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There Won’t Be Any Landlines in 2013

There is a The Wall Street Journal story today about T-Mobile’s plan for a national roll-out of Hotspot @ Home - its WiFi enabled cellphone service.  Currently, according to The Journal, phones from Nokia and Samsung can be used with both traditional cellular towers and some WiFi hotspots; the phones can even roam between the two technologies so you don’t lose the call you’re on when your phones switches from one type of connection to another.  The hotspots can be either those that T-Mobile runs including all the ones they have in Starbucks or your home WiFi network.

This rollout and copycats will doom landlines – the copper line between your house and the local phone company is called a landline – to extinction by the end of 2012.  That’s my prediction, not that of the WSJ.  It is possible if DSL technology is improved that some copper will still be in use to provide broadband connectivity over which phone service’ll run but even this use of the copper is unlikely to go on for long.

The number of landlines nationwide is already declining– especially now that they’re not needed for dialup Internet access.  A story in the Atlanta Journal-Constitution cites sites a census bureau study saying that the number of household with landline phones declined from 96.2% to 94.1% between 1998 and 2003 while the number with cellphones increased from 36.3% to 62.8%  during the same period.  It’s reasonable to think both trends have accelerated in the three years since the study.  In a regulatory filing in January of this year, Verizon said the Virginia now has more wireless subscribers than landlines.

Why do any of us still have landlines today?

For those who talk a lot, it’s cheaper to do that on a landline phone than on a mobile phone.  But it’s even cheaper to talk on a VoIP phone.  T-Mobile drives that point home.  Domestic calls you make at home over WiFi from your T-Mobile phone are “free” – part of the bundle of what you’re paying for. So cost will favor using your mobile phone at home.

For some it’s a question of quality.  Some houses block cellular coverage pretty well; some people (especially here in Vermont and other rural areas) live in places where cellular coverage isn’t good or is simply non-existent.  But that problem disappears if you are connecting to the hotspot in your own home.  Trust me, by 2012  we’ll all have wireless hotspots in our homes by one means or another.

With landlines one phone and one phone number typically serves the whole family.  Is that an advantage or a disadvantage? I think we’re getting used to having personal phones and personal numbers.  But, for those who care, switching technology is available today and will be dead simple to use by 2012 which makes an incoming call to a “family” number ring on any set of individual phones no matter what primary numbers those phones have.

We do tend to have landline phones all over our houses – except for those of us who use cordless phones.  Technology is also the answer to those who don’t want to figure out how to clip a cellphone to their pajamas or less.  Putting your cellphone in a docking station can extend its connectivity to all the traditional phones in the house.  So you can continue to use your internal wiring and existing handsets at home if that’s what you want to do.

The cellphone is also more capable than the traditional home phone.  Pictures, text messaging, address book, screen for caller ID.  I find myself making cellular calls from home because I call from the phone that has numbers stored in it.

By 2012 no more reason to use our landlines - so we won’t.

Usually old technologies have a long tail.   Mainframe computers are still around decades after people (including me) predicted their demise.  I predicted that all calls would be VoIP by 2010.  There’ll still be some POTs then (Plain Old Telephone Service) because not everyone will have broadband and clearly there’ll still be traditional cellular although that will be converting to VoIP rapidly.

But I don’t think the copper plant will last past 2012.  The problem is the cost of maintaining and operating it when it has very few subscribers.  Obviously a huge problem for at&t and Verizon.  And an important social issue as well.

See related post:  T-Mobile, Competition, and the Thirteenth Fairy.

Audio of an interview by Phil Leigh on this post is at http://www.insidedigitalmedia.com/downloads/wifiphone.mp3.

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Metalbuoy

I must disagree with the post that there wont be any landlines in 2013. I have first hand experience, working for Verizon, that although this is what the company would love to be true, it wont(cant) happen, for several reasons.
1. PUC's (public utility commissions) in certain states will never allow a behemoth like Verizon to shut down the copper plant and run strictly on FIOS. It is true that when FIOS is run into a home the copper is removed, but this is not as sinister as it sounds. The FIOS -in COPPER -out policy is in place so you dont have more than 1 wire coming to your home causing unsightly wires everywhere and having 2 network interface devices instead of just 1 (the copper and FIOS interfaces on your home are NOT interchangable). If you ever decide to go back to copper from FIOS we would also do the same, remove the fiber line and network interface, and put the copper equipment back in for you free.

