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AT&T is testing its next-gen phone network on rural areas and retirees

A telephone wire center in Toronto. (aw.reeves)

Residents in Alabama and Florida are going to be the guinea pigs in an effort by telecom companies to retire the country's aging telephone system.

A new proposal by AT&T names two cities as test sites to see what will happen when the company moves customers off the old, copper-based phone system that has served the country for decades and onto newer, high-capacity, fiber-optic lines. If it's approved this spring by the Federal Communications Commission, the pilot project will affect thousands of households in Carbon Hill, a small community in rural Alabama, and tens of thousands in West Delray Beach, Fla., where nearly a quarter of the population is over age 65.

What does that mean for service? Over the short run, AT&T customers in these areas will see a big marketing blitz urging them to sign up for the program. Those that do will have to give up their traditional landline connection in favor of either a wireless base station that effectively turns home phones into cell phones or a new landline connection that hooks into a fiber-optic network. In either case, test participants will have their communications routed as packets of data over Internet-capable lines.

Industry experts call this the "IP transition," and it's already happening on its own in parts of the country. AT&T says it loses around 20 percent of its copper subscribers every year to IP-based services. You might know those better as Skype, Vonage and Google Voice, among other examples.

But Carbon Hill and Delray Beach will be among the first to see a phone company speeding the process along. The project will have several stages, each of which requires the FCC's approval. The campaign to convince customers to join the trial began Friday. The next phase, Phase 1, will initiate the transfer; any new customers who sign up with AT&T at that point will be automatically put on the IP-based network. Then, at a time to be determined, AT&T will start transitioning even those customers in Carbon Hill and West Delray Beach who didn't sign up for the trial. That will be Phase 2.

One reason behind the tests is that nobody really knows what to expect from such a large-scale transition. If a power outage hits, for example, will user-purchased batteries last long enough, or will most people skimp out and risk losing communications in a crisis? Will the quality of wireless service match what subscribers get now, or will AT&T run into the same problems that faced Verizon when it tried to unveil a wireless-only option on Fire Island in New York? Carbon Hill and West Delray Beach offer especially challenging environments because the former is a sparsely populated rural town and the other's residents are mainly seniors and retirees. A mistake in the test could cause vulnerable populations to lose service.

The tradeoff is that IP-based networks have the potential to substantially upgrade our phone calls. When a call is moving over a connection that can also carry other forms of traffic, the user can get new features -- such as HD voice calls and even video — things that might seem ordinary to anyone who's used a Web-enabled computer but are totally new to the humble telephone.

Unfortunately, the transition could leave hard-to-reach customers stranded. About 4 percent of Carbon Hill's AT&T customers won't be getting access to the new IP-based systems at all; while AT&T says it's committed to finding solutions for those people, it doesn't yet have a plan.

"We will not move to Phase 2 until everyone has a solution," said Hank Hultquist, AT&T federal regulatory vice president.

"That solution may not come from us," cautioned company lawyer Christopher Heimann.

The IP transition trial may also hold unpredictable consequences for competition. The test area in West Delray Beach includes a residential complex that has an exclusive contract with Comcast, meaning AT&T can't sell services to those customers. That won't stop AT&T from trying to influence potential customers; it plans to set up informational tables at the complex to woo its residents.

Consumer groups warn that phone companies should not inadvertently make service worse for some Americans in the pursuit of improving service for others. Phone companies have an incentive to accelerate the IP transition because maintaining the old copper system is expensive, particularly if it is being used by a declining share of customers.

Brian Fung covers technology for The Washington Post, focusing on telecommunications and the Internet. Before joining the Post, he was the technology correspondent for National Journal and an associate editor at the Atlantic.



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