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The Luddites vs. the Innovators

by Russell Bennett, UC Insights

May, 2013

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When you saw the title of this article, you probably thought that you had ended up on ESPN.com and that this was about a college sports rivalry: possibly a traditional school against an engineering school.  However, this article is following my usual theme: unified communications (UC).  Those who may have read some of my previous articles can probably guess that the ‘Luddites’ are the incumbent Telcos and the Innovators are the IP communications vendors that have to struggle mightily on a daily basis to get their message across that a product or service that is cheaper and better is in fact…better.  The Telcos on the other hand, in order to fend off these pesky Innovators in an ostensibly one-sided battle, have to resort to the kind of underhand, ‘the-end-justifies-the-means’ tactics that we normally only see in certain genres of movie and TV drama.

Straight from JR Ewing’s playbook

In previous articles, I have focused on various Luddite tactics such as:

I refer to these gambits as ‘tactics’ because I struggle to find any indication that there is an overall Telco strategy in play, and that their sole motivation is self-perpetuation.  In this article, I am going to cover the attempt to control and restrict the issue of ‘telephone numbers’ as a way to constrain competition from IP communications service providers.

Brief sidebar rant on the idiocy of ‘phone numbers’

In many ways, it is strange that I would be defending open access to telephone numbers, since I have to admit that I find them anachronistic:

  • They are not mnemonic.

  • They have no association with:

    • The ‘persona’ of the individual you are trying to reach (i.e. home, work, mobile, etc.)

    • The capabilities of the device (i.e. voice, video, text, etc.)

  • They no longer have anything to do with addressing or routing of the ‘call’ – on an IP network, the ‘phone number’ is merely a ‘unique key’ that enables the discovery of the IP address associated with the destination device.

    • [I still recall my induction course at British Telecom Research at Martlesham Heath in 1987, where we saw a demonstration of a ‘museum piece’ telephone switch to explain how pulse dialing worked.  If you are too young to remember this, you can see it on YouTube.]

  • The semi-arbitrary 10-digit phone number limit (in the US) ensures that the pool of available numbers is near exhaustion.  Since address exhaustion is the same reason for the IPv4-v6 upgrade, it makes no sense to stick with phone numbers, especially since IPv6 makes available 100 IP addresses for every atom on the surface of the planet (according to Cisco).

Rather than dialing a random 10 digit string, we might just as well ‘dial’ IP addresses (as with ISDN) – but most people would, ironically, view that idea with scorn.  Regrettably, it seems unlikely that the nascent IP version of the PSTN (due, according to the FCC in 2018) will use mnemonic, email-like addresses such as ‘president@whitehouse.gov’.   The ostensible reasons are user familiarity, backwards compatibility; unification with international networks and the challenges of phasing in a new addressing mechanism.  (Much the same reasons why Japan, the UK and many of the former UK colonies still drive on the left side of the road.)   Therefore it is almost a forgone conclusion that the new public communications network will have phone numbers as its address mechanism.

Attempts to kill ‘voice on the net’ at an early age

I recall a conversation I had over 10 years ago with some AT&T executives, where they referred to Vonage, an IP communications pioneer, as “the V word”.  The notion that a startup with a few servers and a web site could set up a credible telephony competitor drove them into apoplexy; although Vonage had less than 10,000 subscribers at the time.

To be fair to the Telcos, the IP communications providers have, for the most part, been exempt from telecommunications regulation.  The Telcos’ perspective is probably that they aren’t on a level-playing field because they have to operate a range of unprofitable services that are mandated by regulation; whereas the IP providers do not.  The counter argument to that is that the incumbent Telcos have, relatively speaking, unlimited resources and always had the opportunity to develop competing technologies.  Had they deployed next-gen technologies under their own brand, the regulations would probably have applied to the next-gen services also; but they could have created ‘greenfield’ IP provider companies that would have been exempt as the others were.   However, I suspect that they believed that the next-gen network would be all mobile; and that is where they invested their capital.

