What Is the “PSTN”
and Why Should You Care?
It appears that you can fool most of the people most of the
time. AT&T has proven that if you spend a boatload of money and repeat the
same deceptive statements over and over, (and have a media that just parrots
the statements), the public will believe anything you want them to.
The term “Public Switched Telephone Networks” (PSTN) or the
word ‘utility’ is case in point. They have come to mean ‘bad’ or “old” or other
derogatory labels. Truth be told, AT&T has snookered you. – and it cost you
thousands of dollars and has done economic harms to your community.
And you should care because AT&T-Verizon, with the help
of the American Legislative Exchange Council – are closing down the PSTN –
abandoning about ½ of America and creating new “Digital Dead Zones”—regardless
of the actual facts.
And you should care because wireless services are controlled
by the wires as most cell sites or Wi-Fi hot spots are connected to a wire;
everything from ‘bandwidth caps’ or the cost of wireless service are controlled
by the controllers of the wires.
And you should care because removing all telecom regulations
impacts all services in the US, from who gets high speed service, competition
for all services, including cable service or other intangible things such as
net neutrality, SOPA-SIPA proposed laws or privacy or AT&T and Verizon
acting as warrantless policeman.
Today, customers have more choices of toothpaste or pizza
joints than they do of internet or broadband competitors.
Regardless of what you been told, the PSTN, the state-based
utility, are the wires into your home or office, school or library. It should
have already been upgraded to a fiber optic –very fast service; it was never
supposed to remain the old copper wiring. You paid thousands of dollars for
these upgrades. And it is supposed to be able to handle ALL services –
broadband, Internet, or cable – phone or even VOIP service. And these services
were supposed to allow any competitor to offer you service. And this wire,
regardless of the current condition or technology is the Public Switched
Telephone Networks, the state-based utility. Anything else you heard is a
fabrication of the phone companies.
And the utility serves everyone and kept the price of
service ‘fair and reasonable’ because the rural customers are averaged with the
urban customers.
And the definition we just provided is based on facts, not
corporate hype or the FCC allowing corporate tomfoolery or hand waiving.
1)
The PSTN Was Never just “POTS” but is ALL Services Over the Wire.
“The public
switched telephone network is not a single-use network. Modern network
infrastructure can provide access not only to voice services, but also to data,
graphics, video, and other services.”
Or the legal
definition: ("public switched network"
in 47 C.F.R. 20.3):
“Public
Switched Network. Any common carrier switched network, whether by wire or
radio, including local exchange carriers, interexchange carriers, and mobile
service providers that use the North American Numbering Plan in connection
with the provision of switched services.”
The "PSTN" is, simply put, the
many interconnected common carrier networks that use telephone
numbers. It has nothing to do with the technology any of them use.
2)
The PSTN Was Supposed To Be Upgraded to Fiber Optics for All Services.
New Jersey state law, still on the books in 2012, states
that the PSTN was for high speed data services, broadband and video, which
included cable programming.
"D. NJ BELL'S PLAN FOR AN ALTERNATIVE FORM OF REGULATION MAY 21, 1992
--- NJ Bell's plan declares that its approval by the Board would provide the
foundation for NJ Bell's acceleration of an information age network in Now
Jersey and referred to by NJ Bell as ‘Opportunity New Jersey’. Opportunity New
Jersey would accelerate the deployment of key network technologies to make
available advanced intelligent network, narrowband digital, wideband digital,
and broadband digital service capabilities in the public switched network, and
thereby accelerate the transformation of NJ Bell's public switched network,
which today transports voiceband services (voice, facsimile and low speed
data), to a public switched network, which transports video and high speed data
services in addition to voiceband services."
That was 20 years ago…
3)
The Entire PSTN Utility was to be Upgraded to Provide 100% of Customers
with s Fiber Optic Future.
In state after state, laws were changed to rewire the PSTN,
supposedly removing the old copper wiring and replacing it with fiber optic
services.
·
Connecticut was to spend
$4.5 billion and have the state completed by 2007.
·
Pennsylvania is supposed to
be completed by 2015;
·
California was to have 5.5
million homes completed by 2000, and spend $16 billion dollars.
While each state was different, the fact is no state was
ever completed.
4)
You Were Charged Thousands of Dollars for the PSTN to be Upgraded.
The scam was simple –the companies went state to state and
got laws changed that where they signed a contract that said – add extra
charges to the customers’ bills and we will use the money for ‘new construction
and upgrades’. Then they pocketed the money.
Our report from 2002
highlighted how these excess profits ended up being used for overseas
investments, executive pay and other non-construction spending.
5)
What about AT&T’s U-Verse and Verizon’s FiOS? The Companies are
Privatizing Publicly Funded PSTN Networks.
