From the Enterprise VoIP Experts

November 09, 2012

End of the PSTN

By Contributing Editor

Though it initially sounds jarring, the “end of the public switched telephone network” is coming. For telcos, that’s a technological event, the full transition to Internet Protocol, from endpoints through the network core, an end to analog-to-digital signal conversion and a unification of formerly disparate media types and logical networks.

Others might see something more like an “end of business models,” though that is not what regulators and carriers mean in talking about “shutting down the PSTN.” And AT&T wants a firm and relatively quick shutdown of the legacy PSTN, not a drawn out transition.

AT&T also wants a revamping of legacy regulations that have applied to common carriers, especially rules that make investment in rural and isolated areas difficult. Though sure to generate criticism and opposition, AT&T argues that application of more-stringent rules for “common carriers” – compared to other less-regulated providers such as cable companies, satellite or fixed wireless and competitive local exchange carriers – is a strong disincentive for firms such as AT&T to invest in modern IP and broadband facilities.

Some might still argue that dominant telcos have to be put at a disadvantage, compared to other competitors, for at least some further time to come. But AT&T argues that it is essentially unfair and illogical to regulate competitors in the same industry using multiple regulatory formats.

We might see movement. “Without question, the PSTN Transition to all SIP/IP is  one of the top three issues the Commission has to address in the next term, and the planning for that transition has to begin now,”  said Richard Shockey, Shockey Consulting owner and Chairman of the Board of Directors SIP Forum.

Those concerns in fact are not new, and have been raised for decades. The fundamental problem (some will argue there is no problem) is that different media historically have been regulated in very distinct ways.

“Media” such as newspapers have essentially been unregulated, and have enjoyed the greatest freedom. “Telephone companies” have been the most heavily regulated, with terms and conditions of service as well as prices strongly shaped, and sometimes dictated, by regulators.

In between are over-the-air radio and TV broadcasters, with cable TV operators regulated much as other “broadcasters” are.

All of that becomes rather superfluous when all networks operate the same way, all media can be delivered by any network and any network can support many, if not all, media types traditionally delivered by “different” industries.

From AT&T’s perspective, it makes no sense to regulate today’s broadband IP networks the same way as older monopoly common carrier networks, while allowing other competitors more freedom because they are regulated using other models (print media or broadcast).

So AT&T wants the Federal Communications Commission to conduct real-world experiments of how an all-IP “telephone network” actually operates, decommissioning the old PSTN entirely, while moving expeditiously to harmonize the regulatory framework.

AT&T argues that the greater freedom enjoyed by virtually all other competitors should be applied evenly. In other words, to the extent that more rational, fair regulation now is required, that AT&T should have the same freedom as its competitors, rather than subjecting all other competitors to current AT&T regulation, though that would be one way to harmonize the regulatory environment.

The business impact on service providers, or consumer impact of a shutdown of the PSTN, is impossible to specify in the absence of an agreed-upon set of new rules governing the new networks.

At least in principle, all carriers would operate in a business environment where pricing of calls based on distance no longer make sense, where inter-carrier business arrangements could be quite different, and where, in all likelihood, neither messaging nor voice would be key revenue drivers.

At least for AT&T, it’s now clear that supporting the legacy PSTN, serving ever-fewer customers, does not make much sense. Virtually all services can now be provided using IP networks, and AT&T increasingly does so. But it’s expensive to support both the PSTN and IP networks, especially so as customer on the PSTN continue to dwindle.

It is increasingly likely that we will see meaningful movement toward a sunset of the PSTN in the coming couple of years.

Edited by Braden Becker