CHAIRMAN REED E. HUNDT
FEDERAL COMMUNICATIONS COMMISSION
INTERNATIONAL ENGINEERING CONSORTIUM
NETWORK RELIABILITY AND INTEROPERABILITY COMFORUM
SEPTEMBER 16, 1997
(as prepared for delivery)
AVOIDING DIGITAL DISRUPTIONS
My thanks to Bob Janowiak and the other folks at the International
Engineering Consortium for again sponsoring this event -- and for inviting me to
be a part of it.
Making this country's telecommunications systems work is not an easy
job--and it is getting harder every day as new technologies are deployed, new
applications are developed, and new demands are put on the system.
It is particularly hard because when you succeed, few people notice. But
when something goes wrong, everyone notices--right away.
In network engineering, as in many fields, no good deed goes
unpunished. The more reliable and dependable you make the network, the more
people take it for granted--and the more upset they become when something
Thanks to the people in this room, that doesn't happen very often. We
have top-quality and affordable phone service in every corner of the country.
Thanks to you, we have one of the most reliable telecommunications systems in
the world. And soon, thanks to your efforts to ensure interoperability
throughout the network, we will be able to enjoy the benefits of competition and
choice in the local loop, just as we have in the long-distance market for more
than ten years.
I want to thank all of you who participated in the work of the Network
Reliability and Interoperability Council, in particular the Chairman of the
Council, Ivan Seidenberg, as well as Cas Skrzypczak, Jerry Peterson, John
Gunter and Bill Blatt, and also Jim Keegan, who serves at the FCC's liaison to
Just a few months ago, the President nominated Bill Kennard to be my
successor as Chairman of the FCC. I trust that the Congress will agree that
President could not have made a better choice and will act quickly to confirm
One of the first items on his agenda will be determining how the
Network Reliability Council can best help ensure that Americans can continue to
enjoy a highly-reliable telecommunications systems. There is no question that
there needs to be a group like the NRIC.
So the question is not whether there will be a fourth iteration of the
Network Reliability Council, the question is what will its mission be and how
can it best achieve it?
The first Network Reliability Council was formed as a response to a
series of major network outages in 1990 and 1991 that highlighted both how
dependent our economy is on the telecommunications system and showed how a
few incorrect lines of code or a few mistakes by a couple of employees could
knock out phone service to tens of millions of customers for most of a day.
Those "digital disruptions" were preventable and in the last six years the
telephone industry has taken a series of actions to make such events much less
The new report of the Network Reliability and Interoperability Council
recommends further actions to prevent outages in our telephone network system.
But today we have to think about much more than just the circuit-switched phone system. As the Internet, intranets, and other data networks
carry ever more of the nation's telecommunications traffic they are going to put
increased demands on the network backbones.
Packet-switched networks will soon carry most of the country's bits and
that will change the economics, the structure, and just about everything else
about the telecommunications industry. We are not quite sure how it will
happen or how long it will take, but all indications are that it will happen.
Packet-switched networks are fundamentally different from the circuit-switched networks. The architecture is different, the capabilities are different,
and, perhaps most importantly, the philosophies of the designers of these
networks are different.
All indications are that data networks are going to continue growing like
According to a survey earlier this month, there are now 51 million adults
on-line in the U.S., a 46 percent increase over last year. The survey also found
that 8.6 million of those people are making purchases on-line, generating a
consumer electronic commerce market this year of over five billion dollars. In
addition to that sum, Forrester Research has found that business-to-business
commercial transactions over the Internet will hit 8 billion dollars this year, and
projects a 327 billion dollar annual market in 2002. But electronic commerce
requires highly reliable networks; these billion-dollar markets will not
materialize without them.
Communications Week International reports that construction of new
network capacity aimed at Internet traffic is now outstripping that for voice
channels by a ratio of three to one. A Cisco representative stated that between
the U.S. and Japan, commercial data bandwidth was already double voice
telephony bandwidth at the end of 1996.
The studies we've gotten from the Bell companies suggest that 5-10% of
the minutes on the public switched telephone network today represent Internet
traffic. Pacific Telesis estimates that by the year 2001, Internet traffic will be
between 82% and 300% of residential voice traffic.
It is possible that, five years from now, the average family will spend as
much time on the Internet as they now spend watching television -- seven hours
per day. With WebTV, multiplayer game consoles, and consistently explosive
growth in Internet usage levels, this is a plausible possibility.
