Tuesday, December 24, 2013

The Phone System

The NY Times has an Editorial regarding what they term the "phasing out of the phone system". The say that what we have now we have had since Bell. Not even close guys. I love it when people who know nothing of what they speak on a specific topic prognosticate, especially on the Editorial pages of the Times. It appears all too often that lawyers and journalists are all too prone to do this, and yes, economists as well.

There has been a revolution in telephone architectures since 1984 with the official breakup of AT&T. Competition and market forces, fettered at times by the FCC, opened the market. To some degree wireless would not be what it is today if we still had Bell Labs and vertical integration. Steve Jobs would have been in prison for violating Federal Law. And most likely we would have more people in AT&T than employed by the Federal Government.

As of now the US does not have a single telephone switch manufacturer left. They have moved elsewhere, including China. What we have a a high capacity wireless network along with extremely clever end user devices working on an IP based network.

As the Times states:

Some telecommunications companies like AT&T argue that the country needs to begin moving away from the traditional system, in which copper wires connect phones to big machines known as switches, to a more efficient Internet-based system that work over wireless or fiber-optic technologies. 

The F.C.C. is expected to authorize AT&T and other phone companies to replace conventional telephone wires with wireless or fiber-optic connections in certain neighborhoods or a large rural area to see how such a change would work in practice. 

Frankly what right does the FCC have to tell companies how to offer their service.  It arguably is the authority Congress gave them for Universal Service. Now the Times in its brilliance states:

Phone companies maintain backup batteries and electricity generators at their central offices to make sure service is uninterrupted during blackouts. But consumers have to plug in devices to use cellphones and Internet-based services, which means there’s a risk of losing service if the electricity goes out. 

As the F.C.C. deals with new technology, it needs to keep in place safeguards that have long ensured that the phone system serves everyone. Today, Americans who cannot afford regular phone service can get a subsidized wired or wireless connection. That should continue even if the underlying technology changes. 

 Batteries in COs are all too often environmental hazards. Just look at 140 West Street, the basement was filled with batteries, then flooded and now being rented out as upscale condos. Perhaps because they cannot tear it down due to the battery deposits. Just a thought. 

But must we keep "horse stables" when we have automobiles, must we keep the buggy whips factories going when we have the same new means of transportation. Cell phone have batteries, they battery lasts a long time unless you are using it excessively. Thus I am really aghast as to the Times demanding we keep all those toxic battery vaults so the "poor" can use their cell phones and Internets during a temporary power outage. Just to let the Times know, most people get Internet via a wireless or Cable feed and not over copper! Those Hayes modems just do not do a great job anymore.

The last paragraph is truly amazing for its Luddite tones:

America has a long history of telecommunications innovation since Bell made the first call to Watson nearly 140 years ago. The issue is not whether the phone system needs to be upgraded. It’s how. 

 First, the US telecom technology was suppressed until the breakup of AT&T. Bell Labs designed capital intensive systems since its profit was a return on investment. The motivation for cost effectiveness was non-existent. The change started with McGowan and MCI and took hold only in 1984. Secondly, technology moves at its own pace. Once started the Times and the FCC can only be temporary roadblocks. So for those "poor" with their free Government supplied, taxpayer supported, phones and Internet, try charging it before the storm! Let technology evolve naturally, not the way our elite wants it to.