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Business phone service: trending how we talk today.

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There was a time, since the invention of the telephone, when one party called another at home. If they were there, they answered. If not, the only option was to try later or wait until the office opened the next day and the discussion picked up there. Then we added answering machines. "Leave a message; I will call you back ..." When that wasn't fast enough, pagers were added to the mix. "Stop what you are doing, call me now ..."

The advent of the cell phone now allows business to interact across the world 24/7. Smart phones enable documents, files and sales receipts to be accessed anywhere. With the advent of texting, voices are silenced by the almost imperceptible tapping of a virtual keyboard in the most obscure locations. From pew to potty, connectivity is ubiquitous, or nearly.

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LOCAL TELEPHONE COMPETITION

For the past century or so, Alaskans have been served by local telephone companies for both household and business use. The fact of the matter is: we had no choice. During that time, the state's long distance service was, for the most part, provided by AT&T Alascom and GCI. State regulators controlled and regulated the monopolies. Local public switched telephone (PST) companies, private and municipally owned, were heavily regulated on rates and services. As a result, the companies were not willing to take much risk in their business model. Rates remained relatively high and little evolution occurred in either service or technology. In the 1980s and after deregulation, according to a September 2010 Federal Communication Commission report "Trends in Telephone Service," competitive access providers (CAP) were allowed to market services over wired networks to business customers. There was some penetration into the local market, but that phenomenon did not start to really move until the 1990s and, it could be said, the next level of phone service evolution.

A variety of companies, including cable television providers and local service divisions of long-distance companies, began to offer local telephone services to a broader range of customers. Initially the new services were available to larger businesses, but eventually trickled down to smaller businesses and residential accounts. These competitors to the local phone monopolies are often called competitive local exchange carriers (CLEC).

The Telecommunications Act of 1996 cultivated three ways for competitors to enter local telephone service markets. "First, CLECs may resell the services of the incumbent local exchange carriers (ILEC). Second, CLECs may make use of ILEC facilities, such as leasing ILEC unbundled network elements (UNEs) loops and transport. Third, CLECs may build a complete set of facilities to directly compete," according to the Commission's report.

The natural provider with an existing infrastructure was the cable provider. Since about 2002, cable companies have jumped on that bandwagon. Utilizing voice over internet protocol (IP) or interconnected VoIP, cable service providers, owning their own networks, began offering voice communications over a broadband connection. This allows users both to receive and place calls to the public switched network, just like traditional phone service.

CHANGING TELEPHONE SERVICE

Today there are primarily two types of telephone providers in Alaska: Phone companies that have been around for a long time and now cable companies with an increasing market share and a presence in almost every Alaska city.

Many of the providers for the new services did not have an ILEC regulatory status. These providers were required to report to the FCC basic information about their local telephone and interconnected VoIP services.

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This lack of local operations and price regulation changed the way companies did business. Instead of being priced through regulation and indirectly subsidized in many areas, the new ventures were private and the investors took the risk. That risk has paid off. Generally speaking, those new arrivals into the century-old business have done well, if the price of company stock is any indication. Better yet, the consumer is now offered more choices and a new level of technology. An office telephone is no longer just a telephone. It comes equipped with multiple lines, voice mail, caller ID and a host of other whistles and bells.

WIRELESS CONNECTS BUSINESS GLOBALLY

With all the changes in wired service, no other technology has impacted the way Alaskans utilize the telephone the way cellular has done. This service did not come without a price tag. Only a dozen years ago, cellularphones cost the Maskan user between $0.50 and $1 per minute for incoming and outgoing calls. And, the phones were phones. That is, the user received or placed calls. At the same time, in-state long distance call rates were $0.14 a minute.

Improved technology and competition has reduced the cost of both landline phones and cellular price packaging. Cost-per-minute pricing is giving way to unlimited call plans. "Unlimited is the easy way to bill," says GCI Vice President David Morris.

As Alaska grows, the number of telephones in use has historically increased proportionately. Maybe the smartphone is to blame, but now the number of telephone customers--that is, individual accounts or phone numbers--has grown disproportionately. There are nearly 120,000 people in Matanuska Telephone Association's (MTA) service area of Palmer, Eagle River and Wasilla--or about 10,000 square miles. MTA's director of marketing, Carolyn Hanson, tells us the company has close to 100,000 wireless users. As an example, she says her family of five used to have a single landline. Now, every member of the family has a phone. And that phone travels with them wherever they go, while the landline is still at home.

The smartphone technology allows Alaska business to stay in touch and work smarter. These new phones are mini computers providing most every and in some cases more, application traditionally available on the company workstation in the office.

The smartphone is not just the iPhone. In fact, smartphone technology was around for years prior to the iPhone. It was, however, that single Apple device that caused the explosion in wireless phone usage. The first big name in what today we call a "smartphone" was the BlackBerry from Research in Motion (RIM). Most every business with company phones capable of email used a BlackBerry. Pundits are suggesting the BlackBerry is "auguring in" and unless the company performs some sort of sensational technological comeback that device may soon share the shelf with the likes of the Motorola Brick phone.

Both Hanson and Morris say the smartphone is the device of choice. According to figures released by comScore Inc., a global provider of digital marketing intelligence, U.S. smartphone subscribers for those 13 years of age and older was 84.5 million in August (averaged over a three-month period). Of those figures, 36.9 million used the Google (Android) platform, 23 million used Apple (iPhone), 20.7 million used RIM (BlackBerry), 4.8 million used Microsoft and 1.5 million used Symbian.

PHONES USED FOR MORE THAN TALKING

Comparing the demographics of today's phone (cellular or wireless) user, it is easy to see how the phone's usage changes with age. Morris says the older customer uses a cell phone to talk - basically what it was originally designed for. The medium-aged user takes advantage of the phone's email and browsing attributes. Morris says he is not sure if the next generation owner of a cellular phone will even know how to talk on the device. Texting appears to be the communications mode of choice now and in the future for the newest set of users.

Today's texter has a new list of slang and it is evolving as you read this. LOL is laughing out loud or some variant. Such shortcuts are not limited to the English language. MDR in French translates to died laughing. Consider TNOP: totally not our problem--and the list goes on. For more, check out: Internet Slang Words and Computer Slang at www.internetslang.com.

IS WIRELESS REPLACING WIRED?

Morris at GCI says that company is seeing about a 3 percent annual decline in the company's wired service, which is offset by big growth in cellular. Over at MTA, Hanson says cellular is growing disproportionately to the area's population; but the company is not seeing any decline in its wired connections. This may be a result of the provider's requirement for a phone hookup for the customer to have a DSL or high-speed Internet connection. She says more than 70 percent of homes served by MTA have 30 megabytes of broadband speed.

"Wireless is where the growth is," Hanson says.

Are landlines going to be replaced by wireless? Quoting market observer Brian Prows on an Internet blog: "If all U.S. landlines (122 million) were ported to cellular, the carrier's network would collapse due to insufficient wireless spectrum. Until some bright person invents a new way to compress voice and data bandwidth on assigned cellular frequencies, it's impossible to port all landlines. So will cell phones replace landline telephones in the U.S.? Unlikely and not very soon."
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Title Annotation:TECHNOLOGY
Comment:Business phone service: trending how we talk today.(TECHNOLOGY)
Author:Colby, Kent L.
Publication:Alaska Business Monthly
Date:Nov 1, 2011
Words:1495
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