The Michigan Telephone blog

In the last week or two I’ve seen several articles and other references to the impending death of landlines (the old-fashioned copper to the home service that many of us have known and used for so many years).  Some people are worried about the prospect, others have cheerfully ditched their landlines and aren’t looking back.

Some are speculating as to why this is happening.  Really, it’s not a hard question. There’s sort of a confluence of factors at this point in time. We will shortly reach the “tipping point” where the remaining landline holdouts will dump their landlines en masse, leaving only a relatively small percentage of diehard landline users.  The thing is, while the phone companies could have forestalled this for quite some time, they actually did nearly nothing meaningful to retain landline customers.  Some have suggested that they didn’t really want to keep their landline customers, that the cost of providing landline service has become prohibitive.  I don’t believe that – it sounds like exactly the sort of lie they might tell regulators when asking for yet another rate increase, but in the cold light of day it makes no sense, except perhaps for a very few, very rural telephone companies that never figured out how to game the system like some of their larger bretheren. I think it’s more just neglect and inertia – an institutionalized inability to make any meaningful change.

Just in case it isn’t perfectly obvious to anyone, here are the top five reasons people are dropping their landlines:

1. They aren’t portable.  Every time any company tried to come out with a method to let people take their phones with them over even a moderately short distance (more than  a city block or so), the phone companies yanked the chain of the FCC and made sure that things like long range cordless phones never saw the light of day.  The big phone companies probably thought they’d be the only provider of wireless phone service, and that there would be little or no competition from here to eternity.  They were wrong, and as competition brought prices down, it made cell phones far more affordable.  At that point, many people started to wonder – if I’m using my cell phone most of the time anyway, why should I also be paying for a landline?  Sure, there are reasons one might want to do so, but for many folks none of them are very compelling.

 

2. There are extra charges for long distance, and in some places, for local calls.  If the phone companies would have had the least bit of foresight, they’d have realized that people were rebelling against long distance charges.  They were using alternative long distance carriers, and making calls on their cell phones during the “free” hours.  When the Internet came along, they started using VoIP to avoid toll charges.  The phone companies could have responded to this by offering wider local calling areas and “free long distance” hours (say midnight to 8 AM and on weekends at first, gradually expanding the free hours to meet the competition) but they didn’t.  In fact, not only did they not do that, but in some cases they actually started raising toll rates again, after people had gotten used to seeing them decrease over time. They never figured out that many people hate meters, and would actually pay a bit more just to not have a meter.

 

3. There are extra charges for “custom calling” features and other services – and the charges weren’t at all relative to the costs of providing the service.  A couple bucks a month for touch tone? A charge for not publishing your address and phone number in a directory? $6-$8 per month for Caller ID? These and other charges were simply outrageous – it cost the phone company little or nothing to provide these types of services, but they saw them as cash cows, and thought their customers were too stupid to realize they were being gouged.  What could have been a public relations bonanza – constantly adding new features and service at little or no extra charge (something that almost certainly would have happened in a truly competitive environment) was replaced by a philosophy of pure greed, where the idea was to gouge the customer for every nickel and dime they could get.  It was stupid to ever treat customers that way, but it was especially idiotic to keep doing it when the cell phone companies (and later the VoIP companies) offered all these features and more at no additional monthly charge.

 

4. They are redundant.  When, because of the items listed above, people started making more use of cellular (and, in some cases, VoIP) service, it suddenly occurred to them that there is really no need to pay for essentially the same service from two different providers – especially when one of the providers had been overcharging them, giving them marginal to poor customer service, and basically taking their customers for granted for years.  For many years, and even today in some cases, the landline companies still approcah customers as if “you need us more than we need you.” I’m old enough to remember when phone company representatives actually threatened people with prison (or at least the cutoff of their phone service) for buying and hooking up their own extension telephone, thereby depriving Ma Bell of a monthly rental fee that actually paid for the phone in about 6-8 months.  As Lily Tomlin’s character “Ernestine” used to say, “We don’t care. We don’t have to. We’re the phone company!” So when people started to realize that it was silly to pay for essentially the same service from two or more providers – something that’s only going to accelerate given the present economic conditions – guess which one is going to get the boot.

 

5. They just aren’t cool anymore.  Landline telephones are fast becoming like a spitoon in the living room – something you just don’t see anymore, particularly in residential settings (for those of you that are young enough to have no idea what a spitoon is, just remember that in your grandparents’ or great-grandparents’ generation, it was a lot more socially acceptable to chew tobacco than it is today, which is probably why so many older people have false teeth.  Anyway, they needed someplace to dispose of the excess saliva that tended to build up while chewing – hence, the spitoon.  And you thought ash trays were disgusting!). Watch TV or any recent movie – unless they are showing an era of times gone by, about the only place you will see landline phones are in an office-type setting.  If you’re in your mid-20’s to mid-30’s, think about when you were a teenager – would you ever have seen a teenager on TV haul out an old style record player and spin a few tunes?  Maybe on “Happy Days”, but not in any show set in the then-current era.   Well, look at today’s shows – how often do you see a modern teenager (or adult, for that matter) use a landline telephone, especially at home?  The media has always helped set the trends for the current generation, and landline phones just aren’t where it’s at anymore (neither is the expression “where it’s at”, but at my age I can get away with using it!).

Any one of these things by itself would not be insurmountable – but right now, in the current economic climate, it’s just a “perfect storm” of reasons for people to dump their landlines.  And it’s not necessarily that every one of the defectors really hate the idea of the telephone itself – after all,  a not-insignificant number will replace their landline with some type of VoIP service – it’s just that when you put all the above together there no good reason to keep a landline phone.  Even the oft-repeated mantra of the landline diehards, that in an emergency the landline phone will be the only phone that still works, was disproven during Hurricane Katrina, where it turned out that the only thing that still worked in downtown New Orleans was VoIP.

Thing is, the phone companies were stupid.  They took their customers for granted, abused them and overcharged them, and now the chickens are coming home to roost.  And what other big industry is guilty of this? Yeah, I know, the banking industry, but forget them for a moment – who else is guilty of treating their customers like dog poo? That would be certain cable companies, of course.  They just keep raising rates and acting like they are the only game in town for TV and Internet access.  Well, they haven’t been the only game in town for TV for many years (and yet their rates keep climbing) and even if they are the only Internet provider in a given area today, I can guarantee that competition will be coming in that area as well – maybe not for a decade or two in some of the more remote areas, but it will come.  The big cable companies would be well advised not to make the mistakes the big phone companies have made, but I suspect that (as is the case in so many American corporations) the current executives only care that things don’t go completely in the crapper while they are in charge, but what happens after they retire is of little concern to them. Is it possible that, in 15 to 30 years or so, someone will be writing an article like this one, analyzing the reasons that people are giving up their cable service en masse?