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POTS Prices Are Increasing: Here’s How You Can Respond
With regulatory changes to plain old telephone service (POTS) prices now in effect, many enterprises still relying on copper-based telephony services are in a vulnerable situation — one which can cost them thousands of dollars or more per month in unused or underutilized technologies.
To recap the regulatory changes, on August 2, 2022, the FCC removed the requirement for incumbent local exchange carriers (ILECs) to provide analog POTS at competitive rates or to provide retail services at wholesale prices to competitive local exchange carriers (CLECs). Then, on October 27, 2023, ILECs are released from the remaining cost requirements.
These orders have allowed carriers to plan the decommissioning of outdated lines, with many looking to end all PSTN lines by 2030. Verizon transitioned much of its customer base away from POTS earlier this year, while AT&T announced it would decommission 50% of its copper network by 2025. While many organizations have transitioned these lines off analog, a few have held out too long and now face substantial cost increases. Some enterprises have already seen rates on a single line increase to over $1,000, and several reported new lines costing as high as $1,300 per line.
When speaking with some companies, they have underestimated the impact of these orders and have been faced with tens of thousands in increased costs for only a handful of lines. Organizations looking to avoid (or mitigate) cost increases in this area should execute a detailed review of their inventory to uncover POTS lines. In large telecom environments, some inventory items are not flagged accurately, which can lead to lines being missed. A company may still be paying for POTS lines that are not in use but are still registered as active.
Organizations that still have these lines in their inventory have a few options. The first is to terminate unused lines. Secondly, you can consider switching providers or negotiating an extension or reduction of POTS line pricing with your current vendor. The goal of this exercise is not to remain on POTS but to avoid the incredible spike in cost. Unfortunately, due to how late we are in this transition process, the carrier side of the table for these conversations often has more leverage. For a bit of leverage, you can include the prices of two or three competitors that allow for a reduction in cost in this scenario, which can cover some technology upgrade costs down the road. Some carriers I've encountered have robust transition programs and can port lines over in minimal time. Once the excessive increase is avoided, you can focus on the next step in the process.
The next way to reduce costs is to upgrade the service by transitioning to digital options. There are a few considerations for this category, line use being the key focus. If you choose to transition to a new provider, they can often include the transition to digital services in their proposals, so you can fully account for the ROI of the project.
If lines are being used for voice, a transition to a VoIP platform can reduce your costs immensely. Many options are available, and transitioning to a data circuit and migrating the lines can offer a host of benefits in addition to cost reduction. If these lines are health and safety related (elevator, alarm, gates, security, etc.), evaluate the ePOTS solutions that are on the market. Your current vendor may have an option that they are willing to supply, but I'd recommend shopping for two or three quotes before committing. While transitioning to an ePOTS solution will require an onsite install, the cost reduction can be considerable and allows for some redundancy on the lines. In the event of a power outage or a circuit failure, cellular backups and battery packs can ensure operability.
With the technology available in the market today, a transition away from analog lines can mean significant cost reduction. Carriers understand the need to reduce costs in the current climate and have shown a willingness to work with organizations making long-term transitions to new technology. In the end, the sunsetting of analog lines doesn't have to be a painful experience.
Editor's note: This article was originally published on August 3, 2022 (click here for the original article) and re-published as a part of our end-of-the-year review.