Prepare to Share - Government Activity

Telecommunications, Nov, 2000 by Rob Cain

Years ago, it was parents and teachers who urged us to share. Today its the FCC.

Sharing the local loop is a little more complicated than sharing cookies or toys. The purpose of the FCC's line sharing rule is to increase competition in the broadband services market by requiring loop owners--ILECs--to make their facilities available to other carriers--CLECs and DLECs (data LEGs). The ruling is quite specific: It goes beyond simply allowing voice and data to share a line, to actually allowing multiple providers of the same services to share facilities. But it doesn't say exactly how services are to be delivered over shared facilities.

A lot of the details have been left to the states, which, in turn, seem to be leaning on ILECs and CLECs to work out arrangements among themselves rather than having the guidelines enforced by the PUCs (public utility commissions). Currently, Minnesota is the only state that has actually issued rulings; others, notably New York, Texas and California, are expected this year. This was probably a good decision on the part of the FCC. It allows flexibility and room for experimentation, both important in changing markets. But it complicates matters for carriers, forcing them to negotiate management of the line sharing process. The good news is that it's a simpler choice than it may at first appear.

Most of the copper we use today was installed for one purpose: voice communications. Data has traditionally been converted, using modems, to analog format for transmission. But in today's datahungry world, all that has changed. DSL service turns copper pairs into modern digital facilities. Now, an increasing number of homes and offices are using ADSL (asymmetrical DSL) to transmit data over copper, faster, more economically and more accurately than ever before.

Of course, customers still need POTS. Fortunately, ADSL can accommodate both voice and data simultaneously, dividing the spectrum at 4 kHz to carry voice in the lower portion and data in the upper. Carriers have been quick to offer combined voice/data ADSL services at attractive prices, and carriers themselves benefit by getting double duty from a single copper pair. The services are combined at the customer premises, transmitted over the copper pair, and separated at the CO by a POTS splitter (see Figure 1).

From a technical standpoint, line sharing doesn't change a thing. Voice and data are still combined at the customer site, travel together over a copper pair and are separated at the CO. The voice signals are still directed by the POTS splitter to a switch, and the data segment is routed to a DSLAM (DSL access multiplexer). The biggest difference is that the switch and DSLAM can now have different owners. It is possible for a competing carrier to provide voice service, but, typically, voice is left to the ILEC.

Everything up to this point is clear. The ILEC owns the copper and everything up to and including the MDF (main distribution frame) at the CO; the CLEC or DLEC owns its DSLAM. But who is responsible between the MDF and the competing carrier's DSLAM? Who controls the splitter? Who owns it? The FCC ruling left these issues open.

Who Wants Control?

Given the choice, incumbent carriers would probably prefer to control the splitting process, if only out of habit. It allows them to maintain an unbroken chain of control on the voice side, all the way from the customer premises to the voice switch.

But what about the competing carrier? It may be tempting to extend control back from the DSLAM to the splitter, but is this wise? Whoever controls the splitter has the access needed to make moves and changes. To a CLEC, this may seem like an advantage. It would be nice to be able to make changes without waiting for the ILEC to respond. But what about the ILEC's moves and changes? If the CLEC controls the splitter, it is responsible for those changes as well as its own. Is that how a CLEC should use its resources? It's easier to let the ILEG control the splitter and rely on goodwill--and the PUC if necessary--to ensure speedy response.

Controlling the splitter means easy test access. This is useful for loop qualification, maintenance and troubleshooting and may look appealing to a CLEC. But again, control means responsibility for all signals passing through the splitter. And testing requires equipment, potentially a huge capital expenditure. In these days of slim margins and costly growth, CLECs must ask themselves if they want to invest their capital in testing equipment. The alternative is a cooperative relationship with the ILEC, usually not difficult to achieve.

Finally, there is the question of liability. Telephony is a lifeline service, and the supplier of services like 911 is responsible for life and death. The ILEC already bears that responsibility. When a new carrier takes control of a link in the telephony chain, it is taking on a share of the liability.

The bottom line is this: A CLEC assuming responsibility for the POTS splitter has little to gain and a lot to lose. Rather than assume the costs in time, money and potential liability, it is preferable to leave control to the ILEC and simply maintain a cooperative relationship. This leaves the CLEC free to focus on marketing and providing service to customers.