7 ms·

Pardon the possibly ignorant question, but what do the telecom companies have to gain by destroying their own infrastructure? I feel like I'm missing something

Pardon the possibly ignorant question, but what do the telecom companies have to gain by destroying their own infrastructure? I feel like I'm missing something about the US telecom market here. 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?

bm1362 9y ago
It’s not destroying the infrastructure, it’s abandoning it. The article states that prior to this ruling they’re required to maintain or replace with comparable functionality for existing copper customers. This ruling let’s them abandon them altogether from what I gathered.
- maltalex 9y ago
  Ok, but there are still paying customers on the end of that infrastructure. Are they not profitable enough?
  - deleted 9y ago
    [deleted]
  - Rovanion 9y ago
    Since they have local monopolies they can trust they will regain the user but on infrastructure that is cheaper to maintain.
  - andrewtbham 9y ago
    My understanding is rural access is often unprofitable. https://en.wikipedia.org/wiki/Universal_Service_Fund https://en.wikipedia.org/wiki/Universal_Service_Fund
    - imglorp 9y ago
      Yet we've been paying into this fund decades, which was supposed to pay for rural access. Now, Relieving the telcos of this obligation despite them not completing universal access amounts to corporate welfare for those poor starving giants. Then there's E911. 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. This is also a health and safety issue.
      - fencepost 9y ago
        The sparsely populated rural western states will lose the ability to call 911, but maybe it won't matter so much - with a big percentage of those small rural hospitals that depend on part on Medicaid money going under, anyone needing emergency medical treatment is probably going to be looking at a minimum time of 2-3 hours anyway so what's an extra hour or two? But you can count on one thing: "Thanks, Obama!"
  - abalashov 9y ago
    No, not past a certain point of diminishing returns.
  - sitkack 9y ago
    Things that are utilities need to widely available. Power, electricty, water, etc. We grant monopoly status to corporations in exchange for fixed profits and guaranteed service even where not profitable. If we didn't do this, they would have block by block pricing and wouldn't serve areas for arbitrary "reasons" 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.
    - gjjrfcbugxbhf 9y ago
      Maybe they should compete for the service contracts - but even then cost benefit should compare with insourced provision.
- Someone 9y ago
  I would guess mining the copper would be worth it, unless this causes a huge price drop (and maybe not even then. https://en.wikipedia.org/wiki/Metal_theft https://en.wikipedia.org/wiki/Metal_theft: ”Some have argued that the "genie is out of the bottle" now and drops in commodity prices will not result in corresponding drops in thefts. In fact, it is possible that thefts may actually increase to compensate for the loss in value.[citation needed]”
saas_co_de 9y ago
In the U.S. rural telecoms access has always existed because of government mandates supported in part by government subsidies and taxes. It would definitely be more profitable to drop support for large parts (land mass, not population) of the U.S. entirely.
- maltalex 9y ago
  So the maintenance costs are driving this?
  - VectorLock 9y ago
    The article says it all. They want to eliminate their rural workforce. When you have a massive area, sparsely populated, you have to over staff because it takes so long for a technician to drive from one job to another.
- deleted 9y ago
  [deleted]
- abalashov 9y ago
  > In the U.S. rural telecoms access has always existed because of government mandates supported in part by government subsidies and taxes. 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.
ehead 9y ago
Maintenance fees are likely to be high, especially considering that the companies are required to keep their copper lines maintained until no customers want copper service anymore. In rural areas, this could mean keeping miles and miles of line maintained for a single customer. Selling the copper from the wires also could be quite lucrative.
- jessaustin 9y ago
  There's a creek on my farm that has several of those thick 25-pair cables running for hundreds of feet, mostly buried below gravel but visible occasionally. None of it is hooked up, since some genius decided that it was bad to run expensive cable through constantly changing environments like creeks. If the copper were that valuable, wouldn't the phone company have pulled these up by now?
droopybuns 9y ago
When you hear telco execs talk about “the copper plant,” they are referring to all of the underground copper. This wire is laid out in sheathed bundles of excess pairs that can be used to replace a pair that has a short. When they eventually run out of pairs, the only solution is to dig trenches and replace bundles. 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.
- microcolonel 9y ago
  > If we hadn’t wasted the trillions of dollars on the last 16 years of war War is actually one of the cheaper parts of the budget.
  - pessimizer 9y ago
    And the least productive.
    - erikpukinskis 9y ago
      It’s extremely productive if you include the resources we are able to patriate into the private sector after the wars.
  - cperciva 9y ago
    That depends on (a) if you're looking at only the supplemental war funding, or if you include a share of the DoD baseline budget as well; and (b) if you're looking at gross expenditures (in which case social security is the highest expense) or net expenditures (in which case social security is currently "self-funding" through its earmarked payroll tax).
  - jfoutz 9y ago
    The expensive parts, have specific taxes to pay for specific programs. 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.
rayiner 9y ago
Much of this infrastructure is in more rural areas, which were never profitable. All that copper was strung up in an environment where high long-distance charges were used to subsidize service in rural areas. 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_reports/2016/downloads/Verizon-AnnualReport2016.pdf 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.)
- busterarm 9y ago
  There are a great many businesses, even in NYC and even in the high-tech industries here that absolutely depend on copper infrastructure. 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.
  - buryat 9y ago
    it's not about big cities, it's about unprofitable rural areas. The copper wire will be kept alive as long as it brings money.
    - agumonkey 9y ago
      I suppose if cities copper ever get removed it would be for fiber replacement.
pipio21 9y ago
You can put tens of thousands of copper lines communications in just a single optical cable. 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.
- abalashov 9y ago
  A few counterpoints: - 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. :-)
- vvanders 9y ago
  Yes, there's some advantages however some services don't work(alarms, etc) on fiber.
  - jessaustin 9y ago
secabeen 9y ago
It will so not surprise me if in 10 years the TelCos are clamoring for billions in "rural connectivity funding" from the feds to put in fiber runs to rural areas currently adequately covered by the copper they are pulling out.
- arcbyte 9y ago
  Well let’s be clear, the copper in rural areas is not adequate for anything except 1930s voice connectivity.
  - jessaustin 9y ago
    We're pretty happy with our DSL: 25/4 or thereabouts.
- mattnewton 9y ago
  If that’s what it takes to update it, so be it. I think greater internet connectivity to rural areas would solve a lot of metro-area congestion and be an economic activity multiplier.
  - abalashov 9y ago
    I think the parent was implying that they'd take the hand-out without delivering, which is extremely characteristic of what they've done with USF and other regulatory initiatives to shovel money into an open pit^H^H^H^H^H^H^H^Hincumbent pockets.

