Hurricane rebuilding gives glimpse of future: the end of traditional phone service

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Posted: Thursday, October 24, 2013 12:00 am

MANTOLOKING, N.J. — Hurricane Sandy devastated this barrier island community of multimillion-dollar homes, but in Peter Flihan's view, Verizon Communications has delivered a second blow: The telecommunications giant did not rebuild the landlines destroyed in the storm, and traditional telephone service here has now gone the way of the telegraph.

“Verizon decides then and there to step on us,” said Flihan, 75, a retired toy designer and marketer.

Verizon said it was too expensive to replace Mantoloking's traditional copper-line phone network — the kind that has connected America for more than a century — and instead installed Voice Link, a wireless service it insisted was better.

Verizon's move on this sliver of land is a look into the not-too-distant future, a foreshadowing of nearly all telephone service across the United States. The traditional landline is not expected to last the decade in a country where nearly 40 percent of households use only wireless phones. Even now, less than 10 percent of households have only a landline phone, according to government data that counts cable-based phone service in that category.

In Nebraska and Iowa, the number of landlines has been steadily falling and the number of wireless subscriptions growing. Approximately two-thirds of total phone lines in the states are now wireless.

Wireless-only adoption is slightly slower in Nebraska than nationally, at an estimated 38.5 percent of households in 2012. But only about 7 percent of Nebraska households had only a landline.

The changing landscape has Verizon, AT&T and other phone companies itching to rid themselves of the cost of maintaining their vast copper-wire networks and instead offer wireless and fiber-optic lines like FiOS and U-verse, even though the new services often fail during a blackout.

“The vision I have is we are going into the copper plant areas and every place we have FiOS, we are going to kill the copper,” Lowell C. McAdam, Verizon's chairman and chief executive, said last year.

Robert W. Quinn Jr., AT&T's senior vice president for federal regulatory issues, said the death of the old network was inevitable. “We're scavenging for replacement parts to be able to fix the stuff when it breaks,” he said at an industry conference in Maryland this month. “That's why it's going to happen.”

The Federal Communications Commission has long agreed. In its National Broadband Plan, published in 2010, the FCC said that requiring certain carriers to maintain plain old telephone service “is not sustainable” and could siphon investments away from new networks.

“The challenge for the country,” the FCC said, is to ensure “a smooth transition for Americans who use traditional phone service and for the businesses that provide it.”

The Nebraska Public Service Commission requires providers in the state to provide voice phone service to all households in their territories. But it does not distinguish the type of landline, whether copper, fiber or service through a modem, like Cox's Digital Telephone service.

If a copper system were destroyed, “Would we tell them they have to put it back in copper? I think that would be our decision,” said Gene Hand, director of communications for the commission. “If they wanted to build in fiber, I don't know that this commission would have a problem with that.”

But as far as Flihan and others in New Jersey are concerned, that transition from a reliable service — one that has given them a sense of security all their lives — is not smooth at all. An array of state-sanctioned consumer advocacy groups, as well as AARP, have petitioned regulators to disallow the replacement of Mantoloking's copper lines with Voice Link.

Not only will Voice Link not work if the power fails — a backup battery provides two hours of talking time, hardly reassuring to people battered by Sandy — but Verizon warns Voice Link users that calls to 911 under normal conditions might not go through because of network congestion. Medical devices that require periodic tests over phone lines, like many pacemakers, cannot transmit over Voice Link. Fax machines do not work over most wireless phone networks, including Voice Link. Neither do many home security systems, which depend on a copper phone line to connect to a response center.

“They told us this was the greatest thing in the world,” Flihan said. But he estimates that roughly 25 percent of the calls he makes through the Verizon Voice Link service do not go through the first time he dials, or sometimes the second or third. Occasionally, the call is interrupted by clicking sounds, and sometimes a third party's voice can be heard on the line, Flihan said.

Verizon responded that it had offered to visit Flihan's house to address the problems. Flihan said he had refused if Verizon would not bring back his landline.

Overall, the company said that a vast majority of Voice Link customers in Mantoloking and elsewhere liked Voice Link, and if not, they could get phone service over cable television lines through Comcast or another provider.

The difference between wired and wireless, however, is a big one.

Traditional copper landlines use electric pulses to carry voice and data signals over a metal wire, which also carries power, so the phone works during a blackout. Fiber-optic lines are made of a thin glass filament and transmit voice and data at high speeds using pulses of light, but they cannot carry electricity and so do not work during a power failure without a battery. Cable television wires, which can also transmit telephone service, are made of copper, but they require a modem powered by electricity. Even cellphones require power at the cell tower, something that was knocked out during Sandy.