In 2004, after Verizon and AT&T used the promise of
these new, second round of upgrades to get rid of the obligation to rent these
utility PSTN wires to competitors, which was mandated by the Telecom Act of
1996 and even in state laws, AT&T and Verizon were able to create separate
subsidiaries that got the utility customers to fund these new services, but
most of the revenues appears to be going into other ‘non-utility’ bank
accounts.
It had been a massive privatization of publicly funded
networks – I.e., it appears that
Verizon
FiOS are not ‘new expenditures’ but the company has been using the utility
construction budgets to create these ‘cable services’. AT&T has done the
same thing, and their recent announcement to spend an
additional
$14 billion on upgrades is, again, not ‘new expenditures but mostly a
restatement of the normal construction budgets – monies that were supposed to
be used to upgrade the utility, PSTN plant.
6)
You Were Charged Again – Maybe for Services You Will Never Get.
In our report, "
Verizon's
State-Based Financial Issues & Tax Losses: The Destruction of America's
Telecommunications Utilities, the Public Switched Telephone Networks
(PSTN)”, it is clear that there has been
a wholesale dismantling of the PSTN by moving profitable assets out of the
utility bucket, while dumping expenses into the utility-PSTN part of the
company – and this includes everything from DSL and broadband to even wireless
expenses. This dumping of expenses, combined with the companies’ affiliates not
paying their fair share results in major losses for the PSTN. Verizon, New York
claimed to have lost $2.2. billion dollars in just 2010, with a ‘tax benefit’
of $716 million in state and federal taxes.
Claiming losses, the Verizon went back to the regulators and
got rate increases. However, AT&T and Verizon announced that they were
‘abandoning the PSTN’ – and so customers in these areas are paying rate
increases for services that they will never receive.
And I need to make two things clear -- New York State agreed
to let customers fund FiOS – illegally, and raised rates because of losses. New
York State Department of Public Service, June 2009
“We are always
concerned about the impacts on ratepayers of any rate increase, especially in
times of economic stress,” said Commission Chairman Garry Brown. “Nevertheless,
there are certain increases in Verizon’s costs that have to be recognized. This
is especially important given the magnitude of the company's capital investment
program, including its massive deployment of fiber optics in New York.”
“Verizon's financial condition is ‘relevant’ when the
Commission considers pricing changes because "the state has an interest in
a viable company….There seems to be little question that the company is in need
of financial relief; Verizon reported an overall intrastate return of a negative
4.89% in 2006 and its reported intrastate return on common equity was a negative
73.6%.”
The disconnect? FiOS revenues and other services are not
included because of a shell game played – only regular phone lines are being
counted, not the services over the wires, which can include everything from
calling features to lines that have been upgraded to FiOS and all of its
revenues.
7) Access Lines
Declines? Most AT&T and Verizon Lines Aren’t Being Counted.
a) AT&T’s
statements about the ’access lines' are deceptive.
Why? First, the entire U-Verse deployment is based on the
PSTN wires. They are simply reclassifying the lines --- the PSTN are
telecommunications lines, but when U-Verse voice service is placed on the
lines, then those lines are NOT counted as a line – and are reclassified as an
‘information service’
AT&T even admits this in their annual report.
b) The Accounting of
Lines Is Only Counting Voice Lines and Not All Other Lines
“Any such forward-looking policy must enable a shift in
investment from the legacy PSTN to newly deployed broadband infrastructure.
While broadband usage – and the importance of broadband to Americans’ lives –
is growing every day, the business model for legacy phone services is in a
death spiral. Revenues from POTS are plummeting as customers cut their
landlines.”
As this shows ‘broadband lines and revenues are different
than ‘land lines’ or POTs”. This deceptive slight of hand then lowers the land
line accounting and is ‘plummeting” because all of the other revenues, as we
discussed are going into a different financial bucket.
c) Non-Switched
Lines, the Majority of Lines ARE NOT COUNTED
There are two types of lines that are part of the PSTN and
have been since the 1980’s – Switched and Non-Switched. Non-switched, also
called ‘special access” are data lines that include everything from alarm
circuits to DSL or FiOS.
Total Telco Lines, 2006
Source: FCC
|
Type of line
|
Lines (millions)
|
Percentage by Type.
|
|
Switched
|
140
|
42%
|
|
Non-Switched
|
197
|
58%
|
|
Total
|
337
|
100%
|
The FCC stopped requiring any break outs of lines in 2007;
the last published data showed that non-switched lines had become the majority
of lines in the US—and in the quote above, these lines ARE NOT counted in the
‘line losses’.
There are also “information service” lines, which
besides VOIP are PSTN lines that have been reclassi
