Consumer Choices Driving IP Transition

04.22.2013

Congress, the Federal Communications Commission (FCC) and the telecom industry are just beginning the debate about what regulatory and legal changes will be needed to transition from legacy phone networks to Internet-based services. To contribute to that conversation, USTelecom is hosting several briefings on Capitol Hill exploring the technological transformations taking place in an all-IP world. The first set of briefings looked at the first wave of industry’s regulatory filings explaining the framework for upcoming changes.

“Consumers are really driving the transition,” said John Horrigan, vice president of the Joint Center for Political and Economic Studies, pointing out that smartphones are being adopted at a faster rate than wireless phones. In today’s marketplace, the majority of consumers have already dropped landline services in favor of wireless or Voice over Internet Protocol (VoIP) services.

The “plain old telephone service” (POTS) networks have nearly reached the end of their useful life, and are rapidly being replaced by broadband, explained Verizon Vice President David Young. Not only is it expensive to maintain the older systems for a dwindling number of consumers, carriers find it can be costly and difficult to buy equipment to keep the aging infrastructure functioning.

“We have to incent people to work on this technology,” said AT&T Senior Vice President Bob Quinn. “No one is making this equipment anymore.” The “vast majority” of AT&T’s consumers have already made the jump to broadband, IP services, with only about 25 percent still using landlines. AT&T has proposed – and sought the commission’s approval – to conduct trials in a handful of its 4,500 wire centers so technical problems can be identified and solutions found before mounting a full-scale transition.

CenturyLink said it would participate in such a trial. “We think market trials are the right way to go. The transition is going to be very complex,” said CenturyLink Senior Vice President Melissa Newman. CenturyLink, which serves a wide swath of customers in extremely rural areas, will be taking a different  approach to the transition than AT&T or Verizon because of the unique circumstances of its service area.

Horrigan asked carriers how consumers will fare in the future if the services they get are no longer regulated the same way as monopoly era voice services. “Who do consumers complain to?”

Education will be an important to help people understand what is happening. “Change can be disruptive,” Young said. A lot of people relying on legacy services may be older and reluctant to make changes. The first step will be to encourage people to make the shift, and explain the benefits they will get from adopting new services. It’s also important to realize that the transition will take a long time to fully finish, so there is time to help people make the adjustment.

“This is going to be a brand new world, and we’re kind of in it but they (customers) don’t know they’re in it,” Newman said.
 

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