Service providers and channel partners are developing strategies to move customers off copper phone lines as the Federal Communications Commission clears the way for carriers to shutter legacy infrastructure.
The FCC on March 26 loosened regulations on copper retirement. The move was a win for Verizon, AT&T and other incumbent local exchange carriers intent on mass-migrating customers onto digital products.
“It's going to greatly reduce the regulatory burden on ILECs, which means they're going to get stuff done faster. It also means that customers need to start thinking about their POTS replacement strategies now,” MetTel VP of Product Management and Regulatory Affairs Sean Sullivan told Channel Dive.
Incumbent local exchange carriers are no longer required to publicly notify the FCC of pending migrations. While carriers must still provide the FCC with documentation, the lead time has been cut nearly in half, from 60 days to 31 days. The FCC also removed the requirement that carriers develop a VoIP offering. ILECs are required to develop their own voice over IP offering.
Legacy phone services have been surprisingly resilient — and surprisingly painful for CIOs. Businesses use POTS lines for fire alarms, elevators and points of sale.
“The POTS services being decommissioned by the LECs historically support important infrastructure assets, and the FCC deregulation is jeopardizing connectivity of these assets,” said Billy Houghton, GlobalNet Connect managing partner.
The remaining lines are subject to massive price hikes. Sullivan said a California POTS line that cost roughly $95 a decade ago can now be as much as $2,700.
“It's gone up almost 30-fold in just 10 years, and there's no end in sight,” he said.
Ballooning costs have flown under the radar for many organizations.
“The primary driver for GlobalNet's clients has unfortunately been telecom audits, which uncover increasingly high POTS fees,” Houghton said. “The unfortunate reality is the LECs are providing notices which often go disregarded until a massive invoice shows up, disrupting budget and introducing waste.”
Straight to VoIP
MetTel and other wholesale aggregators have changed their tune on copper retirement as ILECs march forward.
Two years ago, aggregators were moving clients from retiring copper lines to existing copper lines in their wholesale inventory, thereby maintaining POTS and stabilizing prices. The strategy bought time for the client to evaluate VoIP-based products colloquially known as “POTS in a box.”
However, copper retirement has progressed too much at the ILECs to continue that strategy. AT&T started its migration plans years after Verizon, but it has rapidly accelerated its pace. Inventory is thinning.
“We're just moving straight there because it's going to happen,” Sullivan said.
Carriers, aggregators and partners have stressed the urgent need to move fast since 2022, when the FCC stopped forcing carriers to maintain copper. The clock is winding down for procrastinators.
“When everyone had to get that Real ID updated driver's license, people kept putting it off and putting it off and putting it off, and finally they said, 'Hey, you gotta get it done this year,' Sullivan said. “ Well, if you try to make an appointment, they're all filled. All those slots are taken, because everyone waits until the last minute.”
ILECs are also shifting their core VoIP offerings to replace POTS. With the FCC allowing them to pair services with VoIP products, some are turning to MetTel and other third-party providers. Carriers are reselling MetTel’s POTS in a box offering — sometimes exclusively.
“They probably said, '[MetTel] does it really well, and we can probably hang on to some of that revenue if we use them as opposed to losing all of that revenue to a competitor,’" Sullivan said.
MetTel’s relationships with carriers reflect inherent tensions in the market.
“We compete against these guys, we buy from these guys, and we sell to these guys,” Sullivan said. “Telecom is a crazy industry.”
Brian Washburn, chief analyst for telco B2B solutions at Channel Dive sister company Omdia, expects copper migration to be an ongoing story as local providers delay retirement.
“Nobody's forcing telcos to go off copper,” Washburn said. “There are still places like community co-ops and those sorts of areas where, if copper is sufficient and there's not a need for a lot of high end broadband, do the economics work out to retrain everybody to go to fiber?”
