Industry News

The State of Business Telecom in 3 Maps

by Sasha Viasasha
July 21, 2017

Business telecom in the US is undergoing a massive restructuring on a scale that is both unprecedented and incomparable.

At the same time, evolving telecom technology is putting society through some radical changes. The result is a volatile legal/regulatory environment on the state and federal level that hasn't been seen at least since the Communications Act of 1934. The following 3 maps are a good indication of what's happening and what is most likely to happen next.

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States cut the cord

On July 1, Illinois became the 19th member to join this group when both houses of the the state legislature overturned the Governor's veto. The updated Telecom Act allows AT&T to disconnect the last 1.2 million landline customers, both businesses and residential accounts, up and down the state. AT&T will need FCC approval but that seems likely.

2015 FCC ruling allows discontinuation

The FCC ruled in 2015 that carriers could discontinue service as long as they notify customers and keep the service operating temporarily – 31 days for smaller providers and 60 days for larger providers. The end of land lines is closely tied to the end of a concept in utility regulation known as the Carrier of Last Resort (COLR). COLR requirements are fading away as seen as the map below. 

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This map comes from the National Regulatory Research Institute (NRRI) in their report Telecommunications COLR: Necessity or Anachronism? The map compares where  where state COLR requirements are either stated explicitly, implied or strictly limited. COLRs were meant to create a safety net for customers when a telecom provider leaves a competitive market or can't continue service.

Elimination of COLR

In 2016, Maine became the first state to create a legal pathway to the elimination of COLR, which other states are already reviewing. Over the past few years, 25 states have either eliminated or revised COLR requirements. This is in line with the general trend away from telecom regulation, which can be seen more clearly below. 

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NRRI reported that commissions in 41 out of 50 states have now either reduced or eliminated their oversight of wireline telecom. Many states are now looking to replicate a study from Colorado that found "IP-enabled E911 service does not result in gaps in service." If that proves true, that removes the last justification for landlines -- that they are necessary for reliable emergency services. 

Call quality and cost 

What these reports do not discuss is the scope and the level of new expenses businesses will face as landlines are no longer repaired or serviced. The non-profit Public Knowledge estimated that around 50% of US businesses, especially the smallest ones and those in rural areas, are still relying on DSL and land lines. Business telecom is transitioning to IP delivery, and its unsettling everything from call quality to cost. 

They cautioned that, “Transitions to new networks will lead to unanticipated expenses for new equipment and services, such as fax machine replacements, security systems, credit card processors, and Internet services that may be more expensive or subject to data caps, which may also limit their ability to provide free Wi-Fi.”

The smartphone wins

The many-decades shift to a decentralized communication structure has created  new opportunities but also uncertainty. VoIP technology is growing in every direction, but in many instances, it is not well positioned to service enterprise mobility. However it all shakes out, the smartphone will dominate the future, whether it is riding a 5G cellular network or using internet protocol.

In upcoming blogs, we'll look closer at the financial impacts of the changing face of business telecom and how its likely to impact the way information is delivered. Want more information about changes in telcom as they happen?  Follow these 10 telecom thought leaders and keep well ahead of the tumultuous telecom landscape. 

Shopping for business communication solutions in such a volatile world isn't easy. Luckily, there are plenty of low-cost, scalable solutions for small businesses that allow you to benefit from advances in telecom without taking huge risks or investing in obsolete technology. Software and application enabled systems, such as Spoke Phone, can bring a fragmented world back together, and build a bridge to a better, more connected future.

Selecting and Implementing a Business Phone System
Selecting and Implementing a Business Phone System