Sept/Oct 2011

POTS is going away. “Plain old telephone service,” that is.

The phone networks that have provided reliable voice service for Americans for 100 years will be phased out within the next five to seven years—if the big U.S. telcos get their way. In 2009, Verizon announced plans to phase out POTS by 2016, and later that year AT&T proposed a POTS “sunset” date of 2014 to the FCC. More recently, the big carriers have pointed to conflicts between the requirement that they maintain their POTS networks and America’s National Broadband Plan, claiming funds spent on POTS reduce capital available to expand fiber-optic broadband networks. This is old news.

Should you care? Already, about 25% of American households have dropped landlines in favor of mobile phones. AT&T reportedly sheds more than 8 million landlines a year. At this rate, POTS may disappear through attrition.

Or will it? Most of the debate about shutting down POTS and the PSTN (public switched telephone network) has focused on impacts to people and communities. One thorny issue is how skyrocketing per-user costs will be recovered as the population on POTS networks drops below critical mass. In January, AT&T hiked rates for Illinois POTS customers by 27-63%. Customers can skirt the increase by picking a state-mandated “customer choice plan,” but only for two years. Another sticky question is who will provide “carrier of last resort” (COLR) voice service to remote and rural areas, and how those obligations will be funded. Handled poorly, eliminating POTS could create a “voice divide” to go along with the “digital divide.”

What’s not being discussed very much is how the POTS shut-down will impact connected machines. Nobody has a firm count, but the number of machines using landline phones is estimated to be about the same number of U.S. households that had landline service in 2008: 125 million. These lines connect all kinds of devices that are important for safety, commerce, and even our political liberties, such as traffic-signal control boxes, POS (point-of-sale) terminals, ATMs, election machines, and lottery terminals. POTS is used for elevator emergency phones. Most neighborhood electrical-transformer stations are monitored via five or more POTS lines, as are millions of security-alarm panels, commercial HVAC installations, sensor networks, and other stuff. POTS is everywhere.

Upgrading all of these connections to another communication method, likely wireless, is a huge task … one that American industry doesn’t seem keen to begin. If the sunsets of the analog mobile phone or AMPS and CDPD (cellular data packet data networks) are any indication, POTS users are likely to wait until the last minute to deal with the matter. Today’s constrained capital environment surely makes things worse.

But there’s more to gain from upgrading POTS lines than simply maintaining a connection. Security improves immediately, since a denial of service attack on a POTS circuit is easily launched using an inexpensive robodialer. Heavy POTS users will have to inventory and upgrade all of their connections—something industry insiders say should be eye-opening because some firms have so many connections that “they don’t even know what all of them are.”

Device manufacturers have jumped into the fray with modems that connect landline equipment to Wi-Fi, cellular, and NFC (near-field communication) networks. The Cobra Electronics PhoneLynx, a 2011 CES Innovations Award winner, uses one or two cellular phones to connect to landline phone equipment that’s already in a home.

The mobile phones are paired via Bluetooth, then a landline phone is plugged into the back of the unit. A wired or wireless landline phone can be used with the PhoneLynx in the “usual way,” with talk time charged to the cellphone’s service plan. The landline phones even emit a dial tone when they are picked up or switched on. No need for retraining, except learning a simple set up. Active landline service is not required, but users may need to upgrade their cellular service to account for any additional usage.

For enterprises, Encore Networks’ Bandit II is an “industrially hardened or commercial grade cyber security appliance” that provides security enhanced, multi-network connectivity for legacy POTS equipment. Bandit II supports connections to the Internet, WANs (wide-area networks), LANs (local-area networks), and commercial cellular networks. The device improves the functionality and security of legacy equipment by layering in VPN (virtual private network), firewall, and encryption, plus automatic fail-over between communication networks in the event of an outage.

Even with all of the options available to convert existing POTS equipment to other communication networks, some doubt whether the PSTN will ever completely go away. This is because the PSTN is the core communication network that all telcos—landline, wireless, big, small, domestic, global—use to interconnect and carry calls between their networks. New interconnection methods and equipment need to be developed and deployed before the PSTN can be shut down. Regional telcos, which have been buying POTS networks from the big carriers and converting them to DSL (digital subscriber lines), connect those networks to the Internet using the PSTN so they also need to develop new interconnection methods.

Globally, every POTS network operator has to deal with the same problems as the U.S. carriers and they will not all discontinue POTS at the same time, if ever. Once the PSTN is phased out in the U.S., international PSTN networks will have to interconnect with U.S. VoIP (voice-over-Internet protocol) networks, requiring investment in converters on one end or the other and possibly changing international inter-carrier charging structures.

The speed of the POTS-to-broadband conversion will also be metered by the cost to convert, which telcos will try to push onto ratepayers through tariff increases. Public Utility Commissions, which approve telephone rates in the U.S., may inadvertently slow the pace of conversion by limiting how capital costs can be recovered through rate increases.

Given all of these challenges, I believe the phase-out of POTS and the PSTN will take a lot longer than Verizon or AT&T want. It will take a decade, or more, to convert the majority of landline connections and work out new interconnection protocols and regulatory structures, particularly how universal service requirements will be satisfied.

It could then take another decade after that to completely kill off POTS—if it ever happens. POTS is dead. Long Live POTS!

Laurie Lamberth cut her landline connection in 2003. Keep up with her thoughts about the global wireless industry or learn about her strategic business development and marketing consultancy at

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