Democracy and Technology Blog

Now Verizon pulls the plug

arroba Email

Now Verizon pulls the plug

Saul Hansell at the New York Times reports that Verizon has given up on the landline telephone business

Speaking to a Goldman Sachs investor conference, Mr. Seidenberg said Verizon was simply no longer concerned with telephones that are connected with wires.
* * * *By converting most of its landline operation to FiOS, Mr. Seidenberg said Verizon had a new opportunity to cut costs sharply. FiOS uses the decentralized structure of the Internet rather than the traditional design of phone systems, which route all traffic through a tree of regional, then local offices.
“We don’t look any different than Google,” he said. “We can begin to look at eliminating central offices, call centers and garages.”

In May, Hansell shrewdly asked

What good will it do for the F.C.C. to come up with a spiffy new plan to get faster cheaper broadband to more people if the phone companies fail and millions of people won’t be able to dial 911 in an emergency?

Copper facilities still deliver the highest fidelity and most reliable voice service. The reason optical fiber-based FiOS is a winner and copper is a loser for Verizon’s investors is because fiber is unregulated while copper is trapped in a legacy regulation time warp for the benefit of unions, local and state tax collectors and other reliance interests. Think auto companies.