Questions About Investment Return for IP Networks as PSTN Shutdown is Pondered

As policymakers and service providers ponder the implications of a future “shut down” of the public switched telephone network, they will face a new series of questions.

Since the robustness of investment in new networks will hinge on expectations about profits, many of the questions will flow directly from the more challenging business model. As the regulatory framework had to change in the shift from a monopoly model to a competitive model, so the framework arguably will have to change again with a shift to all-IP networks.

When service providers worry about the implications fo “dumb pipe” or “over the top” business models, they simply acknowledge a key change in the foundation of the networks business, namely that network access and applications now are logically distinct.

Whatever else might be said, it is obvious that “certainty” is not a key feature of the fixed network business anymore. That’s a problem since uncertainty is the enemy of investment.