband Perspectives 14 conference, a paper was provided to the attendees, "The Unsustainable Power Costs Behind one of the Oldest Public Utilities." The theme of the paper is centered on power consumption and cooling costs of the public switched telephone network--PSTN (or plain old telephone service, POTS) in comparison with costs after the IP transition. Below I've outlined some of the most notable observations to spring from the paper.
COs Decline
There are currently 35,000 COs in the U.S. After the IP transition, there will be an 85% reduction in real estate requirements. This means that the network control points will be far fewer and much further away from the endpoint than today. See the map below from the paper.
Every state will see a significant reduction in CO locations after the transition. States that now have dozens of COs will be reduced to 10 to 20 IP COs (See states like Arizona and Kentucky on the map above). The number of IP COs will be much smaller, but there will still be need for network closets throughout the IP network external to the IP CO locations. These closets will route the signaling traffic to the IP COs. The IP COs will then create peer-to-peer connections among the many network closets.
Improved Network Resiliency
One of the major values of this configuration is that one IP CO can back up another failed IP CO in a distant location, as is possible with today's IP PBXs. There will also be multiple pathways among the network closets that can be avoided during network congestion or failure.
I expect that the IP CO network will also take advantage of Software Defined Network (SDN) technology to ensure good call QoS and rapid response to network problems. We will have a more resilient network than that offered today with legacy switches. Today, if the CO fails, the customer has no alternative but to wait for service restoration. The legacy switches are very reliable but a loss of power during a storm also means a CO failure when the backup power does not work. (See "Fives Nines and Acts of God").
Legacy Network Operational Cost is High
The providers are still maintaining the PSTN, which is filled with equipment that requires significant power and real estate to operate. The legacy COs consume 12 billion kWh per year in the U.S. This is equal to the annual power consumption of about 1 million homes. The annual expected power savings of transitioning to the IP CO network is about $1.3 billion.
The real estate to house the legacy switches is also significant. The Genband paper estimates that the elimination of legacy COs will save up to 10,000 square feet of space per CO. The total space saved could be as high as 300 million square feet throughout the U.S.
What may not be obvious is that water is part of the switch cooling process. An estimated 16.8 billion gallons of water will not be needed when the COs are reduced after the IP transition.
Creating the power for legacy systems results in carbon dioxide emissions. The reduction in power consumption by the COs means a consequent 40% reduction in carbon dioxide emissions.
Who Benefits?
The environment will benefit from the reduction in water consumption and lower CO2 emissions. These two benefits, though, may end up as part of the provider spin to justify the IP transition, but are not the real reasons for the migration.
What I wonder is: Will the reduced legacy OPEX cost translate to savings in the service cost to consumers and enterprises now on the PSTN? Will providers try to keep their service costs high, justifying the high rates as a means to pay for the transition? Probably.
I think the regulators should factor in the significant OPEX savings to providers described above as an offset for the CAPEX incurred by providers for the IP transition. I expect all this OPEX reduction will go to the bottom line of providers, not the bill for the consumers and enterprises.
