Aren't these companies making a profit on this infrastructure? Are they selling more profitable services and they want users to switch over? Are the maintenance fees that high?
Wireline is costly (and copper is more costly than fiber on an on-going basis). Your business is sitting in the ground depreciating and requires expensive unionized workers to make repairs every time there is a storm, etc. Verizon basically makes no profit on its wireline division despite $31 billion in revenue: https://www.verizon.com/about/sites/default/files/annual_rep... (page 22). At this point, POTS service is probably losing money even in urban and suburban areas. (You need to maintain the copper in an entire neighborhood even if only a few people subscribe to copper phone service.)
The world-renowned midtown hedge fund that I used to work for had a DS1 off a copper trunk that had the payroll system (a circa-2001 Dell Optiplex running Windows 2000) on it as recently as 2008. I assume they aren't now (god, I hope so, but that system hadn't been touched in years when I got there out of extreme fear of breaking it), but that industry was ahead of the technological curve.
A great many restaurants (not everyone is on Seamless...) still rely on copper phone lines for payment processing. I've seen a lot of the pinpads absolutely shit themselves trying to operate on EMTAs/telephony cable modems.
While the unit economics are better because of the density, there are also more subscribers to serve, breeding its own infrastructural complexity. It may be more efficient to do it in cities per wire distance or unit of infrastructure, but there's also just more infrastructure.
For POTS to be economical anywhere, a sizable chunk of the population has to buy it.
I don't know what those tipping points are, but you can be 370% sure the ILECs have calculated this out meticulously.
An optical cable is extremely small, in fact, most of the cable is just mechanical reinforcement.
Tens of thousands of copper fibers does not only means lots of cables with lots of devices that could fail, with lots of interference. It means that if something goes wrong, it it very hard to identify the problem or even to have the space to access the problematic cable.
It also means that what used to take a dedicated culvert now could be done with a single cable. So infrastructure prices go extremely low as you only need to bury a small pipe and you gain a lot of space in old infrastructure.
Copper actually rust if exposed to elements. For it not rusting you need to use things that actually degrade or pollute the environment a lot.
An optical line is as inert as it could be, does not degrade over time, does not have EM interference.
You already have all the necessary optical line infrastructure under roads or in powerlines. The only thing you have to update are the optoelectronics terminals and repeaters.
- While infrastructure does vary, "tens of thousands" of pairs hasn't been a common scenario in a long time thanks to multiplexing. Drag the pairs from each household back to a box with a few SLC96s, send it out the back on a few T1s running over a few pairs, or just one — framed over HDSL. Or multiplexed onto a DS1 signal that is in turn a channel on some much larger TDM aggregate over fibre, like an OC-3 or 12.
- EM interference is still occasionally an issue with copper, but only on the lastest of the last mile. Otherwise, overall local loop transmission has been digital for a long time.
Nothing goes back to the central office as an analog signal, at least not in environments that the telecom industry considers "metro" (90% of the country).
There is some truth to what you say, but there's a lot of 80s-type telephone folklore mixed in as well. :-)
This ruling let’s them abandon them altogether from what I gathered.
Of a bigger concern in rural areas will be losing access to 911. A lot
of homes still keep landlines just for the 911 capabilities. Under the
old rules the carriers had to demonstrate that customers would still
have access to reliable 911, but it seems the carriers can now walk
away without worrying about this.
But you can count on one thing: "Thanks, Obama!"
Yet they still continue to shake the people down. I don't think corporations should run anything last mile. The temptation is just too great.
It would definitely be more profitable to drop support for large parts (land mass, not population) of the U.S. entirely.
Indeed, and the same is true of other places where wireline telephone service is universal or substantially universal.
Wireline telephone service is something that should be thought of as akin to electrification or public transportation. It is unlikely to have happened guided solely by private sector profit imperatives.
Selling the copper from the wires also could be quite lucrative.
It is filthy, expensive work for a feature that no longer generates the revenue that funded the deployment of the national telco network.
The wires will die. It is going to require a different model than those that are on the table to maintain this type of transport. If we hadn’t wasted the trillions of dollars on the last 16 years of war, Maybe we could have afforded a national deployment of fiber.
War is actually one of the cheaper parts of the budget.
War on the other hand, it's just kinda, let's spend a bunch of money and worry about it later. That makes a lot of sense when you're averting genocide or actively under attack. it makes less sense when you're already funding a powerful influential state department that can impose sanctions with strong international support.
You can afford a whole lot of diplomacy for a few billion dollars, but that won't really buy you a lot of war. Also, not so many people die. Which i think is a bonus.
Verizon and other telcos already learned they can get billions in subsidies for building fiber networks, and never follow through with it with no consequences.
https://www.techdirt.com/articles/20131012/02124724852/decad...
At this point I think municipal run ISP utilities are the future we should be shooting for.
It's possible that it's worth more than a 5% cut--in which case it's still a subsidy.
In New York City, a Verizon subsidiary called ECS operates a conduit network under an 1891 franchise. It pays the city a fee based on the assessed value of real estate, about $20 million per year. Verizon pays ECS standardized rates to use the conduit, but the city alleges that ECS sets rates too low, and the shortfall is about $260 million over six years. https://comptroller.nyc.gov/wp-content/uploads/documents/FP0.... Of that, 80% is allocable to Verizon, or about $42 million per year owed to the city.
