Text Version



CHAIRMAN REED E. HUNDT
FEDERAL COMMUNICATIONS COMMISSION

INTERNATIONAL ENGINEERING CONSORTIUM
NETWORK RELIABILITY AND INTEROPERABILITY COMFORUM
RESTON, VIRGINIA

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 doesn't work.

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 the Council.

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 him.

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 likely.

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 kudzu.

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?

Scenarios

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 that task?

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 NRIC?

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 affordable.

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 wireless industry.

New technologies. 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 foreign companies.

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 information infrastructure? Next steps 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.

Conclusions 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.