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What the digital phone service transition could mean to businesses

Greenlining Institute reports a digital phone service transition from the PSTN could result in a lack of reliability, affordability and 9-1-1 access.

A Greenlining Institute report on the phone system's digital transition states that the move from the PSTN to a digital phone network could end basic telephone standards like affordable services and 9-1-1 access. To investigate, SearchUnifiedCommunications spoke with one of the report's authors, Paul Goodman, on the potential risks businesses could face as the PSTN moves into retirement.

As legal counsel at The Greenlining Institute, Goodman advocates for underserved communities' access to affordable and reliable telephone, video and Internet services at the California Public Utilities Commission. He also successfully opposed the anti-consumer proposed merger between AT&T and T-Mobile, and writes regularly about telecommunications and competition policy on Greenlining's blog.

What does the Federal Communications Commission (FCC) currently control in telecommunications for businesses?

Paul GoodmanPaul Goodman

Paul Goodman: The FCC imposes … standard features for a quality voice connection. States and the FCC … [also give phone service providers] service installation and restoration requirements, where they have to restore a service in a certain number of hours or must install a service within a certain amount of days. That's particularly important to businesses, because if the businesses' phone line goes down for two days, that's two days the business isn't making money, and that's really problematic. Another [regulation] … is interconnection. [This is where] phone companies are required to pass … and handle phone calls from other phone companies. [Without this regulation] there are risks that you'd end up with a fractured network where … you would have to have multiple phone subscriptions in order to contact everybody in your business.

What standards does the FCC need to put in place for digital phone services?

We need to realize that … we're using [VoIP] now for our telephone calls; it's time to treat them like telephone calls. 

Paul Goodman, Legal Counsel, The Greenlining Institute

Goodman: It's simple standards, like a call should be a voice-grade call. The network should be in good enough shape that if [a disaster] or a storm hits, the network stays up. You should be able to reach 9-1-1 no matter what kind of phone service you're using. … [Another standard] important to businesses is non-discrimination rules, so that a phone company can't give priority to one person's calls over another. If we switch to this all-digital technology and the FCC doesn't keep imposing the standards we've been imposing on phone calls, you could end up in a situation where a competitor to your business says, 'We could pay the phone company a little bit extra to prioritize our phone calls when the network gets busy or to give us better service quality than our competitors.'  Also, theoretically, a competitor could go to a phone company and say, 'We'd like exclusive access to the telephone network so that we're the only folks that do business with you.' Those are extreme examples, I'll admit. I can't say how likely those risks are to occur, but there are concerns that we need systems in place to make sure we don't reach that point. We may never reach that point, but we should still have those protections in place.

How do telecommunications providers switching to an all-digital phone system result in a lack of 9-1-1 services?

Goodman: One of the standards we have in place for phone companies is they have to provide access to 9-1-1. If we switch to this all-digital technology, and the FCC decides this is something we're not going to impose standards on, then potentially companies could decide not to offer 9-1-1. There might even be a business case for it, like forgoing 9-1-1 service in order to pay $10 less on service a month. I'd like to think that everyone would say, 'No, thank you' to that option, but you never know. 

How could an enterprise ensure they keep 9-1-1 services on VoIP calls without FCC regulation?

Goodman: All that businesses have to do is sign up with an interconnected VoIP provider. That's a company -- like cable companies Verizon FiOS and AT&T U-Verse -- where their systems connect to the telephone network. A non-interconnected VoIP, like Vonage or Skype, that offers a service through your computer so that it streams over the public Internet is not subject to those same [FCC] requirements. Right now, if you order a VoIP service from your standard carriers, you get access to 9-1-1.

How does moving from the public switched telephone network (PSTN) to a digital phone system get less affordable for businesses?

Goodman: One issue in terms of business affordability is special access fees, [which include] credit card processing and point-of-purchase systems [like] ATMs. For businesses, say you have a campus in San Francisco and a campus in L.A. with internal phone systems. You're not going to build your own phone network in order to connect those two together. You're going to go to [a phone service provider like] AT&T or Verizon and say 'We'd like to rent some dedicated space on your phone line to connect those two systems together, so that when you call someone in L.A. it's just like you're calling someone in your local office.' Right now, the FCC regulates that special access. While they don't regulate the prices right now, they do keep an eye on things. The FCC keeping an eye on things is helpful, because if carriers know that someone is watching, everybody sort of behaves. When we make the transition to all-digital, there's a decent argument that the FCC no longer has the ability to impose protections for special access, and therefore, the prices can be as high or as low as anybody wants.

Why would the FCC not treat a phone call on a digital network the same way as on the plain old telephone service (POTS)?

More on the digital phone service transition

What's best for business: PSTN or VoIP?

Are there still PSTN lines or have telecoms moved on?

See why we're saying goodbye to the 'tele' in 'telecom'

Learn what options businesses have when choosing VoIP telephony systems.

Understand how public policy results in reduced service offerings.

Goodman: As a lawyer, I can say that it's all the lawyers' fault, basically. … [They] define two different kinds of communications services: There's telecommunications, where people communicate directly with each other, like on a phone call that transmits a signal down the phone line and someone answers at the other end; then there are information services, where data, like credit card processing, goes down the network – like an Internet-based service. Because of these definitions, you could make the argument that because VoIP calls get converted from a voice signal into packets and then back, it may constitute as information services.

Consumer and other groups have asked the FCC repeatedly to tell us whether VoIP is a telecommunications service or an information service. And the FCC has consistently denied deciding that. If the FCC says that VoIP calls are an information service, then we potentially have fewer protections in place. [If they say], 'It's a telecommunications service,' [it] automatically imposes a ton of restrictions and standards. With a nascent technology, you want a light hand in regulation in order to encourage VoIP to develop. But when they replace the old analog traditional telephone technology with all-VoIP technology, that becomes the standard. To me it's pretty straightforward: If you pick up a phone, dial a number and someone picks up the other end, that's a phone call regardless of the technology. We've reached a point where VoIP is clearly going to be the standard in the next 5-10 years, and we need to realize that this is what we're using now for our telephone calls; it's time to treat them like telephone calls.

What about the concern that moving to digital phone services will make phone calls less reliable?

Goodman: Again, it's about protections being in place. In California [for example], there are standards where if you have a phone outage, you need to get a certain percentage of your lines back up in a certain amount of time. If the FCC suddenly decides that digital phone calls are somehow not phone calls, we may not be able to impose those protections anymore. In that case, you have no guarantee of what kind of service quality you're going to get when you sign up for that service.

Let us know what you think of this interview; email Tessa Parmenter, site editor, and follow @TessaParmenter on Twitter.

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Would you ever choose to use a non-interconnected VoIP service, like Skype, for your business phone calls?