A Call for Change
Telephone services set to experience shift in focus.Telephone services are on the verge of an upheaval like none seen before, and whether they ultimately become increasingly innovative and economic or stifled and above-cost will hinge on decisions reached by policy-makers in Washington over the next year or two. With POTS (plain old telephone service) now viewed as a commodity, long-distance carriers are dropping the unprofitable consumer market, and they, as well as the RBOCs (Regional Bell Operating Companies), are looking to the business market as the profit center of the future. Businesses are migrating to lower-cost, higher-feature IP voice services, ranging from dedicated, managed enterprise offerings, such as Sprint Corp.s IP-Enablement system, to Internet-based offerings for small offices, such as Vonage Holdings Corp.s service.
The relative affordability of new IP-based services depends, in some cases, on providers ability to get through the last mile of the network, which is controlled by the RBOCs and other Incumbent Local Exchange Carriers. It also depends on not having to pay into the Byzantine funding pools that support the traditional phone system. These variables will be at the center of the debate in the next two years over how to reform the regulatory regime.