Why should companies be thinking about decommissioning their copper wire-based networks?
The Federal Communications Commission (FCC) issued order 19-72A1, which officially grants U.S. telecommunication companies permission to decommission outdated copper plain old telephone services (POTS) lines. Some 35 million lines exist today. Every enterprise has POTS lines or copper wire services in their networks. They are typically used for local telephone calls, fax machines, fire alarms, elevators, security, etc. And they are often overlooked by the telecom team in these days of enterprise network transformation, but that can be a costly omission if not properly addressed.
After August 2022, carriers will no longer be required to support these services, including regulated pricing currently in place today. Carriers are quickly moving to address these services when in their interest, but that doesn’t always align with the enterprise during a period of network transformation and technology migration.
What does FCC Order 19-72A1 say?
Section I.3 of this order states the following: “Given the sweeping changes in the communications marketplace since the passage of the 1996 Act, including the increasing migration of consumers of all sorts and sizes away from TDM technology, copper loops, and local telephone service toward newer, any-distance voice services over next-generation wireline and wireless networks and the wide range of competitors offering facilities-based voice service alongside over-the-top Voice over Internet Protocol (VoIP) services, we find that the public interest is no longer served by maintaining these legacy regulatory obligations and their associated costs. Rather than a foothold for new entrants into the marketplace, they have become a vice, trapping incumbent LECs into preserving outdated technologies and services at the cost of a slower transition to next-generation networks and services that benefit American consumers and businesses.”
What is the risk of doing nothing?
Enterprises are receiving communications from carriers, pushing them to migrate to newer digital applications. These new applications are often aligned with their desired direction for a specific client, but not necessarily always in the client’s best interest. Failure to address your current POTS landscape may result in rate increases on POTS lines of 75% to 150%, not to mention billing for services no longer effectively in use today – or the loss of failing to leverage the best available technology.
There is a lot of confusion on the impact for companies and their options to remedy it, including a wide variety of pricing and contract treatments, unnecessary inventory and the ability to capitalize on a wealth of emerging technologies and providers.
How should I prepare for the decommissioning?
- Identify and verify your current POTS services with all U.S. carriers.
- Conduct a detailed invoice and audit to eliminate all non-utilized services to ensure effective transition of required active lines.
- Determine the depth to which these POTS services impact your overall telecommunications strategy, both from a provider and contracting perspective and as part of your overall network transformation strategy.
- Separate lines by their critical applications to determine application requirements and alternative solutions.
- Negotiate rate stabilization plans where services cannot be migrated to new technology and consider their overall impact to current networking agreements.
- Select the best solution, provider and contracting vehicle available for your business needs.
- Find support in the migration of lines to new technology and providers
Do I need a third-party advisor to help with this initiative?
As an independent voice for the client, an advisor with network expertise will have access to the spread of technology and solution providers that are best suited to support the client’s requirements in this unusual situation. Services including audit, sourcing and access to the indirect channel can significantly benefit the client here.
Is there a specific provider better than another for my specific situation? Or should I just keep my current provider?
While your current provider may be suitable and may have an acceptable solution, a POTS initiative gives you an opportunity to explore technology alternatives to plain old telephone services, not to mention several provider options and fee structures, as well as cost optimization benefits.
Why should I make this issue a priority?
Enterprises will have better leverage if they address this issue prior to the Aug. 2, which is the FCC deadline. Addressing the matter early will enable you to compare solutions and find the best fit for your organization. Carriers will also be more favorable in negotiating stabilized rates either with an incumbent or new carriers.
How much will this cost my organization?
Most solutions will have no upfront fees. ISG has developed gainshare pricing options that are based on results. This allows enterprises to pay only for savings they achieve from the initiative.
ISG Network Advisory and our long-standing audit and select technology practices can help enterprises rationalize their POTS environment and develop a quick and effective strategic plan to leverage new providers, technology and favorable shared risk fee structures. Contact us to find out how we can help.
About the authors
Will Saybe came to ISG (Alsbridge) in 2006 with more than eight years of experience in telecommunications audit arena. Currently, Will has over eighteen years’ experience in providing short term cost out solutions to clients. He has worked with some of the largest clients in the industry and secured well over $50M in refunds for his clients over the course of his career. His focus on delivering a favorable ROI to the client projects has increased client satisfaction and repeat business for the organization.
Chris Gruenewald is a Director on the ISG Network Advisory Services team.