Phone technology undergoing changes

Pasadena Star News
By: Cynthia Kurtz
Posted 6/12/2013  

How often do you answer your phone? Not your cell phone, your landline? Do you even have a landline? 

The way the world communicates is rapidly changing. One out of every three American homes is wireless. One-third use voice over internet protocol (VoIP) which transmits the communication via the internet. That leaves just a third of us who still have a traditional landline that uses the public switch telephone network (PSTN) sometimes referred to as plain old telephone service (POTS). Just 10 years ago, 70 percent of household had POTS.

You may be thinking these wireless or VoIP users are mostly young, wealthy, urban dwellers. That may have been true once but today 47 percent of low income adults and 83 percent of Lifeline subscribers live in wireless households. Thirty-one percent of Americans between the ages of 55 and 64 own smart phones.

Wireless phone technologies are having enormous impacts on the way we do business as well. Twenty-five years ago the telephone was used to order products and schedule appointments. Today smart phones allow businesses to manage systems remotely, share data, and access information from anywhere. 

Wireless VoIP service offers cost advantages over cellular service. If you are connected to the Wi-Fi network for Web service and emails, the additional cost for phone service is minimal. Future generations of cells phones are expected to include built in Wi-Fi so your phone can switch automatically between cellular and VoIP even during the same call reducing those nasty “dead zones.”

Industry experts predict that demand for POTS will all but disappear as hybrid phones with the capability of operating off cellular or VoIP provide better reliability at lower costs.

All this sounds great for the consumer and is clearly the direction most consumers are already headed but as always there are a few issues that have to be resolved.

Communication companies need to make significant investments to their IP technology systems. For example, AT&T has invested $96 billion in system improvements since 2007. They plan to invest another $66 billion over the next three years - $14 billion of that to expand and upgrade wireless VoIP networks. They say even this huge investment isn’t enough to keep up with customer demand. 

Current regulations require telephone companies to provide and invest in both PSTN and VoIP networks. By having to offer dual systems the dollars available for investing in the newer technologies are reduced and the ability to make high speed internet available to everyone is slowed.

Telephone service is essential especially for 911 and other emergency calls. PSTN needs to be maintained in areas until a reliable, affordable alternative is available. But should we require that PSTN be maintained when most consumers are choosing an alternative? Or do regulations that encourage innovation and investments in new technologies provide a better path for keeping us competitive in a global economy?