The Beginning of the End (of Copper)

by Dave Michels

More controversy from Wisconsin and Governor Scott Walker. Rather than unions though, this time it is telecom cuts. Gov. Walker signed into law today a bill approved by the legislature that removes many telecom regulations, a change sought for years by utilities but decried by others as a bad move.

The bill reduces requirements associated with maintenance of the copper landline infrastructure – a huge costly infrastructure that sets the US apart from many countries. This copper network has (or had) extraordinary value – a direct result of the original telecom policy of universal service – ensuring reasonably priced telecom for all. 

The problem of course is end of life technology. Unfortunately, a network designed for analog voice just doesn’t resonate connectivity like it did 50 years ago. At what point do you shoot the horse? At this point, according to Wisconsin law makers – in what will probably become a national trend.

For many urbanites, it isn’t even a noteworthy debate. In the city, 4G cell phones gets faster speeds than many broadband Internet providers offer. At my home, the traditional copper DSL service has a maximum download speed of 1.5 Mbps.

The carriers want to divert funds associated with phone pole services to cell tower services, among other things. Many Internet services, such as Skype, completely bypass fee collections associated with copper management – creating an unfair carrier playing field. VoIP and wireless has its own set of infrastructure requirements and priorities that don’t involve copper lines.

The defenders of copper argue protection for rural consumers, universal service, and the fact that wireless and broadband services often are not available past city limits. Unfortunately, it has become a bit of left vs. right, rather than reason vs. balance.

On the federal level, the FCC wants to reallocate the universal service fees collected by most carriers. Over the next decade, the FCC wants those funds to pay for high-speed Internet access instead of the traditional voice services that it currently finances. The proposal would create a Connect America fund inside the Universal Service program to subsidize broadband, and a Mobility Fund to expand the reach of wireless networks.

But the Wisconsin law isn’t about reallocation, it actually lowers the rates telephone companies will charge. It also reduces PUC oversight of landline phone service (see why it’s a party issue?). Of course, the PUC’s role has been decreasing naturally as users move to various national VoIP and wireless services. But this law actually precludes the PUC from regulating rates in areas with little or no competition.

No PUC, No Copper  (The Hangover 3)

This is effectively a Bizarro world of telecom, sacred cows of just a few decades ago are being turned into hamburger. A lot of it feels inherently wrong, but defending copper is increasingly difficult. It’s unfortunate that there is so little (any?) R&D; associated with figuring out a purpose for this incredible infrastructure. Think about it, virtually every home in America is connected to each other – seems a shame to let it go.

Read more:
Walker to sign telecom bill | The Business Journal
Walker signs bill relaxing rules on land phone lines
FCC officials outline Proposed Universal Service Reforms