The viability of POTS has been in decline for some time, as
increasing numbers of customers opt for other types of telephone systems.
Whether it’s fiber-optic, cable, cellular or some other mode, plain old copper
just isn’t cutting it anymore – unless you live in a rural area, of course, or
find yourself in the middle of a disaster like Hurricane Sandy, which sent many
victims in search of traditional pay phones after more sophisticated technology
That’s why the Telecommunications Act of 1934 specified that
telephone companies have a responsibility to maintain service to communities,
unless the Federal Communications Commission (FCC) says it’s OK to stop. That
places a burden on providers like AT&T and Verizon Communications to keep
POTS going despite increased maintenance requirements and ever-declining
profits from a shrinking group of potential customers.
AT&T took a step on Nov. 7 toward pushing POTS further
into oblivion, asking the FCC to begin discussions about discontinuing support
for POTS, replacing it with a 4G wireless network that will reach about 99
percent of the nation’s customers when combined with networks from other
carriers. The news was buried deep inside a press release about AT&T
"Project Velocity” initiative, in which 300 million U.S. customers will be
covered by 4G LTE by the end of 2014. This represents an increase of
approximately 50 million from the 250 million AT&T had promised by the end
According to an analysis in the Wall
Street Journal, the plan represents a compromise: AT&T will spend
billions of dollars extending its wireless network to sparsely populated areas
if the federal government will let it and other carriers off the hook from the
regulatory burdens of supporting good old POTS.
This creates a conflict between critics who maintain that
AT&T is abandoning its obligation to support POTS customers, and advocates
who say that it’s unreasonable to expect AT&T and Verizon to keep pouring
money into a network that is unsustainable in the long-term.
In an opinion piece on publicknowledge.org,
analyst Harold Feld applauds AT&T’s willingness to make the investment, but
notes a number of key issues, including:
- What happens to the 1 percent of customers who
still would not be covered by the expanded network, and who would be faced with
an eventual loss of POTS? This potentially represents thousands of consumers
who would lose access to basic telephone service.
- Reliability becomes a factor. As noted earlier,
there were multiple reports during Hurricane Sandy of victims whose wireless
phones or IP-based services weren’t working. They were left searching for the
nearest payphone, since POTS systems were largely unaffected by power outages.
Copper is built to 99.9999 percent reliability, Feld says, and wireless and
IP-based networks come nowhere near that standard.
Most parties seem to agree that a dialog about the future is
a good thing. The sticking points are considerable, though, and a solution is
far from clear. As the Journal points out, "The government is going to have to
meet industry at least halfway in figuring out how to handle those who would be
left stranded if a competitive industry were to build out its wireless and
fixed networks only where some reasonable facsimile of the profit motive
In other words: How can businesses still make money while
providing communications services that customers rely on, and have been
guaranteed for decades without forgetting about the rural 1 percent? And how
big a role should government play in that solution?
One thing is certain: To reach its goal by the end of 2014, AT&T
will have its hands full balancing its expansion into rural areas without sacrificing
service or reliability.
Sources: Wall Street
Journal, "AT&T Seeks a Lifeline on Land Lines”; TheVerge.com, "AT&T to cover 300 Million Residents with
LTE by the end of 2014”;
PublicKnowledge.org, "Shutting Down the Phone System Gets Real:
The Implications of AT&T Upgrading to an All IP Network.”