Hotel CTOs Beware – Copper Sunset is Here
“PSTN is headed toward an inevitable sunset,” said The Federal Communication (FCC) in August 2019 in describing the Public Switched Telephone Network (PSTN), also known as analog copper-wire phone lines or plain old telephone service (POTS).
POTS is reaching retirement age after a very long run, which started in March 1876 with Alexander Graham Bell. After almost 150 years, it’s no surprise that other technologies – primarily mobile networks and voice over internal protocol (VoIP) phone service – have eliminated the need for POTS infrastructure.
The FCC tightly regulated POTS service through the 1990s, when copper wires were the only way to make phone calls and the internet was still in its infancy. Now, as the quote from the FCC’s 2019 order (FCC Grants Relief from Outdated, Burdensome Phone Industry Regulations) makes clear, the agency no longer sees any reason to require carriers to continue POTS service.
“Policies that encourage reliance on outmoded legacy services, by carriers and customers alike, serve no beneficial public interest purpose,” the FCC continued. In other words, if your business still has POTS lines, the government’s position is essentially that you are on your own in dealing with the situation.
CTOs in the hotel industry need to be aware as Copper Sunset affects so many things in hotels. These include fire alarm panels, elevator phones, fax machines, public safety phones, building access systems and more.
What Exactly is Happening?
Three things are happening simultaneously.
- POTS Lines are Going Away
FCC data shows the number of U.S. POTS lines plummeted from 122 million in 2010 to 41 million in 2019. If copper-wire lines continue to be shut down at the current rate, as shown in the chart below, there will be few, or none left by 2026.
2. POTS Lines are Becoming More Expensive
The FCC and state regulators have largely removed price caps on POTS lines. Carriers are taking advantage of this to significantly increase monthly rates even as fees for other telecom services – i.e., mobile phones – are being driven down by intense competition. The U.S. Bureau of Labor Statistics says the cost of POTS service has risen 36% from 2010 to 2021 (also shown in the chart) and could be up 75% in 2026 if current trends continue. POTS lines for business now cost $80 to $120 a month per line. VoIP services for businesses, in contrast, offer far more advanced services at a fraction of the cost. Some starting at just $19.95 per month per line.
3. Quality of Service for POTS Lines is Declining
In theory, the increasing cost of POTS lines is necessary because carriers have fewer and fewer customers to cover the cost of maintaining copper-wire infrastructure, such as phone poles and switching centers.
The Challenge for Business
These three trends are creating an obvious squeeze on the millions of businesses that still have POTS lines. The low-hanging fruit in the transition from POTS to VoIP has already been plucked. Larger businesses have almost entirely transitioned away from copper-wire phone lines and small businesses are making the shift as well.
Why are any businesses at all still using POTS? Three reasons:
- Inertia - Many businesses have had POTS lines for years and never got around to making the switch. That resistance will be harder to maintain as monthly rates continue going up.
- Reliability - POTS lines often continued working during a power failure, because copper phone wires have their own power source. However, carriers are cutting back on POTS infrastructure in ways that increase the frequency and duration of outages.
- Legacy Devices - This is the toughest challenge. There are millions of mission-critical legacy devices in businesses that require a POTS line to function, ranging from fire alarm panels to elevator phones, fax machines, public safety phones, building access systems and more. Because of regulatory requirements or lack of internet access, these devices can’t make the transition to VoIP.
The Solution for Legacy Devices: POTS Replacement
Ripping out legacy devices as a response to Copper Sunset is often impractically difficult or expensive. The alternative, which a few companies have developed, is POTS replacement, also known as “POTS in a box.” This is a solution that provides a digital connection that looks like a standard POTS line to the legacy device.
What to look for in a POTS Replacement:
- A single package combining hardware, a wireless data connection on a nationwide network and phone service.
- One that maintains a managed voice channel that doesn’t touch the public internet.
- Meets regulatory requirements such as NFPA 72 and UL 864 for life-safety systems (or with certification pending).
- Should be affordable, easy to configure, install and maintain.
“Insofar as particular end users steadfastly remain reliant on (POTS) as a matter of preference, we likewise are not persuaded that the Commission must ‘protect’ every preference some customers might have, especially in the face of alternative options for obtaining voice services,” the FCC said in its 2019 order.
It’s important to take the FCC’s words to heart and help businesses make the big leap from analog to digital phone service.
About Chris Burgy
Chris Burgy is the Vice President of Development at Ooma and is responsible for mergers and acquisitions, strategic partnerships and driving Ooma’s strategy for enterprise unified communications as a service (UCaaS). Prior to joining Ooma, Chris was Vice President of Corporate Strategy at ShoreTel. For more information about POTS Replacements, please visit www.ooma.com/airdial. For questions or comments, please email: [email protected].