Hardly outdated

Today, conventional wisdom seems to think that landlines are on their way out. This idea is backed up by some telecommunications companies, who would like to see landlines become a thing of the past. This is understandable, and even justified from their perspective. Landlines constitute a large capital expenditure to build; they’re also expensive to maintain. It’s hardly surprising companies want to get rid of their least profitable services, and they may in fact be justified in doing so, if the societal consequences of doing so are, on the whole, better. The argument; however, does not usually focus on the consequences. Oftentimes, some telecommunications corporations argue the closure of landlines is inherently positive, regardless of consequence. But there is another way of arguing against the closure of landlines: establishing the consequences, and analyzing their benefits and costs relative to society. It turns out that there is a solid, consequence-based argument that the closure of the landlines will do more damage to society as a whole than their maintenance.

In order to get a better idea of the consequences of closing landlines, we must first get a handle on the value they provide. Once we understand this, our comparison is simple: what is the value lost by abandoning landlines, and what is gained by doing the same. It may be that rural Americans are actually not hurt very badly by this proposal, and that the increase in service the companies claim they can provide with the extra money far outweighs the losses. On the other hand, the damage may be so extreme to rural Americans and those dependent on landlines that no societal benefit can justify cutting off landline service. It is important to note that society, in this piece, is defined as the sum of all individuals, excluding government and businesses. That way, the gains and losses to the American people are ultimately what counts here.     

photo by CmdrGravy 

photo by CmdrGravy 

To begin, the value of a landline to rural Americans must be accounted. The landline provides many unique services which wireless and Voice Over Internet Protocol (VOIP) services cannot. It is far more reliable than wireless service, able to provide telephone access far more consistently than cell phones, which run out of battery and reception or VOIP, which necessitates Internet connectivity. The reliability plays a key role in emergencies, both personal and on a large scale. 911 tracking to landlines is far more accurate, and the landline connection provides a guarantee which service and battery dependent cell phones do not. For VOIP, 911 service is not a guarantee, as some customers have to pay extra for this service. In the case of larger emergencies such as natural disasters, cell phone towers and Internet connections are far more vulnerable. Not only are they far more exposed to the ravages of hurricanes, tornadoes, and other disasters, their backup systems are far weaker even if they survive the initial shock. This lesson was learned the hard way by folks in suburban northern Virginia, and they have far better coverage than most rural places. Find out more here

Landlines are also useful in non-emergency situations. Specifically, they are very important for businesses, which prefer to have an official line. This provides an advantage over cell phones in that potential customers are dealing with the formal business entity as a whole, rather than reaching out to individual employees. As a businessperson, it is often helpful to direct business inquiries through a landline that is explicitly for professional purposes than redirect them to a personal cell phone or buy a second cell phone for business purposes. As a customer, a business landline is an advantage because there is a clear understanding that any calls placed to the business landline means one is dealing with the business as a single entity, rather than its individual employees. 

And finally, landlines have great personal uses too. They serve the less mobile, and those whose particular situation makes cell phone access difficult (just ask anyone who lives in certain dorms at the University of North Carolina or anyone who has difficulty with tiny cell phone buttons). Oftentimes, a home phone is great for families to serve as a spam screener but more importantly as a way for individuals to contact the family as a whole, rather than one individual’s cell phone. I have been present on numerous occasions where the house phones are picked up by everyone in the family so that we can all talk to a friend or relative who is calling from long-distance. Try doing that on cell phones with their tiny handsets, and clumsy conference calls. The cell phone is great for the individual—make no mistake, but to serve a group of people that views itself as a single entity, (a family, a business, etc.) it doesn’t make as much sense.

So how to assign a dollar value to these unique abilities? I admit, the valuation tools are far beyond my comprehension, and it may in fact be impossible to establish the value of using a landline to, say, make a 911 call that saves a life.  But before companies can claim that landlines have so little value that abandoning them makes sense, they need to factor in all the things that make a landline valuable: their federally-guaranteed service, their professional uses, their critical contribution to emergency preparedness, and their ability to work where cell phones won’t, amongst other things. The costs of providing similar service without landlines needs to be established as well. Many expensive towers will need to be built, and the costs of that can be astronomical. Even if they are built, they will serve fewer people with quality service. Additionally, if the goal of a company is to increase revenue, it will not deploy cell towers in remote areas. On the other side, a landline goes directly to the people it serves, minimizing extra costs associated with covering a larger area and providing direct reliable service. Think of it as trying to drink from a sprinkler or trying to drink from a hose: one is direct and plentiful, the other is widespread and spotty. Another critical point, if a telephone company receives Universal Service Funds (which all major companies do), they are required by law to provide basic landline service. This consumer protection is not required for wireless or VOIP services. So, as a rural customer, you are guaranteed a landline, but you are NOT guaranteed cellphone signal nor Internet access. Then there’s the issue of spectrum: the amount needed, not to mention the bandwidth that will be needed as well. Though spectrum is far less crowded and easier to obtain in rural areas than it is in urban areas, it still costs money. It is possible that as companies abandon landlines to go all wireless, spectrum in some of the larger, more populated rural areas will grow crowded and far more expensive. This has the potential to become a boondoggle. So the costs will be massive, especially in regions that don’t lend themselves to wireless service, like the mountains. The costs won’t just be high for the companies; they’ll be high for consumers. According to a CNN report on cell phone bill prices, families can still “easily top $200” every month, which winds up at about $2400 per year. A landline does not cost nearly as much, so cancelling this option could in fact leave some families disconnected because they cannot afford basic phone service. With high costs for both companies and consumers, it seems that this deal will make society much worse off. 

What about the future? Maybe the companies can save enough money from operating profits to cover their capital expenses, and create a higher level of service that will contribute to society in a way that compensates for the value lost if landlines are removed. The first part of that statement is perhaps plausible. Since companies want to get rid of landlines and at least pay lip service to providing a similar level of coverage with wireless or other systems, then they must think they can cover the capital costs of doing so. A more worrisome alternative is that they will not provide a similar level of coverage. Whether or not they do so, it seems that they’ll make a profit, and as a business, there is nothing wrong with that. However, this situation isn’t just about business. It’s about thousands, even millions of rural Americans who stand to lose something of inestimable value. If those companies can provide a compelling argument that they can turn their profits into something that puts that value back into society, then maybe they have a case. But that doesn’t seem likely, given how important landlines are, and how they are the only viable option for some people. I don’t think the telecom companies involved in this dispute are being unreasonable, just narrow-minded, but it is not their job to look after the wellbeing of people. And I think the legislators working on the issue cannot afford to be narrow-minded because it is their job to protect the wellbeing of people. This isn’t about some easily-accessed bottom line at the front of an annual report—if it were, the answer would be clear. This is about something greater and much harder to identify: the bottom line for society. And it seems evident that it will make society worse off. Legislators are often accused of thinking too much like businessmen. I’m not for or against that, but I will say this: when they go to their state houses and Congress to consider the matter, they can think like businessmen if they want. I just hope that when they do, they think of the American people as their company, their consumers, their suppliers, and their investors, and if they do that, then I think they will have a very clear answer.