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Is AT&T's plan to end landline phone service crazy, or just crazy enough?

Is AT&T's plan to end landline phone service crazy, or just crazy enough?


Like ripping a bandage off, getting rid of copper is painful but necessary

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POTS, the loving acronym for "plain old telephone service," is the single oldest continuously operating network in existence. It predates even the earliest vestiges of the internet by three-quarters of a century. It's so ubiquitous and so reliable that the notion of eliminating it is quite literally banned by law — it's written into Section 214 of Title 47, the portion of the US Code established largely by the Communications Act of 1934:

No carrier shall discontinue, reduce, or impair service to a community, or part of a community, unless and until there shall first have been obtained from the Commission a certificate that neither the present nor future public convenience and necessity will be adversely affected thereby...

Weaning the government off our most ubiquitous network won't be easy

And as modern technology laps POTS over and over again, those regulations increase the burden on legacy carriers like AT&T and Verizon Communications (not to be confused with its part-owned subsidiary Verizon Wireless) to maintain an ancient network whose utility decreases daily. That's not to say that POTS isn't still vitally important: the most rural parts of the United States are often served by no other type of service — service that is guaranteed by federal requirements and subsidized by the Universal Service Fund, which exists in part to keep prices reasonable in areas that would otherwise be unprofitable for carriers or unaffordable for customers.

Naturally, these legacy carriers recognize that POTS's century-long reign as a profitable venture is coming to an end, but weaning the world's largest bureaucracy — the American government — off of traditional telephone service is an uphill battle that could require the largest rewrite of the Communications Act in the past twenty years.

There's a way to do this that's in everyone's best interest

AT&T's Project Velocity IP, announced today, reads on the surface as a very positive story about investments in a thoroughly modern wireless and wireline network: 300 million American residents covered by LTE by the end of 2014, significant buildouts for U-verse broadband, and fiber connections for a million more businesses. That's good, but the announcement also comes in tandem with an FCC filing that hopes to start the process to get large swaths of Title 47 rewritten, clarified, or bypassed in order to prevent it from getting hogtied into continuing support for legacy copper infrastructure that doesn't use IP, the fundamental protocol for transmitting data packets across the internet.

The biggest problem with that, it seems, is that AT&T is only committing in its FCC filing to offer broadband service to 99 percent of its current wireline footprint, which leaves the other one percent — those in the most rural, underserved areas of the country — in limbo, since the carrier also wishes to decommission its legacy network. Here's the most telling portion of today's 24-page filing (bolded portions added by us):

At the same time, AT&T plans to invest $8 billion in wireless network initiatives, including, but not limited to, expanding LTE deployment to reach 300 million people, by year-end 2014. As part of that initiative, AT&T will offer wireless communications alternatives to customers living in particularly high-cost areas. These alternatives will include AT&T's innovative Mobile Premises Services, which allows customers to make calls using ordinary wireline handsets connected to wireless base stations. Together with the wireline expansion and upgrades described above, AT&T's investments are projected to extend high-quality IP-based broadband services to 99 percent of all customer locations within AT&T's wireline service area.

For its part, an AT&T spokesperson tells us that "we fully intend to serve our entire customer base and we will not stop serving anyone," and that they'll "continue to evaluate methods to serve the remaining one percent of the customers as [they] see changes in technological capabilities, cost efficiencies, and the regulatory environment." It's confusing language that wouldn't necessarily put me at ease if I were living in an affected area.

It's going to take a watchful regulatory eye

But the FCC, slow-moving beast that it is, is already working on solutions for that one percent: the so-called Connect America Fund, part of the National Broadband Plan, was designed to replace the old Universal Service Fund with a more modern program designed to encourage the deployment of high-speed internet service to rural areas that wouldn't otherwise get it. There are undoubtedly still hundreds of thousands of systems and devices — fax machines, burglar alarms, and so on — that are designed for POTS and don't play well with IP-based phone adapters like AT&T's Mobile Premises Services, but it's unreasonable to keep our ancient copper alive indefinitely to service them.

And the FCC's reaction to AT&T's plan seems cautiously optimistic. Chairman Julius Genachowski praises the announcement as "proof positive that the climate for investment and innovation in the US communications sector is healthy," goes on to mention the National Broadband Plan, and says that the company's FCC petition is "suggesting issues to consider in our ongoing work to modernize our rules for the evolving communications market." You don't typically use the word "modernize" to describe something that you're prepared to oppose.

AT&T isn't about to make any moves that aren't in the best interest of profitability, but that doesn't mean we should be holding the nation's infrastructure back: POTS is a century-old system, and every dime spent maintaining it is a dime better spent building out a modern replacement. The country did this (albeit on a much smaller scale) in the last decade with AMPS, the analog cellular network whose spectrum and ongoing investment needed to be taken to serve better, faster, and more modern replacements. It stands to reason that the country should do the same with wireline, but it's going to take billions of private investment — in concert with a watchful regulatory eye, a long wind-down period, and a willingness to adapt decades-old laws — to make it happen in a way that's in the best interest of Americans.