The franchise fee is 5% of gross. Assuming about one million FIOS households in NYC in the steady state (consistent with Verizon’s uptake rate of about 40% and 2-3 million households passed), plus the average revenue per subscriber of $110 per month, that’s $65 million per year paid to the city.
On top of that, you’ve got to consider the value of build-out requirements. The city forces Verizon to build in neighborhoods that aren’t otherwise sufficiently profitable to justify building in. That’s a concsssion extracted by the city that also must be accounted for, because each house passed that doesn’t subscribe costs Verizon hundreds of dollars. (Going back further in history, this was the quid pro quo between AT&T and governments. My FIOS is run on a pole jointly owned by Verizon and BGE. Is this a subsidy to Verizon? On one hand, the easement is valuable. On the other hand, the pole was inherited from AT&T, who got the easement in return for running a phone line it otherwise would not have, into what used to be farmland.)
New York is also a bit of an odd situation because of ECS. In most places, the power company owns the conduit of the poles, and unlike ECS has no incentive to undercharge for attachments.
https://www.huffingtonpost.com/bruce-kushnick/the-book-of-br...
The RBOCs promised they would roll out fiber, FCC and PUCs promised they would enforce that, and we assumed any of them had any integrity. Whoops! Then, with the 1996 act, RBOCs traded lots of competitive requirements for the right to reconsolidate into Ma Bell (which at this time they have mostly completed, only now with substantial monopoly of the wireless market in addition to that of the wired one). Again we assumed integrity on the part of any of them. More importantly, lots of wealthy investors assumed that. The two decades since then have been a clinic on how a monopolist who owns the regulators can steal billions from the rest of us. "Too bad about all that money you spent setting up that CLEC... You can forget about us obeying (or the regulators enforcing) any of those leasing or interconnection rules... We'll give you ten cents on the dollar for your now-worthless network and customer base."
Is it any wonder that ATT, SBC, VZN monopolized the wireless market? At the very moment that the market was expanding and big infrastructure investments needed to be made, we had just given them hundreds of billions of dollars! Their abuse of the landline market financed their capture of the wireless market. How could anyone else compete with that? More to the point, who would be stupid enough to try, after getting their asses kicked on the wired side, in direct violation of the 1996 Act? The problem with treating changed circumstances as some sort of extenuation for all the broken promises and unenforced laws, is that the changed circumstances were intentionally engineered by Ma Bell, regardless of the lies they told.
Fool us a dozen times, shame on us.
There was never a quid pro quo: deregulation in return for fiber. We deregulated for the same reason everyone else in the western world did: to attract private investment. And we got that in spades—about $1.5 trillion since the 1996 Act. The Internet—the wires and fiber and switches—as we know it was built almost entirely with private money since 1996.
Saying we “gave” ISPs money because we stopped controlling the prices they could charge is extremely disingenuous.
You have read Kushnick. He has whole chapters that are little more than quotes from PUC testimony, RBOC press releases, annual shareholder reports, etc. The quid was most definitely pro the quo. Now who is "disingenuous"?
The stated objective of the 1996 Act was to foster competition. We had about five years during which the first hints of actual competition started to appear, which have steadily disappeared since then. Much of the investment you laud was misinvestment: witness the perennially low returns to building out long-distance fiber throughout the 2000s. Witness the steady consumption of investor-financed firms by the Daughters Bell. In what other industry would it be judged a success that lots of people spent lots of money, but they were eventually driven out of business by the monopoly anyway?
We’re also pretty comparable in price, at least in many places. In the nation’s capital, gigabit fiber is about $80/month, roughly what it costs in London and cheaper than what it costs in Stockholm. Apparently Amsterdam doesn’t have FTTH except in small pockets: https://www.reddit.com/r/Amsterdam/comments/6pv96m/gigabit_i.... The recommended ISP there, for people who can get it, is about the same for 500/500 as gigabit in DC. Where European countries tend to do better is price points for lower service tiers. In London Virgin offers 50/3 for $43/month. If I couldn’t get 50/50 for $40 via fiber, my closest option would be $75 for 75/10 with TV and HBO. These are not categorical differences.
Broadband deployment is largely managed at the local level, so it varies from city to city. Cities that make it cheap and easy to build (Austin, DC, Houston, Atlanta), have options pretty comparable to London, Munich, Paris, etc. Cities that put up roadblocks to development suffer for it.
If anything, having thousands of small ISPs would make it harder for the feds to spy on everyone.
Here's the fun part - you've already been paying for it. The 1996 Telecommunications Act set up a fund that every telecom user in the USA pays into which was supposed to build high-speed services in rural and disadvantaged areas.
> (3) ACCESS IN RURAL AND HIGH COST AREAS- Consumers in all regions of the Nation, including low-income consumers and those in rural, insular, and high cost areas, should have access to telecommunications and information services, including interexchange services and advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas and that are available at rates that are reasonably comparable to rates charged for similar services in urban areas
(PDF warning) https://transition.fcc.gov/Reports/tcom1996.pdf
What actually happened was the telcos used that money to buy their competitors and consolidate the market to where only a few large firms remain (no more "Baby Bells")