SHARE



ABOUT THE AUTHOR


Eric Krapf
Eric Krapf is General Manager and Program Co-Chair for Enterprise Connect, the leading conference/exhibition and online events brand in the...
Read Full Bio >>
SHARE



Eric Krapf | January 05, 2010 |

 
   

AT&T's Call to Sunset the PSTN

AT&T's Call to Sunset the PSTN 2010 could be the year a phase-out starts; what are the issues for the enterprise?

2010 could be the year a phase-out starts; what are the issues for the enterprise?

In a major development over the year-end holidays, AT&T filed comments with the FCC in which the carrier explicitly calls for the phasing out of the legacy Public Switched Telephone Network (PSTN) and the accompanying POTS service. AT&T pressed the commission for a date-certain, and warned that the current situation is "exacting a substantial toll on ILEC revenues."AT&T filed the comments in the FCC's proceedings on extension of broadband service to all Americans. The carrier linked the goal of universal broadband with the plight of the PSTN (emphasis added):

Due to technological advances, changes in consumer preference, and market forces, the question is when, not if, POTS service and the PSTN over which it is provided will become obsolete. In the meantime, however, the high costs associated with the maintenance and operation of the legacy network are diverting valuable resources, both public and private, that could be used to expand broadband access and to improve the quality of broadband service. It is for that reason that one of the most important steps the Commission can take to facilitate an orderly transition to an all-broadband communications infrastructure is to eliminate the regulatory requirements that prolong the life of POTS and the PSTN. A smooth transition to an all-broadband world is essential to attaining the goal of universal broadband service.

According to AT&T, broadband is currently available to 90% of households, and 66% of households subscribe to broadband. The carrier cited a number of further data points and made detailed arguments to support what it considers the urgency of its need to begin the process of getting out from under its requirements to deliver POTS:

* "Over 99% of Americans live in areas with cellular phone service, and approximately 86% of Americans subscribe to a wireless service. Many of these individuals see no reason to purchase landline service as well. Indeed, the most recent data show that more than 22% of households have 'cut the cord' entirely," the company wrote. Furthermore, "At least 18 million households currently use a VoIP service,18 and it is estimated that by 2010, cable companies alone will be providing VoIP to more than 24 million customers; by 2011, there may be up to 45 million total VoIP subscribers."

"In view of the range of alternatives for voice service--many of which offer distinct advantages over traditional landline service--it is not surprising that the POTS business model is in a precipitous decline. The numbers speak for themselves. Today, less than 20% of Americans rely exclusively on POTS for voice service. Approximately 25% of households have abandoned POTS altogether, and another 700,000 lines are being cut every month [their emphasis]."

* "Total interstate and intrastate switched access minutes have fallen by a staggering 42% from 2000 through 2008. Indeed, perhaps the clearest sign of the transformation away from POTS and towards a broadband future is that there are probably now more broadband connections than telephone lines in the United States.

"These trends are exacting a substantial toll on ILEC revenue from POTS service, which fell from $178.6 billion in 2000 to $130.8 billion in 2007, a 27% decrease." At the same time, "the average per-line cost of maintaining the legacy network has risen from $43 per year in 2003 to $52 per year today."

* This lost revenue, AT&T argues, only hampers the ILECs' ability to fund the cost of upgrading the public network for broadband. "Commission staff has estimated that it will take an investment of approximately $350 billion to make available 100 mbps broadband service to all American consumers.

"By one estimate, in 2008, traditional ILECs spent in the aggregate approximately $28 billion on capital expenditures, with over fifty percent of this sum (52.2%) going to the legacy network."

AT&T notes that this kind of dynamic can be dealt with in unregulated industries, where companies are free to stop producing products for which demand is declining, and shift the investment to the new, more desired products: "No one prevented horse-drawn carriage manufacturers from switching to automobiles the moment it became clear that the antecedent technology was obsolete. But many network operators do not have this luxury."

* AT&T uses the precedents of the analog-to-digital transitions in cellular networks and TV broadcast, to make the case that the FCC can and should set a date-certain for the transitioning away from the PSTN.

* The fate of universal service: "Customers who rely on universal service today should not be left behind as the nation moves to broadband and IP-based services. But the nation is moving, and the Commission must therefore act to ensure that universal service remains relevant and achievable," AT&T writes. However, AT&T insists that new funding mechanisms and service delivery models must be instituted for Universal Service.

The filing doesn't propose specific answers to most of the issues raised by AT&T; rather, the carrier calls on the FCC to issue a Notice of Proposed Rulemaking, to which AT&T would presumably respond with its specific proposals.

For the enterprise, there are of course many unanswered questions. AT&T doesn't specifically lay out what it means by "retiring" the PSTN. Would it decommission all its Class 5 switches on the date-certain? If so, what would be the implications for enterprises that still do use services based off of this infrastructure? A date-certain would obviously give the carriers plenty of leverage in negotiating with customers who need to migrate from these legacy services to next-gen infrastructure.

