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One thing that I never see discussed whenever this type of topic comes up is how badly managed the traditional telecoms have been. My first job out of college b
by zw123456 11y ago
One thing that I never see discussed whenever this type of topic comes up is how badly managed the traditional telecoms have been. My first job out of college back in the 80's was with Bell Labs and I worked on a task force to look at how to replace all the old electro-mechanical switching offices. The team I was on came up with the idea to use fiber optics to centralize to one or two main CO's for each state. Traditionally, the way the telecoms set up their networks is they have a CO (Central Office) in each neighborhood, the reason was because of the old analog technology from the early 1900's, the signal simply could not travel very far so there needed to be a station within 5 to 10 miles from the customer. Of course there is no need for that with fiber. Our plan would have saved billions, but they instead decided to just over lash the fiber to existing copper runs and replace the electro-mechanical switch with a digital office. It was a huge blunder in my view. If you look at which companies make money and which loose money in telecom, you can easily see the relationship, cable co's, CLEC's, mobile operators all use the centralized approach, one or two main offices per state and fiber to backhaul to those offices, the losers, the legacy telco's have 100's of CO's for each offices of the profitable companies. It is obvious to see in operational costs but they are completely blind to it. I would put this into the category of "Inventor's dilemma" type of problem.
- Aloha 11y agoThere was a significant amount of flattening in the initial digital rollout, between SLC-96 and 5ESS remotes (GTD5 and DMS all have similar constructs) they did eliminate some very very small suburban offices. But there was not really another round of office consolidations after the last big round of mergers - with the replacement of the legacy TDM hardware with newer soft switches however this is happening. This article however touches on an issue unique to Verizon, which is they're letting their copper plant rot in the field, as a way to force customers off of it (the railroads did much the same thing with passenger service in the early 50's) when Frontier has bought a former GTE/Verizon area, they usually have to hire a bunch more in the way of field techs, and spend millions on OSP upgrades and repairs - to the point that additional FiOS expansion in the immediate future is unfeasible due to cost. The future is going to have a mix of wireline and wireless - and some of it will still be copper, I still believe the best architecture for the future is FTTN (fiber to the node) with a node every block (or 3-400 yards) allowing for sub 1000 ft loops. I still think this offers the best price/performance ratio.
- zw123456 11y agoAgreed, at this point the wired services are not profitable and they want to let the plant rot as you said. I agree, there needs to be a mix of fiber and wireless. The emphasis on wireless is because it is seen as being more profitable, however that is eroding quickly. Perhaps Google fiber and similar initiatives will spark some more activity around FTTH, FTTN.
- Aloha 11y agoI actually disagree that wireline services are not profitable, they are profitable, generate a very stable rate of return - but they are not generating the rate of return, and more importantly growth rates the market expects. Because of this, Verizon is trying to starve them to make its balance sheet look better - which in the short term works, but it will also hasten the demise of what is a somewhat lucrative revenue stream. FTTN Makes the most sense in dense and semi dense urban and suburban areas - FTTH/P makes more sense in very rural places, I'm seeing movement on FTTP by CenturyLink, Frontier seems very interested in expanding its existing FTTH footprint, but is not doing so yet.
- zw123456 11y agoThat's probably about right, the margins are just not what Wall Street demands these days.
- Aloha 11y agobecause its so capital intensive, I don't think there is anything you can do to make the rate of return better either. That's the trouble, its a good stable business, but no longer in vogue.
- daodedickinson 11y agoThey aren't blind to that, they and their superiors (governing class) can't see a way to reemploy the excess males that would generate.