Plain Old Telephone Service Obsolete?
The FCC issued a notice of inquiry in early December 2009 to determine how to move to an all Internet Protocol system. In response to the FCC notice, AT&T issued a letter to the FCC stating, “Due to technological advances, changes in consumer preference and market forces, the question is when, not if, Plain Old Telephone Service (POTS) and the Public Switch Telephone Service (PTSN) over which it is provided will become obsolete”, adding, “Congress’s goal of universal access to broadband will not be met in a timely or efficient manner if providers are forced to continue to invest in and to maintain two networks”.
According to AT&T, 22% of households have given up land line service in favor of a mobile phone, while 700,000 landlines are being dropped every month. By the end of 2010 cable companies could be delivering broadband phone service to more than 24 million consumers with expectations forecasting the total VoIP subscriber count as high as 45 million by 2011.
Revenue from POTS is dropping at a rapid pace. In 2000 POTS posted a revenue of $178.6 billion which fell in 2007 when POTS posted a revenue of $130.8 billion, a decrease of $47.8 billion. AT&T says that while the customer base is falling, costs are rising. The reason for this is incumbents must maintain their PSTN’s over the progressively smaller customer bases.
The result of this,” a huge proportion of the capital resources available to some of the largest telecommunications providers in the country is being directed, not towards improving broadband speeds or bringing broadband to more customers,” AT&T contends, “but rather towards maintaining an increasingly obsolete network that is no longer capable of providing the services and features that American consumers and policymakers demand”.
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