Posted by: Bob Quinn on January 28, 2013 at 2:08 pm
Today, we filed comments reaffirming our request to have the FCC conduct geographic trials to oversee the final transition away from the legacy POTS infrastructure that has served this country for more than 100 years. I say the “final transition” because the reality is that the vast majority of consumers have already made this transition. As US Telecom ably documented in its Switched Voice Non-Dominance Petition, the number of consumers who connect to the POTS infrastructure and the use of that infrastructure have plummeted in the last decade. Consumer access lines and minutes of use (MOUs) are down +70% from peak totals as more and more consumers switch to VoIP alternatives (offered by companies who have physical networks as well as over-the-top virtual network service providers), wireless services and other forms of digital communications.
I was fascinated by some of the numbers that US Telecom cited in its petition compared to what we have seen on our side of the POTS business. At the end of 2011, AT&T had just under 19 million consumer switched access lines in service (a nearly 16% decline from YE2010). If that rate of decline continued in 2012 (we will know when our annual report comes out in March), we could cross under 16 million consumer switched access lines in 2012. Skype, on other hand, reported over 20 million US users in 2010 and that business is growing.
These numbers are staggering, but not really surprising. My kids range in age from 16 to 21. I asked them the last time they actually had a conversation on the landline phone in our house to talk to one of their friends (as opposed to wishing Grandma a happy birthday). They laughed. That is a long way of explaining what I mean when I say we need to begin the final transition. One of my colleagues called it “transitioning the last adopters.” That makes sense to me. Even baseball – the sport that cherishes its long-held traditions – has decided to transition away from POTS for its calls to the bullpen.
Posted by: Frank Simone on December 19, 2012 at 2:17 pm
Today, USTelecom filed a petition requesting that the FCC declare that traditional phone companies no longer possess market power when providing switched access services, or more plainly, “plain old telephone service” (POTS), and therefore are no longer subject to dominant carrier regulation under the Commission’s rules. Given the many ways all of us communicate with each other these days this seems pretty obvious, but let’s review some of things that have brought us to this point.
The changes occurring in the communications landscape over the past several decades have forever changed the way we reach out and touch someone. For those of us with children, the changes are apparent every time we examine our “telephone” bill, and a quick review of mine over the last six months starkly illustrates the point. Each month on my mobile phone account, my unused AT&T “roll over” voice minutes grow as voice calling becomes a smaller and smaller portion of the communications options my family uses. Thousands of incoming and outgoing mobile text messaging details, most of which are associated with my children’s phones, fill the majority of the call details outlined on my bill. The ratio of text messages to voice minutes for my children is three to one. Interestingly, almost exactly the reverse is true for my wife and me. And what is missing from my home phone and mobile phone bills is as profound as what is included. Missing are the hundreds of voice minutes that have been replaced by email threads, tweets and status updates on social networking websites.
And despite the obvious shift observable in our children, you would be wrong to think the communications shift is limited to those born after AT&T was split into “Baby Bells” in 1984. The very first “baby boomers,” born in 1946, are also switching from landlines to new technologies. Fifty-three percent of Americans aged 65 and over use the Internet and email, and 31% of Americans aged 55 to 64 use smartphones.
Posted by: Bob Quinn on December 3, 2012 at 4:08 pm
Last week, Sprint confirmed that, beginning January 1, 2013, it was imposing upon its Nextel, non-CDMA iDen subscribers a $10 monthly surcharge in order to incent those customers to move off of its legacy Nextel infrastructure and onto its CDMA Push-To-Talk infrastructure. The move to encourage those subscribers to move to new technology is absolutely logical. Back in 2007, the wireless industry was faced with the task of retiring the industry’s analog network infrastructure. To accomplish that, carriers created similar charges to incent subscribers to abandon the legacy technology and move to digital phones that worked (then) on the 2G network. After a 5 year period of transition, despite the fact that there were still several hundred thousand subscribers who had not yet migrated to the new technology, the carriers were permitted to turn off the analog networks. When that happened, the world did not end. Customers who had not yet swapped out their equipment had to come to a phone store and exchange their obsolete equipment for new devices. We saw an orderly transition whereby the infrastructure providers were permitted to retire legacy infrastructure and migrate their customer bases to digital networks.