FROM TRADITIONAL LANDLINE TO IP TELEPHONY A POSSIBLE
FROM TRADITIONAL LANDLINE TO IP TELEPHONY: A POSSIBLE ANOTHER WAY Bill Levis Colorado Consumer Counsel bill. levis@state. co. us June 10, 2013
How did it all begin? • Telephone started unregulated • Result - confusion and competition
The Bell System • Theodore Vail pushed one system, a “natural monopoly” • Result (except in rural areas) national system which controlled wires, rates and equipment that customers rented at exorbitant rates • 1934 Communications Act-universal voice service
“One Policy, One System” Challenged • Over time, anti-trust cases addressed abuses of Bell System • Carterfone decision allowed customer premise equipment in 1968 • MCI Execunet (long distance) decision in 1976. Company originally applied for authority in 1963 • Bell System broken up as of 1984 into seven regional operating companies and AT&T long distance • 1996 Federal Telecom Act and state laws allowed local competition and set up current universal service requirements
What was the impact? • Number of traditional landline phones cut almost in half since 2000 – Residential subscribers dropped almost twothirds • 2000: 190 million (145 million residential) • 2011: 107 million (less than half residential) • Increase in cordless phones which are unreliable • Interconnect Vo. IP phones increase – 2008: 22 million – 2011: 37 million (31 million residential) • Vo. IP subscribers continue to increase
When I was your age we didn’t play video games or take photos or locate things – we just did one thing and we took our sweet time doing it
Continued Wireless Growth • More than one wireless phone person – 326 million at end of 2012 vs. 141 million ten years earlier – U. S. population 316 million in May 2013 • Lifeline program (vast majority of phones being provided to low income wireless); questions of need vs. abuse • Center for Disease Control report (December 2012) – 52 percent of adults in poverty, 42 percent in near poverty in wireless only homes – 60 percent between ages 25 -29 and 55 percent between 30 -34 wireless only vs. 26 percent 45 -64 and 10. 5 percent 65 or older
Changes in the States • 21 states have high cost funds separate from federal universal service fund • Some states phasing them down in part because of lifeline program • More than half the states have deregulated telecom, especially wireless and VOIP • Once deregulated legislatively, hard to go back
2013 State Legislative Update
Lots of Questions and Concerns • What is definition of basic service today? • Are we talking about voice or video? • How do we define broadband? – Already, 4 mbps down and 1 mbps up in Connect America Plan outdated – NTIA May 13 report – Speeds increasing over time for DSL, wireless, fiber and satellite – Schools and libraries access being updated – Should homes in rural areas receive same speeds? • If so, how? – How to define Lifeline? – Emergency service: Derecho, Hurricane Sandy, Western fires • Reason why Colorado bills failed
Bottom Line – Possible Another Way • Who will pay and for what? – Consumers – Providers • Issue of Competition vs. Monopolization – Among Technologies – Considering Satellite • Government Oversight and Public Interest – Emergency service, however defined – Complaint and service quality jurisdiction, regardless of technology – Rate regulation in areas with no competition – Vo. IP and Broadband where Telecom Service
Is this the ultimate solution?
- Slides: 15