The VCXC - Voice Communication Exchange Committee - is a Washington, DC based startup nonprofit, modeled on the Advisory Committee on Advanced Television Service.
Choosing Between World Peace and Utility Model in Communication by Daniel Berninger
The exodus of the communicating public from the PSTN threatens the utility regulation of telephone companies. The proliferation of communication applications using unregulated information technologies creates the policy equivalent of heating a house with every window and door open. A 50% increase in the annual funding of the FCC since 2000 corresponds with a 70% decline in the end user constituency of regulated networks. The adoption of Internet like IP networks by telephone companies leaves policy makers heating an empty house.
The resulting crisis among defenders of the utility model reflects a remarkable irony. Forces shaping communication networks represent the literal (not just metaphorical) realization of a war game. There exist warrior modes of interaction with zero sum (I win/you lose) consequences and peacenik modes with non-zero sum (I win/you win) outcomes. Utility regulation arose as a means for peaceniks to contain the threats posed by the warriors in control of communication networks. Internet protocol put the peaceniks in control of the communication network. The subsequent decline of the regulated PSTN and embrace of the IP networks forces peaceniks to choose between world peace and the utility model of communication.
The defenders of utility regulation argue the threat of market power and vertical integration remains unchanged by a transition to all-IP networks. The solution in the form of utility regulation also remains unchanged since the arrival of government intervention with Kingsbury Commitment 100 years ago. The case for non-regulation starts with adding world peace to the stakes in play. IP networks provide a means of comprehensive communication connecting humanity across all distances without regard to country of origin. The risk regulations pose to IP networks as a new font of communication abundance takes world peace off the table in any return to utility regulation. Conceding the need to regulate IP communication grants fragmented jurisdictions of authority across 200+ countries the right and ability to disrupt the global flow of communication.
The reluctance to regulate the Internet reflects recognition of the social benefits generated by the network of networks in the absence of government intervention. No one anticipated the juggernaut to emerge from the internet protocol at the moment of invention in 1973. Nor even beyond a few true believers and futurists 20 years later in 1993 did anyone suspect the extent of the transformation of communication by 2013. The promise of IP networks reflects the continuous improvement possible in an ecosystem driven by software innovation and an inexorable Moore's Law doubling of transistor density. The nature of the utility model of communication yields a telephone service entirely unimproved over the same 40 year period.
Even utility theorists concede the Internet as a special case where non-regulation works, but the Internet represents an existence proof for the benefits of any IP network. Internet protocol alters the mathematical imperatives of communication networks as a war game. The transition to all-IP networks by telephone companies creates new opportunities for revenue growth like HD voice and a diversification of services speeding the return on investment capital. Moore's Law promises an on going reduction in the unit cost of network capacity and a sustainable means to expand addressable market entirely missing in the case of the PSTN.
Peacenik's cannot avoid the requirement for a presumption of innocence in any fair trial of the threat the transition to unregulated all-IP networks poses to the communicating public. Regulators skeptical about the unique merits of IP networks remain obligated to identify market failures justifying re-regulation. Calls to defend the regulatory status quo must remain linked to explicit social benefits. In any case, no one can argue preserving the utility regulation of telephone companies contributes to the cause of world peace...the time has come to give peace a chance.
World Peace by Daniel Berninger
Seventeen years ago this week, John Perry Barlow identified world peace as the purpose of connecting humanity to the Internet. Skeptics complain about the grandiosity of "A Declaration of the Independence of Cyberspace", but critique of the status quo and aspiration for world peace continues to unify Internet advocates. The sentiment represents a common thread from Susan Crawford to Kim Dotcom to the Occupy movement and the hactivist collective Anonymous.
The first observation I would make is that we have it within our grasp to connect every person on the face of the Earth to each other and all human knowledge. We have an opportunity to pursue a policy of plenty versus poverty." "We would would have to be a pretty stupid species not to take advantage of this opportunity, but there are problems..." Vint Cerf
Freedom2Connect Conference, Washingtion, DC May 21, 2012.
