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Cable Technology Feature Article

December 31, 2009

AT&T Calls for Firm Date to Sunset the PSTN

By Gary Kim, Contributing Editor

Remember the process leading up to the decommissioning of the analog U.S. TV broadcasting air interface and a clear transition to high-definition broadcasting? AT&T (News - Alert) now has asked the Federal Communications Commission to create an orderly timetable along those general lines for a shutdown of the analog phone system in the United States. AT&T's argument is that investing in two separate networks, the “dying” public switched telephone network and the coming IP network, is retarding the deployment of the new network.
AT&T also has asked for resolution of a number of long-standing regulatory policies governing universal service, inter-carrier compensation, carrier of last resort and related rules that, although a staple of the analog telephone business, are seen by AT&T and others to be inhibiting investment in the new broadband networks that are the future of the entire wired communications business.
“Congress’s goal of universal access to broadband will not be met in a timely or efficient manner if providers are forced to continue to invest in and to maintain two networks,” AT&T officials said. “Any such forward-looking policy must enable a shift in investment from the legacy PSTN to newly deployed broadband infrastructure.”
With an outdated product, falling revenues, and rising costs, the POTS business is unsustainable for the long run,” AT&T officials said. “Yet a web of federal and state regulations has the cumulative effect of prolonging, unnecessarily, the life of POTS and the PSTN.” And as you might guess, AT&T says outdated government regulations are stifling investment in the coming new network.
“One of the most important steps the Commission can take to facilitate an orderly transition to an all-broadband communications infrastructure is to eliminate the regulatory requirements that prolong the life of POTS and the PSTN,” AT&T reported in its filing.
“Perhaps the single most important feature of Commission action at this time is the establishment of a firm deadline at which point the transition will be complete,” AT&T officials said.
The statement is less radical than might first appear. Every executive in the global telecommunications business realizes that all communication networks are in a process of shifting to multi-purpose IP networks. The only real issue is the transition. Perhaps the novelty here is simply that this is the first time AT&T has called for setting a firm deadline for sun setting the PSTN.   
The current inter-carrier compensation regime--with all the arbitrage and inefficiencies associated with that regime--should be replaced with the unregulated IP-based model that currently characterizes the exchange of Internet traffic, AT&T argues. As part of the transition, universal rules must be revamped, as something most service providers, analysts and attorneys believe is inevitable or necessary.
But AT&T also says many other outstanding major regulatory issues also must be resolved in ways that are conducive to new investment and are competitively neutral.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Kelly McGuire