Sunday, July 10, 2011
Comments on Network Reliability & Resiliency: No Need for Regulatory Intervention
Back in April I flagged the FCC NOI on Network Reliability and Resiliency in part because it seemed interesting, and in part because it made for a good debate over how far the FCC should push regulation in arenas that are, in my opinion, best served by market forces and innovation. This issue is also especially timely following the devastating tornadoes and flooding in the Midwest this summer. Anyway, in my post about the NOI back in April, I commented that although network reliability and resiliency are of the utmost importance, the FCC should not be imposing intrusive regulations in this area—the market should determine the best technologies and solutions, and companies should have the flexibility to adopt technologies and solutions that fit their specific needs and budgets. Furthermore, I don't trust regulatory lag to keep pace with new challenges that arise by way of natural and man-made disasters that threaten networks. I also don't see a specific problem that requires regulatory intervention—telecom service providers know that network reliability and resiliency is important, and there is definitely no lack of technology or innovation that would indicate a need for regulatory intervention. Those are my thoughts, but let's see what the industry has to say about it.
The following comments are in response to the FCC's April 7 Notice of Inquiry on Network Reliability and Resiliency: PS DN 11-60, PS DN 10-92 and EB DN 06-119.
Comments of the Telecommunications Industry Association (TIA)
TIA's comments were very in sync with my own opinions on this issue—TIA supports the goal of ensuring that networks are reliable and resilient ("R&R"), but they do not agree that regulation is necessary to achieve this goal. TIA recognizes that there are an unlimited number of potential threats to network R&R, and "no network, no matter the planning or regulation, can be designed and implemented to withstand every possible source of failure" (pg. 4). As new challenges arise, networks and technology evolves to meet these challenges, and unfortunately innovation is sometimes reactionary when something bad happens—however, this prevents network operators from getting complacent with certain technologies and solutions, so they continually strive to improve based on new challenges. TIA notes that the ongoing transition to an all-IP communications networks will help address some R&R challenges because single points of failure "will increasingly become a problem of the past" (pg. 5). TIA also understands that R&R challenges are different for every single network operator, and "these operators routinely make hyper-local decisions on how to address resiliency challenges based on direct knowledge of unique threats and priorities guided by already existing industry standards and best practices" (pg. 5-6).
TIA does not believe that the FCC should take regulatory action on network R&R, rather the FCC should just encourage voluntary, consensus-based solutions and best practices, in a very technology-neutral way, and the FCC should publicly praise network operators who go above and beyond on network R&R. TIA argues that market incentives have worked thus far, and "each operator has been able to make the most responsible decision to address [R&R concerns] in the most efficient manner" (pg. 7). TIA warns that regulatory intervention could derail infrastructure improvements that are currently underway, including improvements funded by BTOP, BIP and TLIP; furthermore, there could be a negative impact on smart grid deployment, and in general it is not right to force capital investments where they may not be necessary or appropriate. TIA also argues that it is too difficult to impose minimum standards for everyone, "as requirements vary from node to node" (pg. 10). I basically agree with all of TIA's recommendations, I think they hit it right-on: the FCC should not intervene in a market that has no failure, and the FCC should not impose sweeping requirements where there is so much differentiation from network to network.
Comments of the Edison Electric Institute (EEI)
EEI took a very different approach to the R&R NOI than TIA, and I felt that EEI's comments were very interesting even if they didn't echo my exact opinions. Basically, EEI thinks that commercial communications networks are not good enough for utilities, and therefore the FCC should take steps to adopt R&R standards so that commercial networks are more capable of supporting utility communications—but, the FCC should not take any actions that would make it a challenge for utilities to rely on private networks. I learned a great deal about utility communications architecture in my Smart Grid class last semester, and yes, these networks are quite different than the commercial telecom architectures. Utilities love redundancy and their networks are not always what we in the telecom industry consider "modern." Utilities like networks that have no extra bells and whistles, and networks that have extremely high reliability, obviously. I believe that part of the reason why the utility-telecom smart grid synergies (which I have written about here, here, and here) are slow-moving is because utilities do not trust commercial telecom networks. So, it is not really surprising that EEI is calling for the FCC to step in and push commercial networks to a higher level of R&R—if this were to happen, it is possible that more utility providers would utilize commercial networks for smart grid operations. Although I am all for utility-telecom collaboration, I'm still not convinced that regulatory intervention is necessary.
