Democracy & Technology Blog Wake up, Oregon!
From the Oregonian,
Frontier’s inexperience is a concern, Jenks said. But if Verizon doesn’t want to be here, perhaps Oregon will be better off.
“Sometimes,” he said, “it’s to your advantage to get rid of an owner who doesn’t want to own something.”
Who wouldn’t want to own something that makes a profit, unless… it doesn’t make a profit?
Oregon’s problem is that it has driven the profit out of the telephone business, so the industry’s innovation leader — Verizon — is getting out.
Nationwide, Verizon is investing $28 billion in fiber to the home, but it needs to earn a competitive return on investment. That isn’t possible in Oregon, which aims to align the price consumers pay for communications services with the bare cost providers incur to offer the service.
That’s not a bad strategy, from a consumer perspective, if the network is already in the ground, it can’t be removed and it doesn’t need to be upgraded.
But this is where the Oregon Public Utility Commission and the Citizens Utility Board have missed the ball.
The network must be upgraded — in a major way — if Oregon wants to keep up with the rest of the nation and the world.
Investment will flow to where it can earn a profit. If investment can’t earn a profit in Oregon, it will go somewhere else.
That’s why Verizon is selling its Oregon properties to Frontier. Verizon can’t earn a competitive profit on its investment in Oregon compared to other states. Oregon doesn’t have population density or a favorable regulatory climate.
Frontier is an excellent company. But of course it isn’t Verizon — the leader in fiber optic deployment.
It’s Oregon’s choice.
Although the Verizon-Frontier sale has already been announced (but not yet approved by regulators), Oregon could still position itself as a hospitable environment for private enterprise in the telecommunications space.