Posted on 11/18/2008 8:34:01 PM PST by Kukai
By the end of President Obama's first term, there won't be any more copper landlines left in the country. One of the challenges facing the Federal Communications Commission and the new administration is how to deal with the fallout from the end of this venerable technology. It's gonna get ugly for some people – people who can't afford to do without communication – unless we're proactive about this problem.
Here's what's happening, as you probably know. Young people don't bother with landlines (unless they live beyond cell coverage); they just use their mobile phones or Skype for voice communication. The slightly older set are buying cable's bundle of entertainment, Internet access, and VoIP. They cancel their landlines. People who have broadband access don't need the extra line they used to rent for their dial-up Internet access.
Verizon (VZ) simply sold all of its copper plant in the three northern New England States to FairPoint (FRP). Verizon hadn't been investing in this plant and didn't want to put any more money in going forward. FairPoint, like Verizon and AT&T (T), is losing access lines. In its latest financial results, it reported that access line equivalents are down 9.2% over the past year; total revenue is down as well.
In prime markets Verizon is replacing its copper infrastructure with fiber – one customer at a time; first are the most valuable customers, but Verizon will move steadily down-market with its FiOS offer. FairPoint is making an impressive effort to add broadband access to areas where Verizon had not invested enough to make DSL work. FairPoint has also shown commendable willingness to move beyond traditional copper and use wireless to reach customers out of range of DSL. To compete with Cable's triple play, FairPoint has a loose bundle with DirecTV (DTV).
So look through the data points above to the trends. Revenue from POTS (Plain Old Telephone Service) is simply disappearing. The copper network is generating increasing revenue from DSL , but cable appears to be winning the bandwidth war for Internet access and snaring the voice customers as well. Barring a technical breakthrough in the use of the copper infrastructure (one should NEVER bar a technical breakthrough), there are going to be less and less copper access line in use. In the long term, this isn't a problem because there are better ways to communicate than over fixed copper wire. But we live now, not in the long term.
There are several public policy problems stemming from the decline of the copper network:
At some point the carriers, starting with some of the medium sized ones like FairPoint, aren't going to be able to afford to maintain these networks with too few users. Network maintenance costs don't go down nearly as fast as the number of lines since you can't abandon any trunks as long as there are any customers attached to them. You still have to fix the lines when a tree falls on them even if most of the copper pairs in them are not in use. That's a big deal. Revenue for the Universal Service Fund is still predicated on the good old days when everyone used a landline. Cellular customers get a break. VoIP is a gray area. The USF will run out of money at a time when it may be getting more expensive to provide basic service to people in rural areas. The small rural carriers survive because of subsidies from both the USF and termination charges (which disappear when people don't use their landline phones). The USF mainly funds POTS. If POTS is kaput, there's nothing to subsidize. All of these problems can be solved if they're recognized in time and if there's the political willpower to overcome the interests of those who have a stake in prolonging the declining status quo and postponing the future. For example, small rural telcos like the subsidies they get today and are not in as much immediate danger as their less-subsidized mid-sized brethren; they have substantial political clout with state and federal regulators. The duopoly of one large telco and one large cableco serving each area has resulted in some competition, but not enough to stop Americans from having less bandwidth available at a higher price than most other developed countries. The duopoly has lobbyists to put it mildly.
The solution – at a high level – is breathtakingly simple. By the end of Obama's first term, everyone in the US who has phone service today needs to have both an inexpensive mobile phone and broadband access (in some cases that'll be through the same device). The USF needs to shift its mission from subsidizing POTS to subsidizing connectivity. USF subsidies should go to consumers who are unable to pay for basic connectivity; not to telecommunications providers (rich people with homes in rural areas don't need an indirect subsidy; poor consumers should be able to choose which service provider to give their subsidy to). The revenue source for the USF either needs to move to the general tax base (good policy but bad politics) or at least be broadly based across telecommunications services. There will need to be public investment in telecom infrastructure in rural areas, but that may well be fundable by revenue bonds that get repaid from use rather than taxes; that's what we're planning in Vermont.
Do all that and the telecommunications future'll be bright. The cost of providing telecommunications is gonna come down very fast. More on that in an upcoming post.
Among my “found” palindromes:
STOP POTS
STEP ON NO PETS
WALMART TRAM LAW
I’m sure I have more, “but right now I can’t remember exackly where they was.”
Neither has bread. Science doesn't work that way.
I hate to be the one to pee in your cornflakes, but Bill has DSL.
You can get coax cable without hooking a television to it.
