Last week, I discussed reading the report AT&T sent to the FCC explaining why they support an orderly end of the POTS and PSTN network. One point they made is about transitioning funds that would normally support universal telephony service to support the broadband mandate.

Due to consumer movement to VoIP and wireless anyway, POTS and the PSTN costs per user are increasing every day. If you look at these networks as a fixed cost, and if there are fewer users, then the cost per user by definition has to go up. And AT&T is arguing that because of the current set of government regulations in place, the industry is effectively prolonging these networks and causing an investment shift away from broadband. Indeed, according to the report, less than 20 percent of Americans rely exclusively on POTS for voice service because of the cellular and VoIP alternatives they are also using.

So because of the broadband mandate, why not use this mandate to get the universal voice services? It will be a better investment to effectively “marry” the broadband mandate and universal voice service mandate, since if there is broadband access due to VoIP, you then would have voice services. Investment needs to be made to enable universal broadband (the report talks about 8 percent to 10 percent of U.S. households still not having access to broadband) and keeping the old networks up and running causes unnecessary resource spending on them. Additionally, if broadband was made available to everyone, then “telephone calls” would also be made available to everyone, since then they could occur via VoIP.

A second key point they made is one that ultimately is better for them. They are advocating eliminating government requirements to keep the POTS and PSTN networks. In other words, let the markets decide. Presumably, this is ultimately better for AT&T from a financial perspective because of the tangled web of regulations with respect to interstate and intercarrier compensation connection regulations. If these requirements evaporated, then presto — there are no compensation issues.

Will this issue be easily resolved? It’s doubtful, but at least the process has started