2. As I stated, Verizon would love for this story to be true. The future is FIOS, and copper has become an expensive dinosaur and just not a very good return economically, anymore. Verizon just sold off millions of landlines to some sucker company (fairpoint, i think), who financially cant, and due to the ruralness of the new england area (vermont - rhode island - connecticut) you get the picture, wont ever upgrade what we just sold them to fiber.

3. There will never be 100% compliance by customers to switch to FIOS. You will always have your older folk, people that dont have or dont want computers that dont need it, people that dont like VOIP for whatever reason (Vonage is a joke. unless the technology advances 100 fold VOIP will always only have a 15% share of the home phone base and Vonage will continue to have a $1.85 stock price. (as of 03 02 2008))

4. There will always be CLEC's that use our copper that legally cannot touch our FIOS (these are small, usually local, sometimes fly-by-night companies that buy our lines at wholesale and then put their names on bills and charge the end user retail prices possibly for a few bucks less a month). and they have no plans on buying our copper plant - heck they rent the lines for less than they should so why would they buy?...

Unless those 4 reasons somehow go away, copper isnt going to be history anytime within the next 35 years, minimum. The #'s will continue to decline, I give you that, but if just 1 customer in America still wants a copper landline, we will have to continue to operate the copper plant.

Peter B

My local landline may be the part of POTS that survives. I (and my two daughters) use a VOIP-based long distance & international carrier that I dial a local number to reach, and use for everything except local calls, at rates about the same as Skype or Vonage. We use it for all international calls on our cell phones also. I still get excellent 911 service, pay the local telco only for local service, no DSL fees (I get a free MetroFi WiFi connection for my Internet connection). Long live the "first mile".

DG Lewis

I think the key point is one you threw away at the end: "Usually old technologies have a long tail."

Old technologies with high capital costs, network externalities, and embedded bases have a very long tail, even in the face of overwhelmingly superior technologies.

Telegraph service started to decline in 1970. By 1980, there was no earthly reason to use telegraph service - a 300 bps modem on a standard phone line gave double the data rate and infinitely more flexibility. Aside from embedded base issues, there was nothing about telegraph or TWX that was better, which is a point we haven't yet reached with alternatives to POTS. Yet telegraph service wasn't retired until 1991.

And that didn't require digging up a single yard.

Some of the underlying technology of landline phone service (as provided by the telcos) may change - baseband POTS or derived voice on a DSL connection to an MSAP/DSLAM derivative, VoIP behind that - but a service that looks exactly like landline POTS, delivered over twisted pair, will still be there long after 2013.

Benoît FELTEN

Tom,

I found your post interesting, if ambiguous. If your point is that voice over copper will be replaced increasingly by ToWiFi, then I tend to agree (although the adoption of UMA offers here in Europe is quite slow, much slower than many expected). However, that requires a broadband link, which is currently largely copper-dependent (DSL).

If you're saying that copper will be fully substituted by fiber by 2012 then I can't agree and think that is highly unrealistic. The most efficient cost models for ftth connexions point to connexion costs around 2000$ per home connected in urban areas and upwards of 3500$ in rural areas. At such costs, players are going to be very slow rolling out fiber outside cities and suburbs, if indeed they decide to do it at all (hence the Vermont e-bill you mention in a more recent post).

Furthermore, I should point out what I consider to be a major flaw of the home telephony convergence: the existing offers do not adress homes, they adress individuals. Substituting a home phone with several mobiles phones raises lots of usage issues which haven't been addressed from a marketing point of view and tend to discourage customers. At least that's what we have seen so far in Europe...

Dasher

Copper won't disappear it'll just be reinvented. The copper networks will be used to bring the data from local wireless networks to the backbone.
Copper will continue being used by homes also - not only for the reasons mentioned by Rob regarding contacting the emergency services - but also because of reliability. Wireless interference is already an issue - DECT and WiFi use the same frequencies.
In addition - people don't change things unless it's broken - so home phones (POTS) will continue to be used. The only way that will change is if somebody brings out a device to connect corded phones to the wireless network. They exist at the moment - but the cost is way too high. You won't see widespred or massive adoption until they cost around the 10 EUR mark.