The phone companies point out that even among the households that still subscribe to a copper landline, most probably use cordless phones, which need electricity whether the house has a copper line or not.

The FCC rules that apply to wired phone service — for example, the requirement that every home in the United States must be offered service if desired — generally do not apply to wireless service. The FCC also does not regulate voice service over cable television networks, which are used for telephone service by roughly 30 million homes. And the phone companies argue that they should not be subject to FCC regulations when phone service is transmitted like Internet data via options like FiOS — which uses fiber-optic lines that require electricity to work.

The result is that consumer and public-interest groups — many of whom agree with the phone giants that the transition is inevitable — fear that significant customer protections will be lost.

Those protections require that phones must work in power failures; different companies' networks of wires and switches must connect with one another; emergency calls must automatically give rescue workers the location of callers; and people may keep their phone numbers when they change providers.

“These benefits were not a happy accident,” Gigi B. Sohn, the president of Public Knowledge, a consumer-interest group, told a Senate subcommittee in July. “They were the result of deliberate communications policies that demanded a telecommunications network that served its users first and foremost.”

The phone companies now say many of those protections are outdated and unnecessary.

“The rules that we have in place were designed to regulate what we considered in the 1930s to be a monopoly wireline voice system,” Quinn of AT&T said. In November, the company asked the FCC to begin tests that would eventually permit AT&T to retire most of its copper lines.

Steven Davis, executive vice president for public policy and government relations at CenturyLink, the third-largest telephone company, said the main concern of phone companies was regulation. “If you burden the new technology with the regulations designed for the old, you will impede deployment, impede growth and hurt profitability,” he said.

Even mere uncertainty about potential changes can wreak havoc once consumers hear of shortcomings in the new services. The first wave of resistance came on Fire Island, N.Y., where this year Verizon told residents who had been devastated by Hurricane Sandy that their landlines would not be coming back.

Fire Island residents objected so loudly that Verizon reversed course and said last month that it would build its fiber-optic FiOS service to the island, satisfying residents who wanted some kind of wire connecting their home phone to the outside world.

Verizon says Voice Link in Mantoloking is a short-term fix, and it is looking into other alternatives. But that solution is most likely to come without wires attached.

World-Herald staff writer Barbara Soderlin contributed to this report.


The Louisiana company that serves the majority of Iowa and most of Nebraska outside of the southeast corner lost 5.7 percent of its telephone customers nationally between 2011 and 2012, reporting 13.7 million landline customers in December.

The company does not believe landlines won't be around by the end of the decade. Many customers like to bundle services and still prefer a wired phone line along with high-speed broadband data and video, CenturyLink spokesman Karl Bieber said.

“Despite rapid telecom market evolution, there is still a need for wired and wireless platforms,” he said. Most of the company's local phone service comes over traditional copper lines, while its fiber lines have a different purpose: “It is important to note that wireless providers rely on our fiber network to carry wireless data and voice traffic.”


The company that serves southeast Nebraska and is the state's largest landline provider said it slowed its national landline losses to 4.5 percent annually from 2011 to 2012, seeing subscriptions fall from 3.6 million to 3.5 million wireline customers.

While building its base of landline customers is not a focus of its marketing, Windstream officials believe there still will be demand for the service for quite a while, company officials said. Bundling phone with Internet and television services slows landline losses, said Brad Hedrick, division vice president of operations in Lincoln. “That triple play seems to resonate very well with our customers.”

The company looks to expand other revenue streams to make up for losses. Consumer voice revenue declined 6.3 percent year-over-year, while consumer broadband revenue increased about 4 percent year-over-year, spokesman David Avery said.

Cox Communications

The Atlanta firm doesn't think that landline services will be gone by the end of the decade.

“Cox Digital Phone continues to be a valuable product for our customers, many of whom prefer the convenience and reliability of a landline,” spokeswoman Gail Graeve said. “Two-thirds of our customers subscribe to a Cox product bundle (phone, video and/or broadband) and one-third use all three products.”

Cox, a privately held company, does not make its national revenue and subscriber figures public, but Nebraska records show the provider as having 156,053 landline customers in the state in 2012, just below CenturyLink and Windstream. That was a 3.5 percent decline from the 161,695 Nebraska landline customers Cox had in 2011.

— Barbara Soderlin

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