PSTN Death is Near

I vividly remember driving my car in 1999 – two years after the company where I am CEO, TMC decided to launch Internet Telephony Magazine and thinking VoIP was going to change the way communications works and eventually kill the PSTN. It seemed to me that within five years most of the world would make the transition as the cost disparity at the time was quite large between the PSTN and VoIP connections. Moreover, there were a myriad of free calling services using VoIP such as Dialpad which were ad supported, putting even more pressure on traditional telecom networks.

Within a few years the dotcom and telecom bubbles burst (we collectively said goodbye (details) to Dialpad and its competitors) and the cost for using the PSTN dropped substantially in order to better compete with IP communications alternatives. So my internal projections which I am not sure I ever wrote about before turned out to be too optimistic.

The period between 2001-2004 could easily be referred to us the nuclear winter of VoIP – well communications in general is more like it – not to mention tech. But the last six years has seen continuing evolution in IP communications with VoIP peering and SIP trunking just some of the latest solutions to make a cost savings and productivity–boosting technology even better.

And from the consumer standpoint – they all know about Vonage, Skype – have cell phones and use IM and social networking to communicate. So it will come as little surprise to you that according to an article from TMCnet’s Peter Bernstein:

  • As of May 2010, 23% of respondents lived in a mobile-only household
  • 37% of adults in the 18-24 and 30-34 age groups lived in a mobile-only household
  • Only 6% of the US population will still be served by the public switched telephone network (which is defined as TDM access line service) by the end of 2018

Simply stated, the PSTN is dying.


Industry leader and past TMC conference speaker Tom Evslin a person who I couldn’t respect more, even suggests the government needs to get involved to ensure there is universal access as we enter a transitionary period. Specifically he explains that USF dollars help maintain the network and as more high-value customers leave it, there are fewer dollars to maintain service in areas which are expensive/hard to reach and potentially devoid of alternatives.

Specifically he says:

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.

BTW – it is always tough to argue with free-market sensibilities – my confidence in the government doing anything right beyond putting out fires, enforcing contracts, and keeping us safe through the military and police force is pretty low. Of course this is in part because I see the law of unintended consequences rearing its ugly head virtually every time the government acts. See Net Neutrality: More Unintended Consequences and  Dear Government, Please Stop “Helping” Us for details. Want more? Google effectiveness of Obama stimulus.

But getting back to the discussion on the PSTN – Bernstein suggests a separation between the pipe and service business. But are we to rely on the government or a separate monopoly to upgrade these pipes for us or is it better to allow a combined service/pipes company provide both? In the latter situation, the combined entity has increased incentive to upgrade the pipes quickly so as to provide value-added services over the connection.

Of course in my example I assume that one company will be responsible for maintaining both a copper and fiber network – would it make sense to have multiple companies maintain networks which are unprofitable for one company to maintain?

Moreover, would it be better to wait for Congress, the Senate and White House to come to an agreement on which fiber pairs should be run to our homes? Or will a separate company manage these networks and if so, who runs that? Will the FCC decide? By the way, is the new company regulated? Will it be forced to dig up and replace the technology from time to time? And finally, who pays for it?

Of course this situation is far from simple to solve and I wonder if satellite providers may not be a missing puzzle piece requiring more study. Then there are new technologies such as white spaces/super WiFi which could theoretically work in a meshed capacity to solve some of the remote access issues we now face.

I’d love to hear from you if you have some thoughts on how to resolve the situation and bridge the gap.

Be sure to check out TMC’s Super WiFi Summit, September 13-15 in Austin, Texas to learn more about this promising technology and how it could could be part of the solution to sunsetting the PSTN.

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