LawsonInCody

So the glacier-like telco's will suddenly melt?

No way. They're not going to pony up to replace 100% of the PSTN, nor will they just give up.

Their seems to be a great deal of ignorance about telephone service in rural areas, and how important POTS will be in remote areas long into the future.

Texrat

Title is extremely hypperbolic and misleading. FTTP (FiOS) is replacing copper, not disappearing. I doubt fiber will be going away any time soon.

Aswath

A nit Tom, as usual. Even though you clearly state that the copper plants will disappear by 2010, at least you equate it to POTS service. Verizon continues to offer "POTS" service over FiOS and they do totally disconnect any and all copper lines coming to a FiOS enabled house. This is important to readers like Rob Nix, for if the only reason he will continue with POTS for its "uninterruptible" service, then I don't think he will get it with FiOS. After all, the house telephone loop is powered locally, with limited battery power supply. Indeed his point suggests my position: a society should have all means of communication available at its disposable. It is fool hardy to throw away a network (as we try to do with railways; ok this is a point of view on a matter beyond my expertise, so don't take it seriously).

Stephen L. McKay

Great post Tom, I couldn't agree more, and hope it happens "sooner, rather than later".

I think the last two comments were off topic, but such things happen in this blogospher.

DAF

I don't think copper will disappear as quickly as you suggest--at least not outside major markets.

Look how slowly VZ is proceeding with their FIOS rollouts, for example--and those *are* in dense areas.

The transition off of copper will take a long time to be fully completed.

Christine

I think that there will be plenty of fiber subscribers, high bandwidth applications like video aren't for the moment going to be happy on wireless. The days of charging for anything more than a dumb bitpipe are over though.

Rob Nix

We recently had some severe wind storms and flooding in our area. Both times our cell service was knocked out for a minimum of three days, but our landline worked fine, even when the power was out. Until the Cell providers can guarantee me that level of service, I'll keep paying $20.00/month for a copper line. 911 is too important to leave up to chance.

Larry Keyes

>>>>>>>>>>>
But I don’t think the copper plant will last past 2012. The problem is the cost of maintaining and operating it when it has very few subscribers. Obviously a huge problem for at&t and Verizon. And an important social issue as well.
>>>>>>>>>>

Interesting post. Now how does the affect, or not affect, the attempt by Fairpoint to purchase the Verizon lines in VT, NH and Maine? Should the sale be allowed, given that it is in a dying industry?

bill

Patrizia said
"So the city are unlivable, the air is unbreathable..."

I don't know what city Patrizia lives in, but the air in most cities in the developed world is FAR more breathable, FAR cleaner, than it was a generation ago. The CO2 that poses a danger to global climate, and must be dealt with, does not make the air unbreathable.

Her posting does indicate a truth about modern life, however, in my opinion. The abundance of life in the developed world requires us to learn how to say "no" to some of what is available to us. We need to develop the wisdom to turn off our cell phones (they do have an off switch, Patrizia) some of the time. We need to say no to unnecessary consumer goods, and excessive food, etc. But we should be grateful that we have so much available, and the option to choose what is truly useful to us.

Patrizia Broghammer

That will be a very big mistake.
A mistake they will understand when somebody will take the pain to explain that too many waves are not good for our environment.
On one way people talk about pollution, the devil of our generation, but how many do something against it?
We have to find new alternative energy sources, but not only.
We have to change our lifestyle, because what is too much is also useless and what is useless is noxious.
When everybody will call on a cell phone (because we will have flat reates) and talk about the stupidest subjects, talking for talking, the air we breath will be so polluted that illnesses like Alzheimer or brain tumors will be so widespread.
They are not dangerous, they say...but it is just because there is so much money involved...
It will happen exactly what happened with cars.
No more investments in public transportation.
Who needs a train or a bus when everybody has his own car?
So the city are unlivable, the air is unbreathable and it is almost impossible to do in the little time we have what we didn't all the time we missed.
I do not want to be a Cassandra of the future, but the future IS in the Landline, even if they are less profitable, even if a phone in you paijama can look much more comfortable (but is it really?)
We need to have less of the common type of communication to be able to communicate again...less of the so called "humanity" to be a little bit human again...and that also includes the freedom NOT TO CARRY a phone in our pajama...

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