The FCC Sees the Future — and It’s VoIP

The Federal Communications Commission is prepping for a future without the circuit-switched network that currently handles most of the landline and wireless calls in this country, and late yesterday released a public notice seeking comments on how to lay the regulatory groundwork for an all-IP communications network. The notice likens the transition to that of moving from analog cell phone service to digital or from analog TV to digital, but it has the potential to be much more disruptive.

That disruption will come from three factors, and the most obvious one will be familiar to us since we just went through the digital TV transition — how do we make sure everyone has access to an IP network as the old circuit-switched network fades away? Cutting off someone’s copper landline isn’t going to fly in many homes. Although the FCC is not proposing any sort of cut-off date, the writing is on the wall for the fate of copper landlines, and laggards will have to be transitioned off those lines as the costs of maintaining the circuit-switched network become too much for carriers to bear.

The transition to an all-IP network also will require a change in the way the FCC collects data and the government disperses communications funds. This a key reason why Universal Service Fund (USF) reform is so crucial, since it could help allocate money from the $7 billion-a-year program across all forms of broadband access. FCC Chairman Julius Genachowski hit on this in a speech he gave yesterday saying:

I won’t test this audience’s patience with detail on the USF. The key points for today are these: USF is a multibillion-dollar annual fund that continues to support yesterday’s communications infrastructure. The goal of universality is as important as ever — and to meet our country’s innovation goals, we need to reorient the fund to support broadband communications. This is a thorny issue, with no shortage of practical and statutory challenges.

However, the FCC is also seeking a role in the change that will come from the ability to integrate voice, video and data in unique ways on an all-IP network, the disruption that matters most to entrepreneurs and end users. Just look at what BT is attempting to do or services like Google Voice (s goog). This is where FCC efforts in traffic pumping and net neutrality come so strongly into play. In the circuit-switched network, telecommunications firms have certain rules they must follow about terminating calls and emergency access, regulations that VoIP providers don’t always have.

Right now, VoIP is voice, but once voice is mixed with data it becomes what Google calls an Internet application (its defense for blocking certain Google Voice calls to rural areas earlier this year). Since an all-IP network has the potential to turn all of our voice calls into Internet applications, the FCC has to figure out how to handle that traffic in a way that preserves everyone’s right to connect with the people they want to communicate with, and ensure that citizens can turn to the broadband network for help in an emergency.

Comments are due to the FCC by Dec. 21, but as the nation prepares to deliver a National Broadband plan in 77 days, it’s worth keeping this larger picture of our future in mind. It’s gonna be awesome.