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

[David Farber <dave () farber net>]

http://bits.blogs.nytimes.com/2009/05/08/will-the-phone-industry-need-a-bailout-too/?emc=eta1


Congress has asked the Federal Communication Commission to develop a  
national policy for broadband deployment. But it might be more  
important to think through how the country will handle the aging and  
increasingly less relevant copper phone network.

You can see the problem building every quarter, when the phone  
companies report they serve ever fewer landlines. They are mainly  
losing customers to cable companies, which offer competing broadband  
and voice services that make copper phone lines unnecessary. More  
people are also deciding to abandon landlines for cellphones.

AT&T lost 12 percent of its landlines over the last year. Verizon,  
which is converting some customers to fiber, lost 10 percent. The  
story is similar at smaller phone companies like Qwest, Embarq,  
Fairpoint and Frontier, but these companies don’t have the wireless  
business to help bail them out.

As all these companies lose wireline revenue, the costs of maintaining  
the wires strung on poles and dug through trenches is not falling  
nearly as quickly. It now costs an average of $52 a year to maintain a  
copper phone line, up from $43 in 2003, largely because of the  
declining number of lines, according to Larry Vanston, president of  
research firm Technology Futures, as quoted onGigaOm. There are more  
reports, such as this one about Verizon, that the telcos are skimping  
on maintenance of their copper wires.



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