It's The Beginning Of The End For PSTN

Why should AT&T's exit from consumer local and long-distance come as a surprise? The business and regulatory cases for staying in a PSTN-based endeavor are officially outdated.

July 23, 2004

1 Min Read
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Ok. It may be a bit premature to roll out the dirge music for the hardy, faithful Public Switched Telephone Network (PSTN). But I do think it is safe to say that the news this week from AT&T (along with announcements from Verizon and Sprint Canada) marks the official beginning of the end of this venerable stalwart of the telecom infrastructure. Mainstream carriers not only are announcing intentions to embrace new VoIP technologies (not long ago the exclusive province of entrepreneurial upstarts), they are practically stumbling over each other in a race to roll out IP-based network infrastructures that are less expensive to build, deploy and maintain.

If the quality of these services can approximate that of the PSTN dial-tone, then everybody theoretically wins: carriers reduce their costs, cut their prices to consumers with no reduction in the user experience (heck, it may improve if users can actually do more things on the same network). As an added bonus service providers reap higher profits. The projected balance sheet should serve as a soothing salve for accountants that would like to see legacy investments in old switching and routing technology fully amortized.

And that is just the business and technical case for leaving the old PSTN behind and moving to a next generation network.

Given the direction both technology and customers are taking, a company like AT&T would have to be sentimental, stupid or insane to stay in the regulated PSTN environment. Who wants to be in a business where you are told what to charge, who to serve and how to behave with competitors?

Perhaps the better long-term question, however, is: How long will next-generation networks like VoIP remain outside of the regulatory and legislative spot light?

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