Accommodating this kind of growth will not be easy, especially given
the number of companies involved.
Maintaining reliability in the circuit-switched world is difficult, with
over 1,000 local phone companies and hundreds of long-distance carriers. But
that is nothing compared to the challenge of the Internet, where there are now
about 4,100 Internet service providers in the United States. There are more
than 30 national Internet backbones, and because the Internet is packet-switched,
any communication can potentially use any one of them.
How will these new networks affect the reliability of the existing public-switched network?
Today, I'd like to share with you three scenarios for "digital disruptions"
that could happen in the future. I'd like none to be true -- and I'd like you to
prove they won't happen.
Scenario 1. In less than four months, around Christmas time, Sega
plans to release a new game console that will enable multiplayer gaming over
the Internet. That means on the morning of December 26 we could see millions
of kids dialing into the Internet for hours on end. Is our phone network up to
Scenario 2. Bob Metcalfe, founder of 3Com, has been warning of an
Internet meltdown. What if his prediction comes true tomorrow, depriving tens
of millions of people of access to their e-mail and the Web? Is this important to
Scenario 3. On September 5, the President's Commission on Critical
Infrastructure Protection held a public meeting of its advisory council. During
the meeting, Commission members summarized the preliminary conclusions of
the working group on the Information and Communications Sector. Their most
important conclusion is that hackers, company insiders, "information warriors,"
and others possess the talent and the tools to seriously disrupt our nation's
telecommunications system. Should the NRIC worry about this matter?
A Brighter Vision
We can avoid these nightmare scenarios if we have the industry
cooperation and leadership that has typified the Network Reliability and
Interoperability Council. If we can ensure the reliability of data networks, the
Internet will continue to grow at an unprecedented rate, driving development of
a worldwide, packet switched network that will augment and perhaps eventually
replace the current circuit switched network.
If we do things right, this new highspeed, congestion-free, always-reliable, always-on, friction-free, packet switched, big bandwidth, data friendly
network will be universally available, competitively priced, and capable of
driving our economy to new heights. It will easily carry voice, instead of what
we have today, a voice network struggling to carry data.
If we do this right, we will be able to harness Moore's Law in order to
make digital communications cheaper and cheaper, just as the computing
industry has done to cut the cost of computing 50% every year and a half for the
last thirty years.
On the other hand, if we do this wrong, the nation's telecommunications
system will be as hard to use as some of the software on my PC and will crash
almost as often.
The Challenges Ahead
In order to avoid digital disruptions and serious outages on the new, data
networks now being deployed, industry, the FCC, and the next Network
Reliability Council will need to redouble efforts to address reliability issues. In
doing so, they will face a number of difficult challenges.
Competition. Competition is the first. A number of challenges will
arise as we begin to see real competition throughout the telecommunications
sector. Even as the LEC's lawyers go to court to try to delay the
implementation of the Telecommunications Act, competition is starting--much
slower than I'd like, and often just for urban business customers--but it is
starting. But it is inevitable, unavoidable, and essential--if we want to have a
world-class telecommunications infrastructure in the next century.
Of course, competition will mean even more companies will be involved
in running the network and that there will have to be even more industry
cooperation to ensure that the network functions as it should. Challenge number
one for the next iteration of the Council will be ensuring that the new entrants
are adequately represented on the Council and that as competition--real,
unfettered competition--becomes a reality, competing companies will continue to
cooperate effectively to ensure the entire network of networks is reliable and
Interconnection. A second, related challenge is interconnection, which
is a prerequisite for serious, facilities-based competition. For the past two
years, you have made a lot of progress in finding ways to ensure that the
interconnection requirements of last year's Telecommunications Act can be
effectively implemented without decreasing the reliability or the integrity of the
network. That work needs to continue. We have to field-test your
recommendations and revise and refine them accordingly.
The next council will have to continue to think about how to ensure
interoperability of different phone networks and, in addition, focus more on
interconnecting those phone networks to all the different data networks being
deployed, whether by the cable companies, the satellite companies, or the
The third challenge is new technologies. New
competitors mean new technologies and new approaches.
The ISPs, the cable industry, the wireless industry and the satellite
industry are linking into the same National Information Infrastructure.
However, they all have different approaches to networking and reliability.
Bridging the gaps--philosophical and technological--between these different
camps or at least enabling effective communication between them, will be a
critical task for the next iteration of the Council.