By 2004, AT&T and various ‘birds of a feather’ had implemented a campaign of intellectual property litigation, legislation and the invocation of federal regulations to constrict Vonage’s ability to lure ‘their customers’ away from them.  These schemes included ‘lobbying’ Congress and the FCC to restrict the access of Vonage, and similar companies, to various shared resources enjoyed by the incumbent Telcos and which were mandated by the FCC.  Restricting IP carriers’ access to emergency calling (911) worked quite well until 2008 when the 911 ‘blockade’ was broken in the interests of public safety.  Another ‘weapon of choice’ was restricting the access of the IP providers to the national pool of telephone numbers.

Of course, you have always been able to get a telephone number from the IP carriers, but they had to purchase those from wholesale carriers, e.g. Level(3) Communications.  Since those numbers were ostensibly owned by the intermediaries, the incumbent Telcos were ‘compelled’ (i.e. chose) to route calls for IP carrier customers to the intermediaries.  This increased costs, administrative and routing complexity as well as reduced call quality for the IP carriers.  For example, transferring your current telephone number to Vonage took longer than with an incumbent because they (Vonage) couldn’t directly access the Local Number Portability system.

And the walls came a tumblin’ down

The efforts of the incumbent Telcos to limit the appeal of IP communications were ultimately in vain. In 2009, the Obama administration published a policy paper that effectively reversed the previous administration’s policy with regard to regulation of IP communications.  That, coupled with:

  • The growing need to retire the obsolescent PSTN;

  • The self-evident appeal of multi-modal communications and related IP-based innovations;

  • The advent of the smartphone era that has people consuming far more wireless bandwidth than we would have previously thought possible;

…meant that the next generation communication network would have to be carried on both wire line and wireless networks.  Furthermore, while the incumbents were using regulations to impede the IP carriers, they were, in parallel, feverishly lobbying (not to mention suing) the States and the FCC to be relieved of their onerous regulatory obligations.  Therefore, it was inevitable that the Telcos were going to have to acknowledge the IP carriers, since they were destined to become all-IP carriers themselves: thus the FCC had to relax its restrictions on the distribution of ‘telephone numbers’.

On April 18th, the FCC ruled that a trial group of IP carriers (i.e. Vonage, Bandwidth.com, SmartEdgeNet LLC, Millicorp LLC) could be given access to the various communications infrastructure components that would also allow them to directly issue telephone numbers.  This trial also allows ‘interested parties’ a period in which they can comment on the outcome of the trial: so this isn’t yet finally resolved.

Of course, the incumbents fought, and will continue to fight, their case ‘tooth and nail’.  Among other tactics, they argued that the scope of key regulations (i.e. sections 251 and 252 of the Communications Act) was unclear and that the FCC should carefully consider whether it was ever intended that these regulations pertain to VoIP.  To this the FCC responded that “[t]he duty to negotiate in good faith has been a longstanding element of interconnection requirements under the Communications Act and does not depend upon the network technology underlying the interconnection.”


Although this FCC document may not be a 'page-turner' and presents a distinctly unattractive picture of the workings of government, it gives an interesting insight into the machinations of ‘special interests’ and lobbyists.  It also illustrates the byzantine complexity of the PSTN and the regulations that support it.  If nothing else, it provides a compelling argument for shutting the entire mess down before it collapses under its own weight.

With regard to the specific issue of whether the incumbent Telcos will be able to maintain their pseudo-monopoly over the communications industry: that appears to be on the path to resolution.  In his closing statement in the FCC document, the Chairman of the FCC, Julius Genachowski stated:

“This access to numbers proceeding has been going on since 2005, with many of the same comments and replies traded between parties time and again.  But the record we’ve received to date too often has simply been filled by hypothetical concerns answered with hypothetical solutions.  It’s time for some data.  The trial we adopt today is consistent with the data-driven approach we’ve adopted agency-wide, it will help us protect consumers, and I’m glad we’re moving it forward.”

As to whether the Innovators will finally overcome the Luddites, I think that the outcome is inevitable but the date is indeterminate.  To misquote Churchill: this isn’t the end, or the beginning of the end, but it is at least the end of the beginning.

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