September 19, 2009 5 Comments
The FCC says US telephone companies have incurred a 26% increase in the cost of annual maintenance on traditional copper telephone lines over the past 5 years. Verizon makes 25% better margin on wireless phone than “land line” phones. FiOS is making it possible for Verizon to get into the high value video and cable television industry with a next-generation fiber optic infrastructure.
So why would anybody find Verizon CEO Ivan Seidenberg’s announcement at a Goldman Sachs investor conference that “his company is simply no longer concerned with telephones that are connected with wires” a surprise?
Well, there are still many people on the street who believe copper “land Lines” offer better quality, security, and value. There are those who believe it is necessary to continue pumping money into technologies which are expensive to maintain, and offer little additional value to subscribers.
There are those who believe expansion of high performance wireless infrastructure such as LTE (long term evolution) and 4G (4th Generation Wireless) will not meet the needs of individual subscribers in both rural and urban areas.
Of course, they are wrong. Copper lines still fail, and are definitely location sensitive. A person with a heart condition will have a much better chance sending the alarm with a wireless device than a fixed line copper phone, so the more we dig into the copper argument the more it appears folks still are simply reluctant to embrace or endorse change. And change is needed in the United States.
We lag the industrialized world in broadband Internet deployments and availability. LTE/4G/FiOS all support and deliver broadband. Verizon is aggressively moving ahead on all broadband deployments. This includes broadband wireless to rural areas normally not available through either copper or in many cases cable television. In the United States (and most of the world) telephone users are either using low cost mobile phones, or using Internet phones (VoIP) on their home cable TV, or even in many cases wireless Internet connections.
So why is it surprising or concerning to anybody that Verizon is turning its back on their copper infrastructure, and focusing their capital and operational investments on a next-generation of technology? Is it better to spend more money maintaining old copper outside plant infrastructure, or is it better to spend that money reinforcing deployments of high performance wireless infrastructure and fiber optic FiOS technology?
Seidenberg added that “Video is going to be the core product in the fixed-line business.” Yes, thinking of a cable coming into your home as a “telephone line” is no longer an acceptable categorization. The telephone line is gone. Never to return. It is obsolete. We need to delete that from our mental SD chip, and reload with “Wired Humans Version 2.” Cables coming into the home and business are not for telephones, they are for the whole three dimensional concept of communications.
The answer for both the American consumer and for Verizon is clearly to reduce the operational expenses of supporting copper telephone lines, and start forcing the adoption of technologies that are better, cheaper, and offer much more service opportunity (such as high speed Internet access, video/cable TV, additional interactive communications services <such as video conferencing and video telephony>).
Americans need to applaud the courage of Mr. Seidenberg and Verizon to take this aggressive stand on new service and technology delivery.
John Savageau, Long Beach