POTS, PSTN cannot afford to retire

Anybody not involved in the telephone business will probably be surprised to find that the old TDM telephone networks are still very much alive and in place. The old technologies were supposed to be phased out and replaced by digital technologies. The FCC started talking about this before 2010. In 2013, Tom Wheeler, the FCC Chairman at the time, announced an effort to force the needed changes, which was dubbed the IP Transition. The goal of the transition was to upgrade and replace the public switched telephone network that was used by every telco, CLEC, and cable company for exchanging voice traffic.

https://potsandpansbyccg.com/2024/06/27/can-we-please-kill-legacy-telephone-requirements/

Analog voice service over the legacy publicly switched telephone network (PSTN) was declared at end of life in 2009 -- around the same time the United States should have fully replaced it with Internet protocol (IP) delivered over fiber to the premise (FTTP). It wasn't because AT&T and Verizon couldn't afford to retire it as FTTP modernization lagged.

Industry opposition to FCC Title II rules could lead to state-based regulation

Advanced telecommunications providers favor a federal regulatory scheme over disparate state by state regulation, correctly arguing that telecommunications is essentially interstate. But in opposing the U.S. Federal Communication’s Commission’s adoption of its Open Internet rulemaking classifying Internet protocol telecommunications as common carrier utilities under Title II of the federal Communications Act, they are potentially setting themselves up for state-based regulation in the unlikely event they prevail in their judicial challenge to overturn the rules.

States could respond by enacting their own statutes treating advanced telecommunications as a common carrier utility, imposing universal service mandates barring neighborhood redlining and imposing rate regulation in order to ensure access and affordability and promote digital equity. While providers would claim universal service mandates impose cost burdens they cannot bear, states could point to state and federal subsidies they’ve received to build infrastructure in support of these goals.

Uncertainty and delay could also prompt states to act since litigation over the FCC Title II rules could take several years to be fully adjudicated up to the U.S. Supreme Court. The case would require the high court to review its 2005 ruling in Brand X Internet Services, et al. 545 US 967 (2005) wherein the court upheld the FCC's regulatory authority under the Chevron doctrine of judicial deference to administrative agency interpretation of statutory law. Brand X, however, could be undermined if the Supreme Court discards the Chevron doctrine in a case argued earlier this year, Loper Bright Enterprises v. Raimondo, bolstering the claim by providers that a Title II regulatory scheme making advanced telecommunications a common carrier utility is a major public policy issue within the purview of Congress and not administrative agencies.

ROI challenge delayed America’s modernization of copper to fiber in 1990s. It persists in the present as demand drives crisis of access and affordability.

While copper lines account for just 5 per cent of networks in the US, Sambar noted a single copper line must be maintained all the way out to a customer’s location. There could be thousands of copper lines sheathed at a central office, which need to be maintained to serve the customer who is miles away with the single line.

The copper lines also require massive switches in central offices to provide voice services, which Sambar explained use eight to ten times the amount of energy as a server. AT&T could replace the switches with two servers in a central office, which would cut down on the energy cost, but the servers will need software, installation and rewriting all the systems that were written in the 1960s or 1970s. All of which will cost more than keeping the switches.

“The payback period is 15, 16, 18 years long so it’s not economical to do it,” Sambar said.

https://www.mobileworldlive.com/att/att-makes-case-against-keeping-copper/

The long-term ROI issue AT&T’s network chief Chris Sambar raises was as relevant in the 1990s during the Clinton administration as it is today. Had telecom policymakers done a diligent job of assessing the costs and economics, they would have asked if investor owned telcos like AT&T that must generate returns on investment over relatively short periods were up to timely modernizing the legacy POTS copper outside plant to fiber and installing optical switches in COs and field distribution equipment. Timely as by the late 2000s.

And if it was determined telcos were not, then alternatives such as public and utility cooperative ownership -- that the Biden administration noted in its original 2021 infrastructure bill don’t face the additional cost burden of earning shareholder profits -- should have been developed. None were.

Telcos were left to deploying now obsolete DSL technology over decades old copper. Given the Biden administration’s recent assessment of the merits of the public and utility coop models and the ongoing ROI challenge facing investor-owned providers, the conditions for developing those alternatives remain in place today.