Those aformentioned businesses are not going to buy cellular service for every desk in the office when they can leverage a handful of landlines into an internal phone system capable of sharing the outside connections.
You can do the same with cell phone service or VOIP. Instead of your internal phone network connecting to a copper wire at the outside wall, it connects to a transmitter or coax.
Two things are going to have to happen for copper pair to go away. One is that unlimited call phone use is going to have to get cheaper than POTS for high-volume users -- and that's pretty close to happening. The other is that cell phone reception is going to have to get a lot better, more widespread, and capable of handling the load that will result from switching over POTS lines; that's gonna take a lot of towers.
For VOIP to serve the whole country, you're basically going to have to replace twisted-pair copper with coax or fiber, mile for mile, in every area that doesn't currently get cable. It'll happen eventually, but not quickly. I do like the point of the original post, which is that the programs designed to fund universal access would be better spent promoting the spread of coax than continuing to subsidize copper.
.— . .-.. .-.. .. - -.-. .- -. .——. - -... . - -— -— -... .- -.. .-.-.- .— . .— .. .-.. .-.. .-— ..- ... - .... .- ...- . - -— .-.. . .- .-. -. . .— ... -.- .. .-.. .-.. ... !!!
I guess I'm a dinosaur.
- POTS/copper line dies as soon as it's humanly possible. It's all expense, no gain for the TelCos and their shareholders. A few years back, most of the TelCos spun off their wireline as separate entities from the cellular (Embarq from Sprint, Windstream from Alltel, etc.) because of this; the wirelines often were stuck with the debts, and somehow the FCC thought that was OK.
- Your landline truly is your lifeline. As others have mentioned here, it often works when other things (including the electricity) don't. This is one of the points that the landline-only companies are trying to drive home so they can survive a little longer.
- This is a freedom issue. (And here, I drop into what might be some tinfoil hat type stuff.) If everything hits the fan, some folks who know what they're doing can isolate POTS. If it's possible with fiber or cellular, it is certainly more difficult.
- If you think they can't listen in on wireline, you're fooling yourself.
It's time for me to look into upgrading my Ham license and getting a radio...
Copper is reliable. FIOS isn’t.
I think obama is in the title because
(drum roll please)
OBAMA= free bailout money.
I bet you live in a densely populated metropolis and have no idea what life is like out beyond the City Limit sign ...
“I can’t believe people make 911 calls, or risk their conversations being overheard/recorded all the time, on cell phones.”
I can’t believe anyone would actually depend on their cable company as their only means of telephone communications. I mean, if my cable co’s broadband connectivity is anything to judge by I wouldn’t want to depend on them for phone service.
Actually, we still have an old, wired touch-tone phone connected to our landline. Good thing about that? It usually works even when the power is out. Of course, we also have a couple cellphones.
Remember the cellphones being all jammed up after 9/11? THAT is why I still want a landline. I don't want to be caught not being able to communicate.(I don't have a cable telephone)
Land lines were jammed too on 911. I tried for hours to get through to a friend in Northern Virginia.
I understand that countries like Japan are better wired than the US, but Japan has roughly 1/3rd the population that the US has, and around 150,000 sq. miles to the US 3.5 million square miles. Also much of Japan is not inhabitable due to steep mountains, etc., so the population is far more concentrated, and also far more homogeneous. Wiring a densely populated area roughly the size of Montana is not nearly as big a problem as getting the US wired.
Must have been portions of the country, not one type of phone over another.
May God protect the President of the United States of America and may God continue to Bless the United States of America!
My cell even workes when I travel abroad!
Yup. And some of our lighting is created by heating bits of metal to high temperatures too. Not to mention that we get about in conveyances propelled by contained explosive detonations -- just the way they did in the 19th century.
The landline phones were jammed up, too. There isn't enough capacity in the system for everyone to use it at once.
If anything, a VOIP-based system would be more flexible; packet-switched networks are generally more adaptive than circuit-switched ones. Resources could be shifted from data to voice to adjust to unforeseen emergencies. That could get tricky, though, because the way TCP/IP networks usually work (and the way they're supposed to work, many would say) is that a packet is a packet is a packet.
Everyone switching to cell phones isn't feasible for the near future. The reliability just isn't there. We'd have to quadruple the number of towers to get close, and I'm not sure at what point physics would make more towers useless.
Moving from circuit-switched connections over copper pair to packet-switched calls over coax or fiber is feasible; it's just a matter of running a whole lot of new wire. The utility poles and repair crews are already in place in every part of the country. Your long-distance calls have already been switched over, years ago.
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