Wireless and VoIP Services as Carrier of Last Resort?

The shift continues for the traditional telecommunications companies away from copper based voice and DSL data services to wireless and fiber. One of the road blocks that appears to be loosening are the  Carrier of Last Resort (COLR) rules for carriers.

COLR rules are currently set at the state level (not the Federal Communications Commission) and regulate that every American has access to telephones service along with other utilities like electricity and water. A number of states have either passed legislation or are considering legislation that would end traditional landline rules and allow these services to be replaced by wireless (cell) or Voice over Internet Protocol (VoIP) services. Bills have emerged in Mississippi, Kentucky, New Jersey and California. Ohio's Senate Bill 271 is a good example of legislation currently being reviewed by lawmakers to cut traditional landline services. 

Opponents to these changes argue landline elimination could increase phone bills, reduce quality of service and impact 911 service. AARP Ohio State Director Bill Sundenmeyer is quoted in a recent post at Community Broadband Networks saying:

... besides preserving social contact, land-line phones are needed to protect seniors' health and safety. For instance, some seniors use the phone line to transmit routine health information from equipment in their home to their doctor's office.They can make an evaluation of a person's heart and how's it working, of their lungs, etc. That information would be very difficult to transmit over a cell phone.

There's more. Even though the FCC has stayed out of COLR regulations, leaving them to individual states, AT&T submitted a letter to the FCC back in August asking the FCC to effectively reclassify the public switched telephone network as an "information service", effectively removing all PSTN regulations and obligations. What does this mean? I think Bruce Kushnick describes it pretty well over at the Huff Post Tech Blog:

This means that almost all of the remaining wires, networks or even the obligation to offer services over those wires and networks are all removed -- as much of this infrastructure is classified as "telecommunications". The Public Switched Telephone Networks, the utility, would suddenly be reclassified as an information service. Sayonara any telco rules, regulations and oh yes, your rights. Your service breaks... tough. Prices go up and there's no direct competition -- too bad. Networks weren't upgraded -- so what. Net Neutrality? Neutered.

I'm not sure where you live but I'm in a relatively rural area of a fairly populated state. I've only got one wireless provider option at my home unless I climb up to the very peak of my roof where I can usually catch one bar of another provider. After the 2011 Halloween snowstorm cell service was out for almost a week at my home while landline service did not go down. 

Wireless service is great when it works. Wireless as carrier of last resort - someday yes but not just yet. AT&T has opened a window and the FCC now has an opportunity to step up and put a logical transitional process in place. 

AT&T Acquiring T-Mobile USA from Deutsche Telekom

Today, AT&T and Deutsche Telekom announced that they have entered into a definitive agreement under which AT&T will acquire T-Mobile USA from Deutsche Telekom in a cash-and-stock transaction currently valued at approximately $39 billion. The agreement has been approved by the Boards of Directors of both companies. Deutsche Telekom will have an ownership interest in AT&T of approximately 8 percent and a Deutsche Telekom representative will join the AT&T Board of Directors.

The acquisition is subject to regulatory approvals, a reverse breakup fee in certain circumstances, and other customary regulatory and other closing conditions. The transaction is expected to close in approximately 12 months and the government needs to approve the deal.

This is significant for a number of reasons listed in the announcement. Here's a couple that I believe are most significant:

• Addresses wireless spectrum challenges facing AT&T, T-Mobile USA, their customers, and U.S. policymakers. AT&T’s mobile data traffic grew 8,000 percent over the past four years and by 2015 it is expected to be eight to 10 times what it was in 2010. Put another way, all of the mobile traffic volume AT&T carried during 2010 is estimated to be carried in just the first six to seven weeks of 2015. 

• AT&T commits to a significant expansion of robust 4G LTE (Long Term Evolution) deployment to 95 percent of the U.S. population to reach an additional 46.5 million Americans beyond current plans – including rural communities and small towns. This helps achieve the Federal Communications Commission (FCC) and President Obama’s goals to connect “every part of America to the digital age.” T-Mobile USA does not have a clear path to delivering LTE.

Spectrum and coverage - both critical as bandwidths and connected devices continue to grow at incredible rates.

Just wondering....... will Verizon Wireless now make a bid for Sprint/Nextel?