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The Bank of the PSTN

As most businesses small and large try to cope with the reality of the current economy they wonder how they will manage their financing needs. Banks are not lending, even though the government gave them billions. Equity has been halved in many companies, so selling more of it to investors or the street is not a pleasant thought. Expenses need to be cut in order to survive, so where can one turn without going the typical route of just laying people off?

The Bank of the PSTN is open for business. The PSTN is a bloated, overweight and out-of-shape excuse for a communications system. (Sorry Mr. Vail.) Similar to our government itself, it is wasteful, very expensive to maintain and has within it countless local loopholes that drain the funds from anyone trying to use it. There is a better way.

Cutting operating expenses in half by creating a better network is not for everyone. It requires a brain, will and energy. If any of the three are missing it won’t work. The fundamental shift is from circuit-switched TDM to the packet-switched VoIP and it is no longer a leap of faith. The truth is that VoIP works and that if your business does not switch to it you are certain to continue spending too much. In today’s economy that may mean the difference between staying in business and not. For those fearful about security, know this: you are not trading the PSTN for the Internet. You are exchanging TDM for IP. From that simple reality comes 90 percent of the savings. Places where the fat will be trimmed include the cost per minute of a call, the local access from T1 to Ethernet, the cost per port on the equipment, self-provisioning of numbers, in-house IT department control of troubleshooting and repair and much more.

Moreover, the $6 billion Broadband Stimulus Bill making its way through Washington DC right now won’t be spent on TDM, but on Ethernet, wireless Ethernet and wavelengths as well as other broadband technologies. The future is now and it has been with us for several years. Inaction is a luxury that can no longer be afforded by those who do not use VoIP.

Hunter Newby (News - Alert) is the Chief Strategy Officer and a Director of a Special Purpose Acquisition Corporation focused on the communications industry. Reach him at [email protected] or visit

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