[Discuss] Competition of broadband

[Bill Horne]

On 12/5/2011 7:50 PM, Richard Pieri wrote:
> On Dec 4, 2011, at 7:49 PM, Bill Horne wrote:
>> Two words: time and materials.
>>
>> Verizon won't compete with Comcast for broadband, because they'd have to complete their network with today's labor rates.
> Say what?!  Verizon has been very aggressively pushing FiOS.  Perhaps not everywhere, but definitely in some of Comcast's strongest markets.

It's definitely not everywhere, nor even "manywhere". Close only counts 
in Horseshoes, hand grenades, and nuclear artillery: it's no good to 
have 50% of the available houses wired, because that means that your 
competition can still survive on the remaining half.

> Cities like Boston already have the fibre trunks.  The only work that needs to be done is to connect residences to the trunks.  In most cases, Verizon pays the communities for the privilege of making those connections in addition to footing the bill for the runs, sometimes regardless of households actually subscribing.  Case in point, Verizon paid my condo complex $150 per unit times 334 units just for the privilege of running fibre to each unit, and Verizon paid 100% of the cost of actually running all that fibre.  This all within the past year.  All that I've paid for out of pocket is for the tech to do the interior installation, wire up the ONT and configure the cable box.

Well, if Verizon is so eager, why isn't FiOS available in a /very/ 
well-to-do bedroom community like Sharon? If Verizontal is "aggressively 
pushing" FiOS, how come they've bypassed the profit that's available in 
Sharon and many other suburbs? Logically, in an area where average 
household incomes are over $126,000 per year, I must conclude that there 
are other factors in play.

AFAICT, Verizon now sees itself as a wireless company stuck with a 
legacy line of business called "wireline", which it is doing its best to 
abandon as soon as possible. Compared to wireless, the "wireline" 
business is a millstone around Verizon's neck, and they've been so 
successful with cellular that they just paid several Billion dollars to 
buy out the spectrum that Comcast was threatening to use for a competing 
cellular offering.

Don't forget that "3G" and "4G" (whatever that means) data plans 
contribute immensely to Verizon's profit margins, and I doubt that 
Verizon's actuaries would stack the potential profits from FiOS against 
the immense pay-per-minute-per-byte river of gold that they are standing 
in /right/ /now/.  If FiOS succeeds, then the cellular data margins go 
down, and that means that Verizon is giving FiOS lip-service while doing 
everything it can to maximize cellular income.

> Boston and Somerville keep saying "no" to FiOS because of Comcast's think-of-the-community lobbying and the threat of renegotiated franchise fees reducing the Cities' revenue.  That's the real bottom line, and it's the origin of my subsidiaries quip.
>

The real bottom line (no offense) is that ordinary people never see the 
/real/ bottom line. Local bureaucrats want to be paid for allowing 
anyone to make a profit in "their" community, but cellular bypasses all 
the greedy hands that are out when anyone asks for a right-of-way on 
municipality poles, and that means multi-national corporations can play 
a waiting game, hoping that national elections will deliver a government 
more pliable to their "recommendations" and less concerned with 
appearances than those currently in power.  The U.S. Congress, tied to 
Nineteenth century paradigms of commerce and government, views the 
Internet as a party line where the village idiots go to pretend someone 
is listening, and in a world where the only political currency is 
/actual/ currency, Internet users aren't important[1].

Sorry to bear bad news, but Uncle Sam only cares about you and me if we 
have lots of money to spend. In the meantime, your local library has a 
"high speed" connection, so don't complain.

Bill

1. Although some upstarts have been successful at raising /some/ 
campaign funding via the Internet, contributions from Washington's 
Beltway Bandits dwarf the amounts gathered via the net. In any case, as 
far as Congress is concerned,  the idea of using the Internet for 
fundraising is lumped in with other campaign impedimenta: something 
handled by professionals who return from the beaches of Maui on their  
biennial rounds of the mudpits, where they blithely service their 
benefactors by performing what soon-to-be-former Congressman Barney 
Frank called "Slopping the Hogs".

-- 
Bill Horne
339-364-8487