The number of Internet connections rose from 35 million at the time to 2.4 billion today, but world peace awaits the new Social Contract John Perry Barlow promises in the first half of the of Declaration. Social contracts like coercion provide a means of navigating the human capacity for horror and virtue. Social contracts aka governance represents a central question in philosphy beginning with Plato's "The Republic" circa 380 BC and the controlling factor in quality of life from Somalia to Switzerland. Barlow's Declaration points to the Internet as something new for philosophers pondering means to world peace. Territorial demarcations from fences between neighbors to international borders become less important to the extent communication alters the arbitrary power of birthplace over opportunity.
Barlow's Declaration questions the wisdom of delegating this new means of world peace to the power politics between nation states and "obsolete information industries". The deference to territorial borders also originates as a means to world peace (Peace of Westfalia, 1648 ) and solution to long standing wars. The embrace of the model by the Founding Fathers of America in 1776 reflects the realities of a period when sending a letter from Boston to Philadelphia took a week and over month from Philadelphia to London. Barlow channels Jefferson in the Declaration and recognizes the Internet as a new way to address universal human aspirations for survival, safety, and social connection.
It seems long over due to heed Barlow's call to start a conversation about a Social Contract benefiting humanity as a whole. Rather than relying on individual companies and policymakers to implement "Do No Evil" principles, cybercitizenry can choose service providers complying with cyber-citizen friendly terms of service. A given terms of service either facilitates communication capacity and trust without regard to geography, or it does not. The Internet offers both means and end in this context. There already exists some push back against companies asserting unfavorable terms of service. The next step involves pushing service providers to adopt a model Terms of Service (aka Social Contract) created by cyber citizens.
Explicitly pursuing world peace shrinks the Internet governance solution space by eliminating the infinity of local optimizations. It no longer matters what one group or another wants from Internet governance. No authority or means of coercion can force a Social Contract on humanity as a whole. Removing the possibility of coercion turns an adversarial process into a collaborative search for approaches benefiting all of humanity. Barlow recognized in 1996 an inflection point between scarcity and abundance making this ambition possible. Moore's Law and the nature of communication, information, and digital goods create an environment where world peace (abundance) is easier to sustain than war (scarcity).
Introducing the IP Transition Framework Commitment by Daniel Berninger
The stunning difference between the pace of telecommunications and information technology progress seems both odd and oddly ignored. Telephone calls offer nearly the same experience today as in 1913 and precisely the same experience as 1950. Voice quality remains a function of standards set at Bell Laboratories in the 1930's (before the invention of the transistor or arrival of modern computing). The subsequent billion fold expansion of processing and networking capacity won no improvement in telephone functionality. The progress of information processing during the same period transforms daily life, and, in particular, consumes the adjacent communication market as mere application of the Internet. Recent euphoria in the mobility realm reflects the benefits of mobile computing, not telecom. A telephone call via an iPhone 5 offers no communication benefits over the first generation of mobile phones in the 1980's.
The remarkably different outcome for these progeny of the transistor represents a nature versus nurture technology policy twin study. It provides a roadmap for reinventing telecommunications as information technology - all-IP telco. The importance of communication and inefficiency of multiple networks led countries to nationalize telephone companies at the beginning of the 20th century. AT&T President Theodore Vail held on to independence by making commitments to the public interest (known as the Kingsbury Commitment) sufficient to satisfy President Woodrow Wilson. AT&T subsequently made the key contribution to founding an information processing industry with the invention of the transistor in 1947. The awarding of the Nobel Prize to William Shockley and team coincides in 1956 with a Consent Decree excluding AT&T from the resulting information processing industry and pushing AT&T's transistor patent into the public domain.
The difficulty of maintaining a distinction between information and communication technology generated a steady stream of controversies ever since. AT&T initially sought to get any and all activities classified as telecommunications. The FCC responded with the Computer Inquiries in the 1960's, 1970's, and 1980's in which AT&T won increasing options to pursue non-regulated information services. This led AT&T to seek classification of any and all activities as information services. Judge Greene's Modified Final Judgment entirely restored AT&T's access to information technology revenues at the cost of divestiture, but it left the policy distinctions between communication and information technology intact. The embrace by AT&T and the rest of the telecom industry of all-IP networks reflects the 2004 FCC FWD ruling preserving the distinction even where information technology provides communication functionality.
