July 08, 2011
PSTN 'Sunset' is Not Without Precedent
An advisory group to the Federal Communications Commission should “set a date” for the end of today’s public switched telephone network. That might come as a shock, but networks have to be replaced all the time in the communications business.
The TAC forecasts that only six percent of the U.S. population will be using the legacy PSTN by 2018. That doesn’t mean people will not be “talking,” they just will be doing so primarily on their mobiles and IP network services (“digital voice”).
While that shift obviously has impact on carrier bottom lines, it also has a major impact on the way the FCC (News - Alert) and Congress regulates the telecom industry, including public funding support of both the legacy PSTN and new broadband networks — especially in rural areas.
The practical problem is that as use of the network continues to decline, the overhead costs per line begin to grow very fast. Another way of describing the problem is “stranded assets.” At six percent take rates, a network that has been built out to every physical location only has six percent of those lines earning revenue. It is untenable.
There are issues, ranging from timing to the issue of ensuring that every potential customer has access either to a mobile substitute or a fixed-line substitute, or both. Since IP voice runs on a broadband network, the transition assumes adequate broadband access.
NTT, for its part, plans to migrate remaining traffic on its legacy network to the IP network beginning around 2020, completing the process around 2025 and then deactivating the legacy PSTN infrastructure.
Still, though the magnitude of the transition arguably is larger, communications service providers have had a fair amount of experience shutting down older networks in favor of newer replacements. The original analog voice network was shut down in favor of the 2G digital network. Someday the 2G network will be shut down in favor of the 3G network. At some point in the future the 3G network will be shut in favor of the 4G network as well.
Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO (News - Alert) offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.
Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.
Edited by Jennifer Russell
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