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Summary:

[qi:086] If you want to hear what the death of copper phone lines sounds like, don’t just listen to AT&T CEO Randall Stephenson or Verizon Communications CEO Ivan Seidenberg talk about their landline losses over the last few quarters, come over to my house and lift the receiver on my landline phone. You’ll hear the crackle of static that grossly interferes with your ability to enjoy a call.

[qi:086] If you want to hear what the death of copper phone lines sounds like, don’t just listen to AT&T CEO Randall Stephenson or Verizon Communications CEO Ivan Seidenberg talk about their landline losses over the last few quarters, come over to my house and lift the receiver on my landline phone. You’ll hear the crackle of static that grossly interferes with your ability to enjoy a call.

No matter how many times an AT&T technician comes out to the house, the static always comes back. The technicians can replace sections of the aging wire, fixing the static for a few weeks, but like rust or wrinkles, it always returns. Given that I pay $16 per month for the minimum plan to keep a landline in the house, and that several industry analysts have estimated that it costs Ma Bell between $100 and $200 each time a technician visits my home, this is not a winning equation for the phone company.

The combination of expensive maintenance on an aging network and users who are trending toward the cheapest copper-based packages available showcase some of the problems ahead for the old-school copper telecommunications infrastructure just as much as AT&T’s loss of 4.2 million 1.6 million landlines in the first quarter does. Others have pointed out that the economics of the eroding landline business will mean that we’ll see more problems as carriers weigh the costs of fixing up their old lines with the revenue those lines bring in. Larry Vanston, president of research firm Technology Futures Inc., says AT&T, Verizon and Qwest provided service to 109 million (primarily copper) access lines at a cost of $5.7 billion in 2007 so the average cost of maintaining the copper network is at least $52 per access line per year. This number gets larger as the number of access lines falls. For example, it was $43 per access line in 2003.

Such problems will include longer wait times for repairs, cheaply repaired lines and even carriers dumping some of their wireline assets. Forward-thinking carriers in other parts of the world are addressing this problem by pushing WiMAX to subscribers. AT&T has pondered that in rural areas of the U.S., but so far hasn’t pulled the trigger.

The demise of the copper landline is becoming less of a business issue for the big carriers, which have offset landline losses with profits from wireless services and growth from fiber-based offerings, but smaller carriers such as Fairpoint Communications and Windstream will have to figure out how to serve those who don’t want to abandon cheap copper without the benefit of hefty wireless growth. Meanwhile, I’ve given AT&T a pass on my static-filled line, and have stopped calling to get it repaired. I use my mobile for all my calls anyway.

puc1

A micro view on the macro problem of landline loss, using data from the Texas PUC.

  1. I had this problem with a noisey line. The technician traced and the tested the line all the way back to the exchange. He found no problems, but I still found it noisey. After more calls and more visits, one technician finally traced the problem to the telephone wall socket. 5 minutes later and a new wall socket, the line was quite.

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  2. Your 4.2M number is off. If you do the math (it’s a bit complicated now because T includes U-verse Voice in their “Retail Consumer Voice Connections” statistic, so you have to estimate the number of U-verse Voice connections and subtract this out), AT&T had about 55.29M POTS lines at the end of 2008 and 53.99M at the end of 1Q09, for a net decrease of 1.3M.

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    1. Stacey Higginbotham Wednesday, April 29, 2009

      The number is high for two reasons, both a result of me being wrong. One because it was losses in the last year, rather than 3 months. Two because it does included U-Verse voice. I changed the story to reflect the correct number of lost land lines for the quarter. The data is found buried in a footnote in supplemental data provided with the earnings. The total POTS lines at the end of Q1 were 54M. There were at 55.6M at the close of the year.

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  3. I may not be able to see Russia from my house, but I can sure see corn fields. I live (and work) across the street from city limits; fairly far from the CO, and I’ve known my share of noisy phone service. Mostly brought on by the fact that there is at least 25,000 feet of copper wire between myself and the CO, and who knows how many splices, etc.

