The End of the Wired Telephone Network is Coming...But Not Soon Enough

A New York Times article cited complaints from some residents (one, actually) of Mantoloking, an island off the coast of New Jersey that was badly hit by Hurricane Sandy in October 2012. The problem? Verizon, one of the companies that provides voice communications for Matoloking, had decided not to rebuild the island’s copper telephone network, which was destroyed by the hurricane. Instead, the company offered residents a wireless phone service, at least as a short-term fix. “Verizon decides then and there to step on us,” the article quotes the resident. In a column, the Wall Street Journal’s Holman W. Jenkins, Jr. took issue with efforts to turn Mantoloking into an “object of pity” for being left without telephone service as a “second blow” after the hurricane. Verizon isn’t rebuilding destroyed Public Switched Telephone Network (PSTN) networks because they are cruel, but because there are already better options.

Indeed, natural disasters aside, most Americans have already made the switch to digital telephony, and have done so on their own schedule and for all the right reasons. The Internet’s packet-switching architecture, open standards, non-proprietary protocols, peered networks and digital hardware are clearly better than separate, closed networks based on older analog technologies. They are also cheaper to operate and maintain. Competition among Voice over Internet Protocol (VoIP) providers is fierce, and prices are falling. As the number of homes yet to cut the cord to the PSTN network continues its precipitous drop, the endgame is now in sight. Even the Federal Communications Commission, which regulates the old network under rules largely unchanged from the days of the government-sanctioned telephone monopoly, has called for its quick and orderly retirement. But there’s a catch. Decades-old regulations still on the books require the continued operation of the decaying and obsolete analog network, no matter how few users it still has and regardless of cost. The legacy PSTN rules have unintentionally created an enormous black hole for regulated network operators.