Sunday, October 10, 2004

Phone Line Alchemy: Copper Into Fiber

The New York Times runs an article this morning that clearly lays out a point we've been making on these pages for a while: BellSouth, with its brethren baby bells, is in a long term bind. Their business is dying and their competition in the land line business, cablecos like Cox, are moving in for the kill as they begin to offer phone service. The only way to stay in the game locally—as well as nationally is to move to fiber in a final and full way. The article makes the point succienctly:

The new offering is part of a multibillion-dollar bet by Verizon and the other Bell companies. They are gambling that by going door to door to replace century-old copper wire technology with high-speed fiber optic lines, they can hang onto their most valuable asset: a direct line into the home of each customer.

Verizon and the other regional Bell companies are losing customers by the millions as people drop their old phone lines in favor of cellphones, e-mail and ever cheaper phone services from cable companies.

[...] Fiber, which carries digital information as pulses of light rather than electric current, is not new. For years, phone carriers have been laying fiber between their municipal switching stations, on long-distance routes and across oceans. But only now are the regional Bell companies, having lost 16.3 percent of their local-line customers in just the last four years, laying fiber to residences.


What this article misses is that while some Baby Bells, like Verizon, are grasping the nettle, and seem willing to begin the expensive push to the home that might allow them to survive, others like BellSouth and SBC are not. BellSouth with its massive commitment to wireless is not announcing signficant fiber to the home projects. Perhaps it simply can no longer afford to; the commitment to wireless is drying up available capital and their dropping credit rating will make it more difficult yet to raise the necessary money.

Without municipal providers of bandwidth like LUS whole regions of the country might well move from the landline duopoly of cable and telephone to a situation is which the cable slowly works its way into the same monoopoly it has over the provision of cable TV in the realms of telephony and internet provision. That is clearly, IMHO, what Cox is working toward with it promised launch of VOIP locally.

I think I join much of Layatte when I say that is not an end that is devoutly wished.

Go LUS!

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