    However, as Richard indicated, that wasn’t my only problem. The way the wiring in my house was run, the way most wiring in most houses is run – daisy chained from room to room, it was acting like an antenna and was also spliced who knows how many times more. I gave up on it.

    I purchased a new phone that has a corded handset (for the times with no power) and can support 10 digit wireless handsets as well. Since the predominant wireless network technology in my house is 2.4GHz, as is likely the case with my neighbors, I chose a 5.8 GHz phone system to avoid wireless interference. The demarcation point (network interface) between the phone company wiring and my house just happens to be 20 feet from my desk. I disconnected the old wiring where it connects to the phone company, and ran a single new line using some quality cable I had. I placed a cheap Radio Shack RFI filter in line, and presto a much much better connection.

    A side bonus, my wireless handsets all have headset jacks, and I use them for most business calls. I can stretch my legs while I talk on the phone, and can have my hands free to type. It is also much clearer than a speaker phone for everyone involved.

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    1. Ick, that should have been “10 digital wireless handsets”.

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  4. Interesting post, thanks for all the information. Very good post.

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  5. Still Connected Wednesday, April 29, 2009

    For the average Joe, having his own private cellphone with “flat rate” calling at $45/month trumps sharing a ball-and-chain landline at home with Mom, Dad, or the Wife and Kids. I’m not sure this is a good thing, but it is a preference. I certainly don’t get how anyone puts up with the poor voice quality and intermittent signal one has on so-called “digital” services, and how we relate to each other through voicemail tag or 100-character snippets. But then, my father always ragged about how we should write handwritten letters rather than use the black rotary dial phone… after all, it cost $2.75 for a 3-minute call to New York.

    Telco can keep landline customers by several means. First, offer a truly flat-rate POTS line – no taxes, no surcharges, no nothing. Say, between $25 and $30/month, including wire maintenance. Heck, they could even rent quality phones for $5/month more. Implement ISDN BRI, so we don’t have static, and we can hookup low speed data connections (utility meters, alarms, baby monitor) without relying on a wacky metered internet connection.

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    1. No taxes? Good luck on that one!

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  6. A couple more thoughts on this. There are probably 2 reasons I even bother to keep a land line around.
    1) I work from home, and for as much time as a spend on the phone, neither cellular or VoIP cuts it when it comes to the quality and clarity of POTS (see my post above about how I dealt with the static).
    2) e911 doesn’t cut it in my mind. Even if I didn’t work from home, I’d probably still keep a barebones copper line for quick local calls and so the babysitter or whomever could call 911.

    Obviously, not everyone feels the same. I’ve got to wonder the age demographics of people who give up their land lines.

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  7. I started having cracke noises in my buenos aires landline when I added DSL.

    Was surprised about how complicated is to combine a landline and dsl. first they needed to “digitalize the line” at the switch, then add all kind of filter boxes around the house…

    No wander cable internet grows like crazy

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  8. Wonder how many lost jobs this represents vs gains from wireless. Anybody know? Profits to the carriers = fantastic

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    1. I’m an AT&T wireless employee and I can tell you their profits are through the roof, and us wireless employees don’t enjoy anything even remotely close to the same contract as the failing wire line departments. We are driving profits by being treated like indentured servants and slaves.

      Hiring freezes,attempts to hire cheap,3rd party labor, and a complete disregard for the health and well being of it’s employees is what’s driving AT&T to the top.

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      1. Ahhhh….. the days when I was a Cingular Wireless employee with my CUID (user id) A little before the AT&T name switch. Sounds about right….. top end pay Tulsa for CSR at the wireline side was hmm roughly 24.00 but ohhhh the wireless division driving all the revenues that the wireline business was loosing ohhhh maybe 11. I completel agree with yah there brah.

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  9. [...] of lines, according to Larry Vanston, president of research firm Technology Futures, as quoted on GigaOm. There are more reports, such as this one about Verizon, that the telcos are skimping on [...]

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