The embrace and success of the non-regulation of information technology ironically makes the distinctions unsustainable. A policy discriminating between telecommunications and information services does not work if the former loses all of its customers. The failure to improve voice quality over a period of decades became a problem as soon as the Internet created alternative modes of communication. The developments represent good news from the perspective of the communicating public and there exists at least an order of magnitude more day to day communication today than before the arrival of the public Internet. Porous borders nonetheless always prove problematic for questions of governance. Uncertainty prevails absent a clear delineation of jurisdiction.
The questions of implementation do not diminish interest in long standing communication policy objectives. The fact of communication as a key input to economic and social activity of a country creates the same public interest imperatives today as those driving nationalization of telephone companies in 1913. There remains justifications and interest in policy around network interconnection, disability access, universal service, network reliability, and legal intercept. Competition policy addresses the same questions today as in 1956 when the Department of Justice stripped AT&T of exclusive rights to the transistor. The same public willing suffer monopoly over toasters will pick up their pitchforks against companies seeking gatekeeper status in communication. Communication will continue to attract more policy attention than any other technology including information processing.
Ignoring the special status of communication seems unlikely to work any better for industry than attempts by policy makers to ignore changes in technology. There exists a need for a new Kingsbury like commitment in order to preserve the benefits of non-regulation in spite of turning communication into an information technology. Members of VCXC follow the tenets of the IP Transition Framework Commitment which includes Do No Harm, recognition of the public interest in communication networks, and commitments to maintain parity with information technology around services, devices, and networks. Individuals can add their endorsement of the IP-TFC here and the plan includes recruiting a public advocate to serve an ombudsman type function verifying compliance with the commitments.
The changing nature of incentives in the context of all-IP networks turns compliance with the IP-TFC principles into a matter of survival. Network effects make federation an imperative for communication networks as no company serves of more than a tiny fraction of the world's population. The nature of the resulting network interconnections place an upper limit on the value proposition offered end users (and value of networks). This represents the key to understanding why voice quality has so far remained immune to technology progress. Federation externalizes the vast majority of value and makes market forces impotent with regard to voice quality. AT&T remains the worlds largest telecom company by revenue, but AT&T's network improvements do nothing for 97% of the end points reachable by AT&T's customers. This represents the same challenge Intel suffers in selling each generation of ever more powerful processor. Realizing the benefits of an increase in processing capacity remains out of Intel's direct control.
Gordon Moore's expectation for the doubling of the density of transistors every 18 month drives the entire information processing sector through the modularity of processor, memory, storage, and various other computing functions. The same opportunity exists in the context of communication. Existing interconnection arrangements owe to extensive compulsory rules, numbering standards, and government enforcement. The regime gets credit for preserving the PSTN as a cohesive whole even as the number of cell phones expands beyond six billion. The cost in terms of static voice quality nonetheless represents the root cause of declining service revenue. The proliferation of Internet communication options cut the demand for mediocre quality voice calls in half. It allows 40% of customers to rely on relatively less reliable wireless only voice options.
Keep in mind the cost of deploying communication networks depends only to a small degree on the eventual service offer. Trenching, right-of-way, and labor intensive elements of deploying outside plant (and , for example, the cost of acquiring spectrum) exist independent of whether serving $20 per month voice service or $50 per month 10 megabit Internet access or both. Moore's Law driven inside plant determines the capacity and functionality of networks. The question of whether Internet access justifies new network investment does not arise to the extent flexible IP network interconnects create the opportunity for new services like HD voice. Expanding the functionality of network interconnection expands the range of potential value propositions offered end users. The existence of the Internet breaks the 20th century logic around resisting interconnection. Flexible IP service interworking removes the cap on the value of communication networks and represents the key to the type of sustainable growth investors assign enterprise value premiums.
Transition global telecom industry to all-IP networks and upgrade the universal core voice service to HD voice by June 15, 2018.