As part of an open comment period for the FCC related to ideas for a national broadband plan, AT&T filed a lengthy document which detailed the miserable future that is forecast for public switched telephone networks that provide traditional phone line service (a.k.a., POTS, plain old telephone service). The AT&T comments were part of a lengthy, 32-page document available for viewing on the FCC's website (see AT&T filing with the FCC), and it makes for very good reading for anyone in our security industry who makes a living monitoring alarm signals or connecting security equipment to phone lines.
For those of you who don't have the time, I pulled the following excerpt from the comments document, as I think it provides the gist of the entire filing.
[T]he business model for legacy phone services is in a death spiral. Revenues from POTS are plummeting as customers cut their landlines in favor of the convenience and advanced features of wireless and VoIP services. At the same time, due to the high fixed costs of providing POTS, every customer who abandons this service raises the average cost-per-line to serve the remaining customers. With an outdated product, falling revenues, and rising costs, the POTS business is unsustainable for the long run. Yet a web of federal and state regulations has the cumulative effect of prolonging, unnecessarily, the life of POTS and the PSTN.
Due to technological advances, changes in consumer preference, and market forces, the question is when, not if, POTS service and the PSTN over which it is provided will become obsolete. In the meantime, however, the high costs associated with the maintenance and operation of the legacy network are diverting valuable resources, both public and private, that could be used to expand broadband access and to improve the quality of broadband service.
In the filing, AT&T cites some dramatic statistics about the decline of POTS. Here are a few:
- 700,000 POTS subscriber lines are being disconnected each month
- 90% of U.S. households have access to broadband
- 66% of U.S. households employ a broadband connection
- An investment of $350 billion would bring 100Mbps broadband service to all U.S. consumers
- 18 million households are using VoIP (2009 numbers), and by 2011, 45 million households are likely to be using VoIP
- 25% of U.S. households have already abandoned POTS
- Less than 20% of U.S. citizens are using POTS exclusively for voice service
It's sobering information for our industry and it heralds major technology changes, some of which we're already beginning to see. Look for more coverage of these trends in the coming weeks.