Should the carriers be able to kill the landline? The carriers think so, and so do the states of Florida, North Carolina, Texas and Wisconsin. Ohio, Indiana, Alabama, Georgia, Mississippi, and California also are considering removing the requirements to supply landline services. The carrier argument goes, "Landlines are declining in use, with up to 1/3 of the homes turning them off in favor of cellular and/or Internet access."
The decline of landline use is real. Keeping the landline operation going is not cheap. Should the carriers be allowed to drop their landlines?
Their argument is that wireless is taking over. I think the shift to wireless from landlines is a profit grab by the carriers since they do not have the same restrictions on wireless as they have on landlines. Wireless is more profitable. The wireless carriers keep changing the terms and conditions of service to their profitable benefit: Consider the data caps. The carriers do not have this freedom with landline service.
The Washington Post article of April 12, 2012, "Landline rules frustrate telecoms" has some interesting comments about the carriers' future approach to the landline business. The pace of the drop in landline use does not seem to be nearly as fast as it once was. There is a chart in the Post article that bears this out. Wireless revenue grew from $101 million in 1980 to $94.5 billion in 2009. Landline revenue also grew rapidly from $27.6 billion in 1980 to $94.5 billion in 2001. The landline revenue dropped rapidly until about 2005. Since that time, contrary to the carriers' argument, the landline revenue appears to be flat, stabilizing at about $76.6 billion.
I have Verizon FiOS service for Internet and my two business lines. I have a cell phone, and my home phone service is on a landline. My landline works when FiOS is down. My FiOS has an 8-hour battery for phone service. I don't need that for my landline phone. Not everyone has these choices.
I learned of the landline problems when I had DSL. When it failed because of the copper loop, it took a while for another copper pair was assigned for DSL service. The installer told me that Verizon would not be installing new copper pairs because of the reduction in landline use. However, many in my neighborhood are on cable or FiOS so that the number of spare copper pairs has actually risen, so there is no real requirement for the telco to add new copper pairs.
When you look at the Verizon or AT&T maps of wireless coverage, you see a lot of empty space, especially in the Rocky Mountain region. It is also unlikely that these regions will get wireless or Internet access unless the carriers are forced to install services in these areas. These carriers' actions raises the question of who will be the Carrier of Last Resort.
What is a Carrier of Last Resort (COLR)?
Historically, the US has committed to ensure that all citizens have access to a local wireline telephone exchange for POTS. States have helped achieve this commitment by enacting COLR policies. The policies can be enacted by state legislatures and/or state commissions. The COLR policies impose a financial burden on the Local Exchange Carriers (LEC). The result of these COLR policies is the delivery of a network that provides nearly all residents the opportunity to subscribe a reliable and high-quality wired voice service without any discriminatory terms.
A COLR is any Telecommunications carrier that has to provide service to any party that has the ability to pay a reasonable price. The term is codified in the federal Telecommunications Act of 1996, 47 U.S.C. 214 (e). A paper published by the National Regulatory Research Institute (NRRI), "Carriers of Last Resort, Updating a Traditional Doctrine" argues for the continuation of COLR policies.
COLRs do not necessarily make a profit when providing telephone network access. This traditionally was offset by allowing a monopoly franchise within the state. The state commission set the rates so that a reasonable return on investment was achieved for the COLR. The states also have the jurisdiction to allow or prevent a COLR from abandoning the franchise or selling the network investment to another carrier. The federal policies, from the 1996 Act, authorized the FCC to pay universal service support to multiple carriers including non-COLRs.
The dropping of landline support also affects lifeline connections. See "FCC Promotes Broadband Lifeline".
The open question is then "What will be provided to those who cannot afford wireless or Internet services or who live in areas that are not served by wireless or Internet services?" Without COLR for wireless and/or Internet access, where is the incentive for the carriers to extend these services at a low price?
