Why are Internet and phone companies so closely related? How has their relationship changed over the decades?

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Why are Internet and phone companies so closely related? How has their relationship changed over the decades?

In: Technology

Back in the days of Dial-Up internet the phone lines were the internet lines. The signals went over the same wires.

With Broadband they are now different wires, however the phone companies are good at connecting houses with wires and own the infrastructure to do it so they are still the internet providers.

Over the last 30 years the internet has evolved from using the phone line system to connect homes (dialup), to being offered with cable TV services, to being offered exclusively over cable or fiber-optic. In the same span of time the phone system has gone from connecting every home with dedicated phone lines, to competing with cable services and finally being usurped by cable services.

In order for the internet to function, there has to be infrastructure to support it. When the internet was in it’s infancy in the 90’s, using the phone line infrastructure that was already in place made sense. However, the phone line system was never designed to transmit data. Internet modems were developed as a “hack” to convert audio signals to digital signals and vice-versa. As the capacity and capability of the internet grew, the two copper wires designed solely for transmitting one phone call at a time became inadequate and another solution was needed.

Cable television providers in the late 90’s realized their infrastructure was far more suitable to provide internet service, despite being designed to transmit video. Cable television has the ability to provide multiple television channels through a single cable, so providing internet service as an additional “channel” was possible with the addition of a cable modem, which could interpret the signal on the internet “channel” as data understandable to a computer.

Starting in the mid-2000’s cable television providers began converting their analog cable television systems to digital systems to pack more channels and to provide faster internet service. Around the same time, VoIP (Voice Over IP) services began to crop-up. VoIP services allow audio to be sent over the internet as a digital signal instead of an analog signal on traditional phone line. This spelled the end for traditional phone services for a few reasons. 1) A VoIP service provider does not have to contend with the cost of maintaining phone lines. Their service works as long as you have internet access. 2) VoIP has the ability to transmit several calls simultaneously on the same line. Besides the reduced audio quality (which would be quickly rectified with increasing internet speeds) VoIP could be offered for much cheaper than a traditional phone line. Eventually, cable television providers realized they could develop VoIP software and offer it as a service alongside their cable television and internet packages.

With the ability to develop and offer phone service cheaper and bundle it with cable television and/or internet services, dedicated phone lines have become more and more obsolete over the last 10 years. Over the last 20 years, cable service providers have acquired traditional phone systems through buy-outs and mergers. Many lines have been entirely replaced with cable services, but much of the traditional phone system is still maintained in places where cable service are not yet developed.