On the other hand, is AT&T only talking about a date-certain to transition the regulations that require them to deliver POTS/PSTN services? Could they choose to retain Class 5 switches beyond the date-certain in selected geographies where the combination of infrastructure amortization and residual POTS subscribership made such a retention economically attractive to the carrier?

That's just scratching the surface. As this process plays out, we'll see lots more. But it looks like 2010 could be the year we at least start talking about the end of the PSTN in a realistic way.2010 could be the year a phase-out starts; what are the issues for the enterprise?





COMMENTS



August 16, 2017

Contact centers have long been at the leading edge of innovation in communications technology, given their promise of measurable ROI and the continual need to optimize customer interactions and sta

July 12, 2017

Enterprises have been migrating Unified Communications & Collaboration applications to datacenters - private clouds - for the past few years. With this move comes the opportunity to leverage da

May 31, 2017

In the days of old, people in suits used to meet at a boardroom table to update each other on their work. Including a remote colleague meant setting a conference phone on the table for in-person pa

August 16, 2017
World Vision U.S. is finding lots of goodness in RingCentral's cloud communications service, but as Randy Boyd, infrastructure architect at the global humanitarian nonprofit, tells us, he and his team....
August 11, 2017
Alicia Gee, director of unified communications at Sutter Physician Services, oversees the technical team supporting a 1,000-agent contact center running on Genesys PureConnect. She catches us up on th....
August 4, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, has lately been working on integrating enterprise communications into Internet of Things ecosystems. He shares examples and off....
July 27, 2017
Industry watcher Elka Popova, a Frost & Sullivan program director, shares her perspective on this acquisition, discussing Mitel's market positioning, why the move makes sense, and more.
July 14, 2017
Lantre Barr, founder and CEO of Blacc Spot Media, urges any enterprise that's been on the fence about integrating real-time communications into business workflows to jump off and get started. Tune and....
June 28, 2017
Communications expert Tsahi Levent-Levi, author of the popular BlogGeek.me blog, keeps a running tally and comprehensive overview of communications platform-as-a-service offerings in his "Choosing a W....
June 9, 2017
If you think telecom expense management applies to nothing more than business phone lines, think again. Hyoun Park, founder and principal investigator with technology advisory Amalgam Insights, tells ....
June 2, 2017
Enterprises strategizing on mobility today, including for internal collaboration, don't have the luxury of learning as they go. Tony Rizzo, enterprise mobility specialist with Blue Hill Research, expl....
May 24, 2017
Mark Winther, head of IDC's global telecom consulting practice, gives us his take on how CPaaS providers evolve beyond the basic building blocks and address maturing enterprise needs.
May 18, 2017
Diane Myers, senior research director at IHS Markit, walks us through her 2017 UC-as-a-service report... and shares what might be to come in 2018.
April 28, 2017
Change isn't easy, but it is necessary. Tune in for advice and perspective from Zeus Kerravala, co-author of a "Digital Transformation for Dummies" special edition.
April 20, 2017
Robin Gareiss, president of Nemertes Research, shares insight gleaned from the firm's 12th annual UCC Total Cost of Operations study.
March 23, 2017
Tim Banting, of Current Analysis, gives us a peek into what the next three years will bring in advance of his Enterprise Connect session exploring the question: Will there be a new model for enterpris....
March 15, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, discusses the evolving role of the all-important session border controller.
March 9, 2017
Organizer Alan Quayle gives us the lowdown on programmable communications and all you need to know about participating in this pre-Enterprise Connect hackathon.
March 3, 2017
From protecting against new vulnerabilities to keeping security assessments up to date, security consultant Mark Collier shares tips on how best to protect your UC systems.
February 24, 2017
UC analyst Blair Pleasant sorts through the myriad cloud architectural models underlying UCaaS and CCaaS offerings, and explains why knowing the differences matter.
February 17, 2017
From the most basics of basics to the hidden gotchas, UC consultant Melissa Swartz helps demystify the complex world of SIP trunking.
February 7, 2017
UC&C consultant Kevin Kieller, a partner at enableUC, shares pointers for making the right architectural choices for your Skype for Business deployment.
February 1, 2017
Elka Popova, a Frost & Sullivan program director, shares a status report on the UCaaS market today and offers her perspective on what large enterprises need before committing to UC in the cloud.
January 26, 2017
Andrew Davis, co-founder of Wainhouse Research and chair of the Video track at Enterprise Connect 2017, sorts through the myriad cloud video service options and shares how to tell if your choice is en....
January 23, 2017
Sheila McGee-Smith, Contact Center/Customer Experience track chair for Enterprise Connect 2017, tells us what we need to know about the role cloud software is playing in contact centers today.