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.
Why do we have to finish this transition? As the FCC continues the implementation of the National Broadband Plan, it is critically important to maximize the amount of private capital that goes into the construction of broadband infrastructure. We know from experience that universal service dollars are insufficient to completely close the broadband gap identified in the Plan. We also know that as consumers and subsidies (implicit and explicit) move away from POTS infrastructure into broadband, the burden of retaining dual infrastructures is unsustainable. The National Broadband Plan examined this dilemma at length and concluded that to “require certain carriers to maintain POTS – a requirement that is not sustainable – [would] lead to investments in assets that could be stranded.” To put it another way – any dollar spent on maintaining a POTS infrastructure is a dollar not being spent on broadband.
But in conducting that transition, we know that none of those “last adopters” can be left behind. That is important to everyone involved – which brings me back to our petition. In order to ensure that this IP transition occurs as smoothly as it can, we requested that the FCC open a proceeding to oversee some trials of this IP transition to capture and address the operational, technical and policy issues that necessarily will arise as we go through the process of retiring and transitioning away from TDM technology and services. Some folks argue it is not necessary. They either want to pretend that this transition is not really happening or that it will work better in a technical and policy “free-for-all.”
At AT&T, we respectfully disagree. We aren’t smart enough to know all of the issues we will face in executing this transition, and the idea of a trial run to identify these issues and resolve them seems to us to be most responsible way to effectuate this transition. As we see it, the only two real questions raised by our petition are: 1) does the FCC have the authority to remove the legal and regulatory impediments to retire legacy technology?; and 2) doesn’t it make sense to do a limited geographic trial of this transition to put in place the framework that allows us to complete this transition in the least disruptive way possible? We obviously think the answer to each of those questions is a resounding yes. Now, we will see what everyone else thinks.