[Podcast] The Perils of Progress – Not all Sunsets are Pretty
It comes as no shock to anyone–especially someone in the communications technology industry–that technology moves forward at a rapid pace and builds upon itself. After all, we’re all familiar with Moore’s Law and Edholm’s Law.
Internet Protocol technology has carried the communications industry through an amazing revolution over the last few decades and has changed the core essence of voice communications, not only in the United States, but also around the world.
It wasn’t that long ago that long-distance telephone call rates were nearly $.20 a minute domestically, and international rates were even more astronomical. The main reason for this was primarily because the infrastructure was so expensive, and it was a matter of cost recovery by the local exchange carriers.
New technology that allowed the migration of analog switching equipment to digital packet networks, and bandwidth increases over existing mediums, such as DWDM technology (effectively increasing the number of colors on a single fiber from two to more than 160) has allowed carriers to increase both bandwidth and throughput, spreading the effective cost over a much larger audience.
But what’s good for the goose may not be good for the gander. In other words, while IP technology has enabled global communications to occur at a much more affordable rate–effectively reducing the cost per user–it has also had an unintended negative side effect that will cause significant hardship for some users.
For some time, now it’s been reported that potential interoperability issues exist with some legacy, analog-based technologies such as TDD/TTY devices for the hearing impaired or deaf, medical monitoring devices, home alarm systems, fax machines and some ATMs.
Additionally, E911 can become problematic, not necessarily because of the technology, but because the user can relocate the endpoint without administrative control. This breaks the model that a telephone number equals a physical address or location, which is the core of our current E911 architecture.
There is no denying that analog-based telephony is a dying breed.
Last December, an article that appeared in ‘Governing’ by chief editor Tod Newcombe put forth some very sobering statistics. According to US Telecom, ILEC’s in the US have lost 70 percent of the residential telephone business to wireless carriers and cable providers. With that kind of degradation in customer base, it completely upsets the revenue model and return on investment for the large Central Office equipment required to provide legacy analog landline services.
It really comes down to simple math: For example, you might buy a tiny Central Office for $5 million, which has an expected lifespan of 10 years, or 120 months. That Central Office services 10,000 customers, making the effective cost per customer $4.17 per month.
If 70 percent of your customer base disappears, your monthly cost per customer goes to $13.89 per month–representing a 336 percent increase in expense over revenue.
Ultimately, the Federal Communications Commission is there to protect us. Large carriers can’t simply do what they want, when they want. What they do, and what they charge is controlled by tariffs that are under scrutiny by the Federal Communications Commission, and ultimately the general public, if you know where to look. The FCC is very proactive with information, and distributes a Daily Digest linking relevant filings, and activities.
Subscribing is easy:
To subscribe to the FCC’s free Daily Digest mailing list, send an email to email@example.com. Leave the subject line blank. In the body of the email, write “subscribe digest” followed by your first name and your last name. For example, “Subscribe digest Mark Fletcher.”
If you need additional help in subscribing, email EDOCShelp@fcc.gov
The FCC Transition Task Force, formed under FCC chairman Tom Wheeler’s directive, will produce status reports, requests for comment, and other pertinent information that will all be distributed through the Daily Digest. In addition to other items of interest, I for one will be monitoring this initiative, and the ultimate sunset of the PSTN network.