The Real Value of Long Wires
Big Telecom is very aware of the basic question of their continued existence and have chosen an appropriate direction which concentrates on their true value, all those wires, fiber optic pipes, and microwave towers. Rather than using those hugely expensive resources on voice calls, which can be transported on just one third of one percent of a 20 megabit broadband connection with the exact same or better sound quality, they are going to use those wires to provide Internet connections. But they are not going to do it without leveraging their incumbent market position and reputation for as much revenue as possible during the transition. Additionally, the industry has a longstanding entanglement with the government which can be used to taper in the devaluation of simple phone calling while the bureaucratic establishments adjusts to the new environment.
The proof of this assertion is in AT&T’s petition to the Federal Telecommunications Commission requesting they be allowed to decommission their old phone network and only keep their “packet switched” network, the network they use to provide Internet service. The FCC reviewed their request and has agreed the old network is an unneeded burden, as AT&T suggested. This new and improved phone service, marketed under the brand UVerse™, is simply AT&T selling voice-over-IP (VoIP) on their own Internet connections. This change also relates to the appearance of “digital television programming” from AT&T (suddenly sounding more and more like a cable company), delivered over that same Internet connection. Despite both the deep cuts in their expense of providing the service and the additional revenue of effectively selling their “packet switched” network three times to the same consumer, their prices have not reflected a proportional change.
Finally, further proof from the FCC comes in the form of a recent request for telecommunications carriers to experiment with using IP addresses (the station identifiers of every connected device on the Internet) instead of phone numbers to connect calls. Those phone numbers are the only thing that makes a phone company valuable because everyone with an Internet connection can already make a “direct IP call” using the IP address.
- “The IP Transition: Starting Now” from FCC.GOV
- “PDF: AT&T Petition to the FCC” from AT&T
- “FCC Makes It Easier for Telcos to Offer TV Services” from Information Week
- “Can the FCC Handle Phone Service over the Internet?” from Communications Law
- “VoIP Per Call Bandwidth Consumption” from Cisco
- “US Phone Companies to Explore Replacing All Phone Numbers With IP Addresses” from Engadget