bm1362 9y ago

It’s not destroying the infrastructure, it’s abandoning it. The article states that prior to this ruling they’re required to maintain or replace with comparable functionality for existing copper customers. This ruling let’s them abandon them altogether from what I gathered.

maltalex 9y ago
Ok, but there are still paying customers on the end of that infrastructure. Are they not profitable enough?
- deleted 9y ago
  [deleted]
- Rovanion 9y ago
  Since they have local monopolies they can trust they will regain the user but on infrastructure that is cheaper to maintain.
- andrewtbham 9y ago
  My understanding is rural access is often unprofitable. https://en.wikipedia.org/wiki/Universal_Service_Fund https://en.wikipedia.org/wiki/Universal_Service_Fund
  - imglorp 9y ago
    Yet we've been paying into this fund decades, which was supposed to pay for rural access. Now, Relieving the telcos of this obligation despite them not completing universal access amounts to corporate welfare for those poor starving giants. Then there's E911. 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. This is also a health and safety issue.
    - fencepost 9y ago
      The sparsely populated rural western states will lose the ability to call 911, but maybe it won't matter so much - with a big percentage of those small rural hospitals that depend on part on Medicaid money going under, anyone needing emergency medical treatment is probably going to be looking at a minimum time of 2-3 hours anyway so what's an extra hour or two? But you can count on one thing: "Thanks, Obama!"
- abalashov 9y ago
  No, not past a certain point of diminishing returns.
- sitkack 9y ago
  Things that are utilities need to widely available. Power, electricty, water, etc. We grant monopoly status to corporations in exchange for fixed profits and guaranteed service even where not profitable. If we didn't do this, they would have block by block pricing and wouldn't serve areas for arbitrary "reasons" 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.
  - gjjrfcbugxbhf 9y ago
    Maybe they should compete for the service contracts - but even then cost benefit should compare with insourced provision.
Someone 9y ago
I would guess mining the copper would be worth it, unless this causes a huge price drop (and maybe not even then. https://en.wikipedia.org/wiki/Metal_theft https://en.wikipedia.org/wiki/Metal_theft: ”Some have argued that the "genie is out of the bottle" now and drops in commodity prices will not result in corresponding drops in thefts. In fact, it is possible that thefts may actually increase to compensate for the loss in value.[citation needed]”

saas_co_de 9y ago

In the U.S. rural telecoms access has always existed because of government mandates supported in part by government subsidies and taxes. It would definitely be more profitable to drop support for large parts (land mass, not population) of the U.S. entirely.

