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Chapter 4

What’s Going on Behind the Scenes

The Federal Communications Commission (FCC) is a key character in the world of telecom. They’re the entity that regulates communication in all 50 states, and last year, they issued orders that are going to massively impact businesses with legacy systems.

As the orders go into effect through 2022, you can expect one of two things to happen:

  1. The price of your T1s will increase substantially (like by 300%)
  2. Your provider will no longer provide your service due to the cost increase

This spells disaster for organizations that can’t shoulder that kind of expense. Remember when we said digital transformation is becoming a necessity, rather than a trend? This is what we meant.

A Little History

Prior to the mid-nineties, local phone territories had been protected from competition and were exclusively served by monopoly providers. Fortunately, Congress realized that healthy competition would never exist if new providers had to take on the extraordinary costs of building their own wireline networks across the country.

And so, in 1996, Congress passed historic legislation that allowed competition in these territories. The ruling permitted new entrants to lease elements of a network from the well-established companies.

But as years passed, competitive providers increasingly built their own transmission facilities between population centers. The FCC responded by increasing restrictions on their ability to lease such facilities from incumbent providers.

How We Got Here

In order to understand the change that’s occurred, you need to know the term “last mile” facility. Last mile facilities are the wires and cables that run from a local phone office (there’s one located in every service territory) to each customer’s business or home.

In 2019, the FCC issued new orders that will severely limit the ability of competing providers to continue accessing the incumbent’s last mile facilities. These orders will be carried out gradually through August 22, 2022.

An Expense You Can’t Afford

As these changes occur, competitive voice providers like us will need to either build replacement connections or purchase these connections from third parties in order to continue providing these legacy services.

As you can imagine, these options are expensive not only for the providers, but also for end consumers like you. So what can you do about it? Well, we’re glad you asked! It’s time to explore the possibilities of the cloud.

TelNet Worldwide
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