Deregulation. The fourth challenge will be regulation--or more
accurately--deregulation. The FCC is working to eliminate old, outdated
regulations. In the area of reliability, the challenge will be ensure that we don't
inadvertently make it harder for your companies to do what needs to be done to
make the network safe, secure, and reliable. We have to consider reliability in
every proceeding and order, every NOI and every NPRM, in order to avoid
unintended consequences. And we will need the help of the new Council in
spotting and correcting problems.
In the end, we want a deregulated, competitive marketplace with a
minimum of government involvement. But that means proceeding carefully
during the transition to that ideal end state.
Security. The fifth challenge for the next Council is security. In the
past, unintentional damage by construction crews with backhoes has been the
most common cause of network outages. The FCC and the Council intend to
work with Congress to pass one-call legislation that should reduce that problem,
although it will never disappear.
In the future, as the President's Commission on Critical Infrastructure
Protection made clear, we will have to worry much more about intentional
attacks on the network. Malicious hackers and information warriors can cause a
network outage just as fast as a backhoe, and to the consumer, an outage is an
outage. The next Council will have to determine how to work more closely
with the other groups, such as the National Security Telecommunications
Advisory Council and relevant offices at the Pentagon, which are trying to
tackle this difficult problem.
Globalization. The sixth challenge is globalization. Since the start of
the present council, at least one company represented on the Council has been
bought by a foreign company. Several others have joined in alliances with
Telecommunications companies are going global. That means reliability
issues are now global issues. Yet, the NRIC has focussed on our national
network. How can we start to address the inherently global nature of the
All six of these issues--competition, interconnection, new technologies,
deregulation, security, and globalization--are ones that the current Council has
identified and started to address. All six issues will become more pressing and
more difficult in the months ahead. To address them, the next NRIC must (1)
broaden its base and mobilize all the key industry players, (2) advise the FCC
when government actions hinder efforts to build in reliability, and (3) work
more closely with other groups working on reliability and security issues.
There are only four months before the charter of the current Council
expires. We have a lot of work to do between now and then. The new FCC
Commissioners will have to pick a new Chairman for the Council and new
members for the Council will have to be selected. New staff members will have
to identified, new focus areas agreed upon, and a new charter drafted. I invite
all of you to participate in that process. The NRIC has a useful Web site
(www.fcc.gov/oet/nric) and we do read our e-mail.
A better approach to government
The NRIC represents a new approach to government and governance.
Regulation is not the answer. Technology is moving too fast. The Internet has
been able to grow so quickly in part because the Internet industry is competitive
and unregulated. We should keep it that way.
Instead of trying to regulate reliability, we need to rely on the kind of
industry-government cooperation we have seen with the NRIC. The FCC
convenes the meetings and helps sets the general goals, but companies, working
together, figure out how best to achieve those goals.
Look at the new report from the Council. Only 10 percent of the
recommendations are directed to government. The bulk of the recommendations
are directed to industry -- recommendations from industry to industry. That is
self-governance at it's best.
That said, the FCC will continue to play an important role in the
Network Reliability Council. We ensure that all the relevant interests are
present around the table and that the public interest, as defined by our elected
representatives, is understood and addressed. We also ensure that antitrust laws
do not hinder the kind of cooperation between companies that's necessary for
effective network planning.
To effectively consider and implement your recommendations the FCC
needs more of the kind of talent here in this room, in all the bureaus of the
Commission. We have some good technical talent at the
FCC, but not enough.
We just do not have enough engineers and scientists who can help us lawyers
keep up with technological developments.
I hope you will help my successor find and recruit a few more. They
will have a chance to make a big difference at a critical time.
As all these systems--the telephone network, the Internet, cable systems,
wireless systems, and satellite systems--merge into one interconnected digital,
packet-switched network, we have to remember that a network of networks is
only as reliable as its weakest link. So, we need to ensure that reliability is built
into every part of the system. That not only means built into the hardware and
the software, that means built into the organizations that run them and, most
importantly for the FCC, built into the government policies that affect them.
We need a regulatory environment that encourages companies to make the extra
effort and build in reliability.
With your help and effective cooperation between government and
industry, we can build reliability into the new, high-speed, digital networks as
they are deployed. We must, for if we do not, the U.S. will fail to realize the
full benefits of the Digital Revolution that we began.
Thanks again for your dedication and effort.