Digital Voice Telephony and the Economics of Information Delivery

The telephone industry (and cellphones in particular) touch virtually all phases of U.S. consumer and business activity. The term common carrier is used to describe those companies engaged in the business of message delivery on a point-to-point or point-to-multipoint basis. Common carriers offer their service on a nondiscriminatory basis to anyone who is willing to pay for it.

In principle, they do not interfere with the content of the message. They provide the network facilities capable of delivering traditional voice and video communication to the end user. Common carriers include incumbent local exchange carriers (ILECs) such as Verizon and AT&T as well as cellular telephone providers like Verizon, AT&T, Sprint, and T-Mobile. Common carriers can also include international satellite service providers.

Basic Telephone Service

Today, basic telephone service includes both local and long-distance telephone communications. All of the major ILECs offer combined local and long-distance telephone service packages for a flat rate. Basic telephone service is also offered by competitive local exchange carriers (CLECs)) who may operate a private network and/or function as resellers of basic telephone service at a discounted rate.

Enhanced Information Services

As telecommunications requirements become more complex, both residential and business customers are willing and able to spend more of their discretionary income on enhanced information services. Enhanced information services represent the high growth portion of the LECs’ business. Enhanced information services are also regulated differently from traditional common carrier voice communication. Enhanced information services typically include multichannel television, high-speed Internet access and OTT video streaming services by way of example. Today, the principle of universal telephone service is undergoing a major rethinking in concept and design. The term digital divide can be defined as the gap that exists between people (and countries) who have access to information communication technologies and those that do not.

More and more, there is a tacit recognition that high-speed Internet access has become a universal service requirement for an educated society.