Plain Old Telephone Service is at Death’s Door

More than a year ago I stated that it was, “The Beginning of the End for the PSTN” (Public Switched Telephone Network) which is what we all know as the traditional land-line phone in your home. In the last 12 months, the momentum has increased significantly and will continue at a rapid pace. Let me say, “I told you so.”

Along with those Plain Old Telephone Service (POTS) lines are tens of thousands of commercial circuits utilized by businesses and mission critical applications for data being brought back by old school modems and the like. The number of POTS and commercial circuits is decreasing by a double-digit percentage every year. At this rate it is not hard to extrapolate how quickly it will disappear.  Earlier last year, the estimated revenue from these aging networks is 20-25% of what it was at its peak prior to ubiquitous cell phone coverage. The carriers, who wouldn’t commit to anything last year, are now starting to publicize 2020 as the year of “death.” However, given the fact that most of the key manufacturers who make the core switches have quit making them, and the support staff continues to retire from their carriers, it seems that the eminent shut down of the PSTN will be sooner.

If mission critical applications like utility relaying, special services for the handicap, and rural areas rely on these networks, regulatory agencies should step in and force them to maintain these systems until a reasonable migration can be made, right? Well, that may still be the case temporarily since providing that service is part of carriers maintaining Universal Service Fund (USF) subsidies and is enforceable by state regulatory bodies. However, the carriers are working to eliminate this requirement under the promise to provide enhanced services with the new wireless and packet networks. More than a dozen states have already eliminated the Carrier of Last Resort (COLR) provision from their regulatory requirements.  Many other states are in process of eliminating COLR or have written in provisions to allow them to eliminate service as it becomes obsolete.  Either way, the reliability and viability of these networks is and will continue to deteriorate rapidly.

An alternative to the POTS lines is converting them to significantly more expensive and larger T1 circuits or Multiprotocol Label Switching (MPLS) circuits over bonded T1s which can handle Ethernet traffic and other protocols. However, in a December 2014 update to the General Provisions of their “Business Service Guide” AT&T added a section labeled, “GP4.1. – Withdrawal of Service Matrix”.  In this section, they state that in addition to the POTS lines they will withdraw all non-Ethernet private lines which include DS0s, T1s, DS3s on up to OC48s.  This means that those upgrading to T1 or greater copper circuits will have less than 5 years to find yet another, more expensive, solution.

Utilities are one of these mission critical groups that utilize not only analog circuits, but the larger circuits to retrieve field information and control the grid – which is critical to maintaining electric service reliability. They will have to convert these lines to their own private networks or carrier fiber delivering packet based services. With hundreds of millions of dollars in legacy equipment on the electric grid that utilize serial analog connections, conversion to these packet networks is a costly endeavor. However, there are interim steps that can be taken to leverage some of the legacy equipment over modern packet based networks. If you have these circuits, which a lot of utility companies do, planning and budgeting replacements needs to happen now so conversion can begin before it’s too late.

Interested in discussing more? Contact me at dbelmont@westmonroepartners.com or come stop by and see us at Distributech Booth 620 Feb 2-5th.  We would love to hear your thoughts.

2 Comments

  • Michael W. Lind January 21, 2015 11:42 am

    The decline of the PSTN has implications for commercial and home users. Any application, such as SCADA, which uses phone lines for monitoring will likely need forklift hardware upgrades of not just the IT infrastructure, but also the underlying monitoring hardware as well. Carriers may refuse to replace cables as their copper pairs deteriorate, forcing homeowners to use one of the alternative technologies.

  • Dan Belmont January 21, 2015 1:34 pm

    In response to Michael Lind, you are correct about the impact to commercial and home users. However, a forklift upgrade of the actual application hardware and software is not mandatory when you replace the backhaul communications link. We are working with many large utilities across the U.S. today in replacing the carrier circuits with new technologies while encapsulating and enabling the business to continue to leverage the legacy devices until they are economically scheduled to be replaced.

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