EEI points out the problems with commercial networks: "In particular, carriers do not provide sufficient network capacity during emergencies, and lack network priority routing necessary to support critical applications. Further, carriers do not provide levels of service restoration or variable latency needed by electric utilities, and current networks lack adequate back-up power and redundancy. These problems are of great consequence to electric utilities from the end-use perspective" (pg. 2). EEI also adds that utilities have unique public safety needs, "which often requires electric utilities to design their communications networks to different standards and practices than commercial networks" (pg. 2). Electric utilities need specific levels of R&R for "maintenance, remote control and monitoring, dispatch of field crews in service territories, and communications with customer meters;" as well as a multitude of internal communications categories (pg. 4). The network must have sufficient capacity and coverage under any dire situation, and comply with NERC and FERC standards. Basically, EEI just doesn't think commercial networks are good enough—they are too susceptible to backup power failure, have insufficient backhaul redundancy, have frequent failures during emergencies, and are often very slow in service restoration. EEI argues that "commercial networks are not designed to provide levels of reliability, survivability and coverage necessary to meet all utility communications needs, particularly in times of emergency" (pg. 5). I don't really disagree with any of EEI's claims based on my knowledge of utility networks and commercial networks, but I think that any commercial telecom network who wants to collaborate with a utility provider will make the investments necessary to bring the network up to utility standards without the need for regulatory intervention. Not all commercial network operators want to be utility network operators, and those who do are free to modify their networks utilizing existing and future technologies and solutions. EEI's comments are definitely worth reading if you are interested in utility network requirements, especially if you are a rural telecom provider who is looking at collaborating with a utility on smart grid deployment—you will want to know what the utility provider needs and expects in terms of network R&R, and then determine whether or not your company can meet these requirements.
Comments of the United States Telecom Association (USTelecom)
USTelecom also disapproves of regulatory intervention for network R&R. They argue, "USTelecom member companies have voluntarily spent hundreds of millions of dollars and countless hours preparing for disaster recovery in order to support continued quality service to their customers, even during emergencies" (pg. 1). USTelecom believes that the efforts of their members illustrate that regulatory intervention is not necessary, and they argue that their members have made significant progress in recent years to increase network R&R. USTelecom cites examples of very few network overloads, better traffic management, and the emergence and adoption of remote access capabilities as evidence that telecom providers are taking network R&R seriously, despite the high costs involved. Rather than regulatory intervention, USTelecom argues in favor of Public-Private Partnerships (PPPs), where the FCC would have an important role in facilitating industry-government collaboration. USTelecom argues that PPPs have a good track record of success and are better suited to this particular challenge than all-out regulation. They argue, "A regulatory approach to network survivability would likely inhibit the ability of companies to respond quickly to new types of threats, and reduce the effectiveness of public-private partnerships already under way" (pg. 6). USTelecom noted that its members widely adopt industry best practices, and "member companies implemented remarkably successful procedures, technologies and precautions to support survivability—without regulatory requirements that they do so" (pg. 8).
Basically, I agree with pretty much everything USTelecom said—I definitely agree that there is no one-size-fits-all solution for network R&R standards, and if voluntary adoption is successful, why fix what's not broken?... But, this IS the FCC we are talking about, and they definitely have a tendency to try to fix things that aren't broken—this should be their motto: "FCC: Fixing What Isn't Broken Since 1934."
I thought these three stakeholders provided a nice range of viewpoints covering network technology vendors/manufacturers, the utility industry, and telecom providers. I would like to say that I don't think regulatory intervention is likely on this issue, but I don't think the idea will be "off the table" either. I don't expect much to happen with this NOI any time soon, however. There weren't a whole lot of comments filed and there is definitely no clearly demonstrated, impending and severe industry or market failure at hand. I agree that the utility industry needs better R&R from commercial networks if the two industries are to collaborate on the smart grid, but I definitely don't think regulatory intervention is the right way to achieve these goals.