FCC's National Broadband Plan: POTS 'not sustainable'

300-page document says maintaining legacy equipment too costly, inefficient
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Thursday, April 1, 2010

WASHINGTON—It’s not time to panic, but it is time to plan. That was the reaction this week from security industry insiders who’ve had a chance to look at the FCC’s new 300-page National Broadband Plan, a plan that lays out how the country, and the alarm industry will say goodbye to POTS and hello to broadband.

“Stay informed,” said ESA’s lobbyist John Chwat, who advised members to “read the information we put out.” He noted that, “we have committee meetings and association activities that are available during ESX. And in general, [members] should just acquaint themselves with the issue.” In the future, ESA will help members be active in the process, by facilitating “contacting Congress or contacting the FCC through the associations.”

Following its December 2009 public notice seeking comment on the formation of a government-mandated National Broadband Plan, the Federal Communications Commission on March 16 unveiled the fruits of its labor. The plan should be a wake-up call for an industry that had its genesis with non-broadband technology and still depends heavily on POTS and the PSTN (public switched telephone networks) infrastructure. According to a March 25 release from ESA, the deadline for the old infrastructure to pass into obscurity is still up in the air, but the transition away from POTS is moving forward, and according to industry experts, the time to prepare for that transition is now.

Section 4.5 of the FCC’s Broadband Plan addresses, in part, the fate of the PSTN infrastructure. “Increasingly, broadband is not a discrete, complementary communications service. Instead, it is a platform over which multiple IP-based services—including voice, data and video—converge … As customers leave the PSTN, the typical cost per line for Plain Old Telephone Service (POTS) increases, given the high fixed costs of providing such service. Between 2003 and 2009, the average cost per line increased almost 20 percent,” the plan reads. “Regulations require certain carriers to maintain POTS—a requirement that is not sustainable … The challenge for the country is to ensure that as IP-based services replace circuit-switched services, there is a smooth transition.”

According to AES IntelliNet president and CEO Mike Sherman the real issue facing the security industry now is that it has never owned and controlled the communication medium upon which its services so completely depend. He said that until now that lack of control wasn’t a real problem because POTS was at least reliable. “I’ve been in the alarm industry for 30-some-odd years and if you look at the alarm installer during that time, he’s always controlled two parts of an equation. He’s installed the equipment at the premises and he’s controlled the central station. Never in the history of the security industry has he ever controlled the communication path between them. It’s always been POTS,” Sherman said. “When you go with broadband, at best it’s a best effort. They guarantee nothing. They make it available to you and they do their best to make it work. Is that five nines reliability? No … I would argue that the interests of the purveyors of broadband are exactly the opposite of the security industry. We’re interested in getting very small pieces of information across reliably. The people who’re building broadband are building networks that are not reliable for us—they’re built for the people that are paying the most and want to download big chunks of data on the Internet.”

Max Tridad, owner of alarm company 3G Alarm, had a warning for the industry. “It is not the industry that is driving the migration of alarm signaling to IP—it’s the consumers. AT&T could carry on providing POTS lines for the next 50 years, but it’s irrelevant as consumers no longer want to pay for them,” Tridad said in comment to a topical Security Systems News blog post. “If monitoring subscribers are not under contract and they decide the time is right to disconnect their POTS line, have no doubts about it, they will change monitoring companies if they do not get the right answers from their existing alarm company.”

Sherman said the problem with broadband communication is that it is at the mercy of bandwidth, which fluctuates depending on how many people are using it. “I was in a meeting today, and about 2 o’clock we were doing something on the Internet and all of a sudden—you could see it happen—everything precipitously slowed down because all the kids got out of school and logged on,” Sherman said. “It was kind of funny to see, but it’s not funny if your house is on fire and you’re relying on that message to get through that slow communication path.”

Chwat felt the transition from PSTN to broadband would take a while and the interim could best be used to stay informed and get active. “A lot of people want it to be implemented by 2012 or 2015, but it is indicated in the plan that it could take as long as 2020 for the entire plan to be implemented,” Chwat said. “This is not something that is going to be done overnight. There are many battles that have nothing to do with our industry that need to be fought, and the key thing is that we are very active in the AICC [Alarm Industry Communications Committee] that submits comments to the FCC on this issue.”

Sherman agreed that the industry really needed to be vigilant and stay informed. “The industry is based on a recurring revenue business model, and if the communication is not there, or not reliable that threatens our business model … The security industry cannot—cannot—afford to sustain any newsworthy, bad releases. We have to deal with the reliability of the communications because if we don’t we’ll all be punished,” Sherman said. “You need to understand the importance of the decision when you opt for a technology—whether it’s IntelliNet or something else. Know what you’re getting. Look past the glossy brochure that the purveyor provides you.”