TDM Legally Strolling Toward Sunset

Is it possible that regulation is catching up with -- or at least acknowledging -- the changes advanced technology has brought to the communications marketplace? The answer is a clear "yes" based on the Declaratory Ruling, Second Report and Order, and Order on Reconsideration that the Federal Communications Commission adopted earlier this month.

Of the many important decisions the FCC made this month, this one is particularly notable for its regulatory recognition that the transition from legacy time-division-multiplexed, or TDM (circuit-switched voice services running over copper) to IP (multimedia-based) networks is proceeding at full throttle. 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 (ILECs) 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 goes a long way in leveling the playing field between the embedded incumbents and other IP-based service providers 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 looking to transition from TDM to IP-based services -- as long as such replacement services provide "adequate replacement for a legacy voice service." This is particularly critical when considering issues related to 911 access and general interoperability, as well as 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 in 30 days (legally, that is -- obviously the technical elements, including planning and construction, usually take significantly more time than this) if the entity applying to the FCC for such permission can pass a voluntary three-point test. The word "voluntary" is critical. Carriers that 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. With this point, the FCC has clearly acknowledged not only the technological challenges, but also 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 TDM, although not disappearing, is moving slowly toward sunset.