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July 05, 2011

TAC to FCC: Set a Date Certain for the End of the PSTN

According to the accompanying chart with projections from the National Center for Health Statistics, only 6% of the US population will still be served by the public switched telephone network (PSTN) by the end of 2018. [update: I should have given a link to the methodology and data behind this chart. It's http://www.cdc.gov/nchs/data/nhis/earlyrelease/wireless201106.htm]. The Technical Advisory Council (TAC) to the Federal Communication Commission (FCC) recommended last week that the FCC set a date certain for the sunset of the PSTN rather than let the service fade slowly into oblivion as it is doing now. This is actually a big deal although it didn't get much public attention.

(I'm a member of the TAC and of the sub-committee which worked on the PSTN recommendation and was at the Washington meeting where this and other recommendations were made but opinions on this post are mine alone.)

People are making a free-market decision to abandon the PSTN for cellular or VoIP service. People are chatting and texting and emailing and tweeting instead of talking. Carriers can decide how long they want offer this service or try to find ways to extend its life. So, you ask, why should the government get involved with this transition in the first place?

Good question. The answer is that the government is already heavily involved with the PSTN. Without continued government support, the PSTN would probably disappear before 2018 since the carriers' cost to maintain the many miles of copper and the rest of the system doesn't go down nearly as quickly as revenue from subscribers declines. In rural areas, telephone service would have come much later than it did (if ever) without government support of various kinds. Like many government programs, this support never stopped. The Universal Service Fund (USF), which is collected by the carriers from phone users and redistributed by the government, still supports rural telephone service as do a variety of other subsidy mechanisms. Whether they should be or not, small rural carriers are dependent on this subsidy – most of which is for traditional phone service only and not for residential broadband. Now here's the rub: as the most lucrative customers leave the PSTN, the cost of subsidizing the remaining customers – who will be mostly rural with a sprinkling of the elderly and technophobes in more urban areas – will go through the roof. Revenue for the USF, on the other hand, comes mainly from the PSTN so it will dry up (already is happening).

So doing nothing is not an alternative for government. At the very least, preserving the status quo would require finding huge new revenue sources to keep USF and the other subsidies alive. Even if the money were relatively available, that would be a dumb idea. Why continue to subsidize the most expensive and least effective way of keeping people in touch?

We could just end the subsidies and let the PSTN die a natural and probably relatively quick death. But that means those who have no alternative to the PSTN will no longer be able to call 911 or each other. Remember the concern that some people wouldn't be able to watch television on their old sets when the transition to all digital TV happened a couple of years ago? What about leaving great grandma with no 911 and no way to call her daughters?

There needs to be a planned transition to avoid stranding people without voice communication. Government needs to be part of that plan at the very least because the transition will be driven by when government subsidies to the PSTN end.

Government also needs to make sure it transitions its own PSTN-dependent services like E911 so that they work with the technologies which will replace the PSTN.

Although it offends my free market sensibilities, I think government also must be involved in assuring that everyone who now has PSTN service has access to either a broadband or cellular communication alternative. The TAC recommended that the National Broadband Plan be synchronized with the PSTN sunset for just this reason. IMHO it will cost much less to subsidize the buildout of PSTN alternatives than to continue the subsidy of the PSTN (another reason for a sunset date certain is to assure that we don't pile subsidy on top of subsidy). The TAC is planning to work on putting real numbers behind these assertions.

This is only the beginning of a conversation. In order for this to more than academic, an aggressive date certain for the end of the PSTN (or at least subsidies to it and mandates for its use) must be set soon. The date, in my opinion, should be the earliest possible time we can assure that alternatives to the PSTN are universally available, so long as we spend less public money in providing these alternatives than it would cost us to keep the PSTN alive past the date certain. My guess is that we'll find this date is sometime in next five to seven years.

The session

You can watch and listen to the whole Council session if you'd like at http://www.fcc.gov/events/technical-advisory-council-meeting. The discussion of the end of the PSTN takes place during the first 75 minutes of the three hour meeting. The recommendation to set a date is at 14:12 of the video; at 20:25 a Council member asks what should happen on the date certain (the question will be answered fully at the next meeting); at 24:55 there is a question on what it means to sunset the PSTN (also TBD); and at 25.13 I talk about the need to synchronize the national broadband plan with the date certain to assure that everyone has a cellular or broadband alternative to move to.

Scheduling note: It's still possible to sign up for a workshop in Washington, DC this coming Thursday, July 28, on the future of the PSTN. Agenda and signup at telecom2018.com.

Related posts:

Reader Question: What Does the End of the PSTN Mean for DSL?

Reader Objection: The PSTN is Better than Wireless or VoIP

The Ugly End of the Phone Network

Planning for the Ugly End of the Phone Network

States Should Deregulate ALL Phone Services – Not Regulate New Ones

Whom Do We Regulate when the Phone Monopolies Are Gone?

Whom Do We Regulate when the Phone Monopolies Are Gone? – Universal Access


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