Author: Kevin Donoghue, CEO - Telesoft
In the past three years, thirteen states have removed regulations and laws that require telephone companies to provide traditional land lines to rural areas. New rules allow carriers to use wireless, broadband Internet, and other alternative technologies to provide basic service.
Concern for repealing these laws is highest in rural markets where there are dead zones for mobile service, and there are no cable companies willing to spend the money to run lines out to desolate areas. Policy makers have to develop alternative plans because phone companies can no longer afford the high cost of maintaining legacy phone networks in rural areas.
Maine will phase out regulations in seven cities where there is competition among providers. It will add more areas until it reaches 22 communities no longer governed by these regulations. Ohio, Michigan and Kentucky have also passed similar laws waiving previous requirements that telephone companies provide traditional phone service in rural areas. California will begin considering similar legislation.
This will impact enterprises in several ways. First, the moves to end basic phone service mandates demonstrate that carriers are no longer willing to subsidize operations that lose money. Second, as wireless services spread to more areas of the country, it could turn out that Universal Service Fund (USF) taxes which are used to subsidize service to rural and poor communities, can be reduced. It could turn out that providing wireless services are less costly than the cost of maintaining legacy phone networks in rural areas.
A third area for enterprises to consider is the shift from landlines and desktop phones to wireless services. As wireless services improve, enterprises may find it less costly to pay all or part of employees’ monthly cellphone bill. This eliminates costs for maintaining networks, wiring, and possibly rewiring when offices are moved. As example, Ford purchased 8,000 wireless phones for staff at its Detroit headquarters and cut the cord on its landlines.
In the U.S. we are moving closer to the day when landline phone service goes from an endangered species to being extinct. This will bring new efficiencies to telecom service providers and in turn, lower costs will be passed to enterprises for services that are more important to enterprises and consumers.Tags: fixed and mobile telecom expense management