maltalex 9y ago
So the maintenance costs are driving this?
- VectorLock 9y ago
  The article says it all. They want to eliminate their rural workforce. When you have a massive area, sparsely populated, you have to over staff because it takes so long for a technician to drive from one job to another.
deleted 9y ago
[deleted]
abalashov 9y ago
> In the U.S. rural telecoms access has always existed because of government mandates supported in part by government subsidies and taxes. 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.

ehead 9y ago

Maintenance fees are likely to be high, especially considering that the companies are required to keep their copper lines maintained until no customers want copper service anymore. In rural areas, this could mean keeping miles and miles of line maintained for a single customer. Selling the copper from the wires also could be quite lucrative.

jessaustin 9y ago
There's a creek on my farm that has several of those thick 25-pair cables running for hundreds of feet, mostly buried below gravel but visible occasionally. None of it is hooked up, since some genius decided that it was bad to run expensive cable through constantly changing environments like creeks. If the copper were that valuable, wouldn't the phone company have pulled these up by now?

droopybuns 9y ago

When you hear telco execs talk about “the copper plant,” they are referring to all of the underground copper. This wire is laid out in sheathed bundles of excess pairs that can be used to replace a pair that has a short. When they eventually run out of pairs, the only solution is to dig trenches and replace bundles. 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.

microcolonel 9y ago
> If we hadn’t wasted the trillions of dollars on the last 16 years of war War is actually one of the cheaper parts of the budget.
- pessimizer 9y ago
  And the least productive.
  - erikpukinskis 9y ago
    It’s extremely productive if you include the resources we are able to patriate into the private sector after the wars.
- cperciva 9y ago
  That depends on (a) if you're looking at only the supplemental war funding, or if you include a share of the DoD baseline budget as well; and (b) if you're looking at gross expenditures (in which case social security is the highest expense) or net expenditures (in which case social security is currently "self-funding" through its earmarked payroll tax).
- jfoutz 9y ago
  The expensive parts, have specific taxes to pay for specific programs. 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.

rayiner 9y ago

Much of this infrastructure is in more rural areas, which were never profitable. All that copper was strung up in an environment where high long-distance charges were used to subsidize service in rural areas. 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_reports/2016/downloads/Verizon-AnnualReport2016.pdf 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.)

busterarm 9y ago
There are a great many businesses, even in NYC and even in the high-tech industries here that absolutely depend on copper infrastructure. 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.
- buryat 9y ago
  it's not about big cities, it's about unprofitable rural areas. The copper wire will be kept alive as long as it brings money.
  - agumonkey 9y ago
    I suppose if cities copper ever get removed it would be for fiber replacement.

pipio21 9y ago

You can put tens of thousands of copper lines communications in just a single optical cable. 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.

abalashov 9y ago
A few counterpoints: - 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. :-)
vvanders 9y ago
Yes, there's some advantages however some services don't work(alarms, etc) on fiber.
- jessaustin 9y ago

secabeen 9y ago

It will so not surprise me if in 10 years the TelCos are clamoring for billions in "rural connectivity funding" from the feds to put in fiber runs to rural areas currently adequately covered by the copper they are pulling out.

arcbyte 9y ago
Well let’s be clear, the copper in rural areas is not adequate for anything except 1930s voice connectivity.
- jessaustin 9y ago
  We're pretty happy with our DSL: 25/4 or thereabouts.
mattnewton 9y ago
If that’s what it takes to update it, so be it. I think greater internet connectivity to rural areas would solve a lot of metro-area congestion and be an economic activity multiplier.
- abalashov 9y ago
  I think the parent was implying that they'd take the hand-out without delivering, which is extremely characteristic of what they've done with USF and other regulatory initiatives to shovel money into an open pit^H^H^H^H^H^H^H^Hincumbent pockets.