Re: Will the Phone Industry Need a Bailout, Too? - Bits Blog - NYTimes.com

[David Farber <dave () farber net>]

Begin forwarded message:

From: "David P. Reed" <dpreed () reed com>
Date: May 11, 2009 2:06:46 PM EDT
To: dave () farber net
Cc: ip <ip () v2 listbox com>
Subject: Re: [IP] Re:   Will the Phone Industry Need a Bailout, Too? -  
Bits Blog - NYTimes.com

In Nynex territory, they did not "overbuild" copper. They instead  
built out minimalistic fiber plant to support the growth in landlines,  
creating a network based on SLC's concentrating phone lines into 64kb/ 
sec digital channels carried over the absolute minimum that could be  
carried over a single fiber from the SLC cabinet.

Thus, as phone lines are dropped, copper does not become available for  
DSL.  It becomes available for 64 kb/sec (0.5 ISDN or one digial POTS)  
channel per line dropped.

That's NYNEX, now Verizon in the NewEngland NYC area.   To get High  
Speed Internet or triple play, you need new plant.  Yeah, the old  
stuff could be "rented", but it ain't gonna deliver much value.

Worse, the rental of the copper would have to support plant  
maintanence, which is a MAJOR cost.

I'd like to see real data rather than handwaving about how much the  
copper is worth.  I think it probably is not economic.


David Farber wrote:
> Begin forwarded message:
>
> *From: *Brett Glass <brett () lariat net <mailto:brett () lariat net>>
> *Date: *May 11, 2009 11:51:12 AM EDT
> *To: *dave () farber net <mailto:dave () farber net>, "ip" <ip () v2 listbox com 
>  <mailto:ip () v2 listbox com>>
> *Subject: **Re: [IP] Will the Phone Industry Need a Bailout, Too? -  
> Bits Blog - NYTimes.com*
>
> > http://bits.blogs.nytimes.com/2009/05/08/will-the-phone-industry-need-a-bailout-too/?emc=eta1
>
>
> The Bells don't need a bailout. What they need to do is recognize  
> that their copper plant  which they did their best to keep to  
> themselves despite the Telecommunications Act of 1996  has the most  
> value as rental property rather than as part of a vertically  
> integrated monopoly.
>
> Think about it. That copper plant was overbuilt back in the days  
> when Internet access was mostly dialup and many households had two  
> or even three phone lines (voice, modem, FAX). There’s now tons of  
> unused copper hanging on poles and buried in the ground, and while  
> copper has gone up in price it is still not worth the labor to dig  
> it up or rip it down and recycle it.
>
> Rather, the best thing to do is rent it.
>
> Under continued financial pressure, and perhaps with a good push in  
> the right direction, the ILECs may find that it is to their best  
> advantage to do what Congress failed to force them to do via  
> legislation: lease their copper at attractive prices. And this, in  
> turn, will spur innovation. All we need to do is get the ball  
> rolling. The rest will happen by itself.
>
> --Brett Glass
>
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