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Network Resilience and its Regulatory Inhibitors

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Introduction/OverviewDefinition of network resilienceFactors Affecting Network ResilienceStandardsRegulatory opportunities and impedimentsGovernmentRegulatory/Policy Barriers to Network ResilienceLocal Exchange CompetitionElectromagnetic SpectrumSpectrum AuctionsService and Equipment ProvidersWirelessConclusionNetwork Resilience and its Regulatory Inhibitors Draft James Alleman and Jonathan Liebenau University of Colorado and Columbia University London School of Economics and Columbia University INTRODUCTION/OVERVIEW With the events of 9/11, the concern for network resilience has been foremost on the agenda of the country. The desperate, but often unsuccessful, attempts of people to communicate immediately after the attack of the World Trade Center are the most poignant reminder of the need for communications. While the telecommunications companies responded heroically, and service was restored quickly [Elby-Verizon; AT&T1; NYT Sept 01], many firms in the Wall Street area and beyond found that the redundancy they thought they had did not exist. These firms did not understand that some of the complex rules developed by the Federal Communications Commission (FCC) and mandated by Congress rendered the networks less resilient than they could have been. However, the current economic weakness of the telecommunications industry is the dominant factor inhibiting investment in network resilience. This weakness has roots in the disillusion of financiers following the “dot.com bubble”, the mismanagement of some leading companies, and the detrimental effects of severe competition during a period of high spending for acquisitions, licenses and market share. Many blame the Telecommunications Act of 1996 for some of this weakening; others focus on poor strategic choices and mismanagement in the face of high costs and price-cutting among competitors. Here we will consider the environment around the telecommunications industry to show what 1 S. Elby, “Network Design and Resilience” Presentation to Columbia University course ELEN 6901, October 30, 2002; PJ Aduskevicz, “AT&T Response, terrorist attack, September 11, 2001” presentation to NRIC V, October 30, 2001forces and to what extent the network suffers from delay or distortion to the goal of increased resilience. New opportunities will arise with new thinking about the use of spectrum and the efficient application of new technologies, especially those associated with new wireless communication devices and architectures. New theories on how to charge for spectrum and how new technologies will allow for spectrum sharing could generate a new economics of wireless communication that will provide the incentives for investment in resiliency. Effective interoperability and interconnection is at least as much a fraught business problem, with policy implications, as it is a technical problem. The current systems of interconnection are also difficult to monitor, to the point where lines are now commonly shared, or conduits are used in common, even where higher levels of independence are expected. How would the disclosure of routing paths affect judgments about reliability and resilience, and what are appropriate rules for interconnection and co-location? The purpose of this paper is to explore the rules, regulation, and company actions which impede network resilience. We will only be concerned with technical issues insofar as they have impact on the economic and regulatory themes. Initially we address the definition of network resilience and consider the economics and policy areas which affect network resilience. We then explore the ways in which regulation and commercial service and equipment providers create impediments to network resiliency. We conclude with an outline of recommendations to enhance the economic/business aspect of network resilience. Definition of network resilience Before proceeding with the discussion, we need to define what we mean by network resilience. The engineering concept is straightforward: it combines theconcept of the “robustness” of a system with the ability to reconstitute itself or to be easily repaired. But what would determine the economic/policy definition of resilience? We adapt the working notion that network resilience lowers the probability that an event will occur that destroys or disables part of a network such that it cannot be reconstituted – a self-healing network. An example of a resilient network would be a long distance network that when a major transmission link was cut, was capable of rerouting calls such that the calls were not unaffected. Similarly, in a metropolitan network, a SONET ring can provide resilience such that when a cut occurs service can be restored by rerouting around the ring within the accepted 50 millisecond period that allows for transparent voice communication handover. Improvements in network resilience could include incentives to invest in order to make a more robust innovative system or to have more redundancy built into the existing system. It might include the technical ability to make use of alternatives by switching from one form of the network to another (as in transferring calls from the PSTN to the internet through voice over IP). Or, it might be the capability built into systems such that functions can be switched between standard and non-standard usages. Factors Affecting Network Resilience Economic and policy factors, in addition to technical ones, have long influenced the engineering character of networks and will increasingly affect their resiliency. These fall into three main interacting categories: standards, regulation, and government practices and policies. Standards Standards lie at the heart of network resilience in three ways. Firstly, there is the accepted definition of what constitutes resilience and the tolerance allowable for networks. Currently for voice networks a restoration time of 50 milliseconds is regarded as necessary to ensure transparent handover, and that standard can be met by SONET rings but not by many other standard architectures. The tolerance for handover of data streams can be lower, and a slight lowering of thestandard could even now open up a variety of new technologies for consideration as resilient network components. This might especially affect voice over the internet [VOIP] and some of the wireless technologies, including potential networks composed of wireless local


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