The United States is in the midst of a historic network transition that FCC Chairman Wheeler has called “the fourth network revolution,” comparing it to the invention of the printing press, the birth of the railroad, and the advent of instantaneous communication made possible by the telegraph and the telephone. The source of this revolution, like the three that preceded it, is nothing less than human genius. A series of inventions including, among others, the microprocessor, fiber optics, cellular communications networks, packet-switching and the Internet protocol, made this revolution possible. While it is in the first instance a revolution in technology, it has disrupted and transformed industries across the economy. It has revolutionized the way we live, work and play, and brought a myriad of benefits to consumers and to the nation as a whole.
It is also transforming the communications business at an extraordinary rate. Although many might not even be aware they have done so, a significant majority of Americans have already transitioned away from circuit-switched telephony. In the 22 states where AT&T is the legacy “phone company,” more than 70 percent of residential consumers have abandoned legacy phone service choosing instead to go with wireless services or VoIP services. And the number of housing units still connected to circuit-switched services provided by the legacy phone company has dropped below 20 percent in some areas.
So many consumers have made this transition for the simple reason that IP-based services provide them with far greater value than circuit-switched telephony. Mobility, text-based communications, video chat, and social networking are just a few examples of the extraordinary benefits that IP networks enable for their users. And these may be just the beginning. The continuing integration of IP networks with cloud computing and the Internet of things will leave circuit-switched telephony so far behind that the only place left to it will be somewhere in the Smithsonian.
As the Commission recognized in its historic National Broadband Plan, it is not indefinitely sustainable to operate a shrinking TDM network in parallel with a growing IP network. In 2012, AT&T undertook a review of its business in light of the changes catalyzed by the rise of broadband IP networks. As a result of that review, we announced Project Velocity IP (VIP), an initiative to respond to the rapid shift in demand from traditional telephone services to IP and high-speed broadband services by transitioning its network to all-IP wireline and wireless infrastructure. As part of that initiative, AT&T announced that it would undertake a significant additional investment in wireless and wireline broadband networks to support future IP data growth and new services.
On the same day that we announced Project VIP, we also filed at the FCC a request to begin geographic industry-wide trials under which incumbent LECs could establish real-world test-beds on a small scale to provide a forum for identifying the operational, technical and logistical issues that could arise when the remaining TDM customers must transition to next-generation wireless and IP-based alternatives.
We have proposed conducting the trials in Carbon Hill, AL, and in West Delray Beach, FL. We chose these locations in an effort to gain insights into some of the more difficult issues that likely will be presented as we transition from legacy networks. For example, the rural and sparsely populated wire center of Carbon Hill poses particularly challenging economic and geographic characteristics. While Kings Point’s suburban location and large population of older Americans poses different but significant challenges as well. The lessons we learn from these trials will play a critical role as we begin this transition in our approximately 4700 wire centers across the country to meet our goal of completing the IP transition by the end of 2020.
Importantly, in developing our plans for the trials, as well as the IP transition in general, we were guided by certain, fundamental principles and values, which were articulated by the Commission in its order authorizing these trials and have formed the basis of communications law and policy over the past century. These are the principles and values that have made America’s communications network the envy of the world – universal connectivity, consumer protection, public safety, reliability and competition. These should continue to apply as we complete the transition to all-IP networks and services while also evolving to reflect marketplace and technological developments.
AT&T commends the Commission for opening this proceeding and we’re excited to begin these trials. Here are the details on how the trials will be conducted and all the advanced services consumers and businesses in the trial areas will have access to.