AT&T is joining Verizon Wireless in an effort to even out the costs of wireless and landline services. AT&T has requested that the Federal Communications Commission approve replacing legacy circuit-switched or public-switched telephone networks (PSTN) with broadband and IP-based connections.

AT&T's request comes after the FCC issued a public notice on Dec. 1 asking for input on what it would take to move from the legacy system to Internet protocols.

"In identifying the appropriate areas of inquiry, we seek to understand which policies and regulatory structures may facilitate, and which may hinder, the efficient migration to an all-IP world," the FCC wrote. "In addition, we seek to identify and understand what aspects of traditional policy frameworks are important to consider, address and possibly modify in an effort to protect the public interest in an all-IP world."

At the Core

At the core of AT&T's argument to replace the worldwide telephone network that carries analog data is that the company is losing landline subscribers each day as more people rely solely on wireless devices. Already 99 percent of Americans have wireless coverage, while 700,000 landline subscriptions are ending each month, according to AT&T.

Between 1999 and 2007 the number of broadband connections rose from less than three million to more than 121 million, according to a report by the FCC. Today, those services are available to nearly 90 percent of American households, and 66 percent of those households subscribe to broadband service.

While the majority of households are making the switch, others will not be prepared to make the change.

"More and more folks are relying on their cell phones or some kind of VoIP service at home, but it's going to be hard to convince an older generation to give up that familiar dial tone that often works even when nothing else does and the security of traditional 911 services," said Michael Gartenberg, a vice president at Interpret. "While we may see requests like this as some providers would like to put those businesses into more lucrative things, it's not likely to happen soon."

Canceled Service Equals More Cost

Consumers who cancel their landline and rely solely on wireless devices are saving money, but are also pushing the cost of service to others much higher.

"With an outdated product, falling revenues, and rising costs, the POTS [plain old telephone service] business is unsustainable for the long run," AT&T wrote in its letter to the FCC.

As a result, AT&T is asking the FCC to come up with a deadline for operators to transition from the legacy network to broadband.

Removing Disincentives

The FCC already has been tasked by Congress to create a national broadband plan that will make broadband available to 100 percent of the nation.

Meeting the goal of universal broadband access has been achieved by private investment from network operators, who have already brought broadband access to 90 percent of Americans, AT&T argued.

In order to bring broadband to the remaining percentage of Americans, AT&T argues that the FCC must remove disincentives to private investment and encourage operators to extend access to underserved areas.

Some observers say this isn't an altruistic effort on AT&T's part to bring people connectivity. Instead, they say, it's the company's way of lining its pockets with revenue by revamping the Universal Service Fund to which all telecommunications providers contribute.