Why is this page text-only?


Geoff Daily

App-Rising.com covers the development and adoption of broadband applications, the deployment of and need for broadband networks, and the demands placed on policy to adapt to the revolutionary opportunities made possible by the Internet.

App-Rising.com is written by Geoff Daily, a DC-based technology journalist, broadband activist, marketing consultant, and Internet entrepreneur.

App-Rising.com is supported in part by AT&T;, however all views and opinions expressed herein are solely my own.

« Big Surprise: People Will Accept Less Pay to Work From Home | Main | What Can PEG 2.0 Mean in the 21st Century? »

June 13, 2008 6:16 PM

Dallas, We Have a Problem - Too Much Broadband

Shocking news in the world of fiber deployment: Verizon is planning to overbuild AT&T;'s U-Verse fiber-to-the-node network with their own fiber-to-the-home FiOS service.

The implications of this move are staggering.

First off you've got two $100 billion a year corporations fighting over the same wireline customers. While AT&T; and Verizon have long battled for wireless subscribers and business customers, this is the first I've heard of them going head-to-head offering triple play services to consumers, which in and of itself is significant.

Secondly most of the rest of the country must be jealous over the fact that these communities are going to have more options than just about anywhere for broadband. I know I am.

Third it shows how competition is being encouraged by a statewide video franchises, which Texas passed and therefore enabled Verizon to do this.

Fourth it's potentially devastating for AT&T.; In terms of capacity, FiOS trumps everything they're trying to market as being new and improved. It was hard enough trying to convince people that U-Verse was better than cable, now they've got to compete with the fact someone else is offering a full fiber network. Plus, once Verizon gets that fiber in the ground and a customer signed up, I think it's going to be hard for AT&T; to ever get them back.

Fifth, this will be a fascinating situation to watch as it, perhaps more than any other FTTH build in the country, will demonstrate how vulnerable incumbents are to a FTTH deployment stealing their customers. I say this because everywhere else Verizon's deploying they are the incumbent, and most of the other deployments are either to greenfield developments or by municipalities, which offer an inherently different value proposition as consumer decisions are influenced at least in part by individual's trust or distrust of the government.

But in the end, I hate this news.

Why? For one simple reason: if our goal is a fully wired country, than this is an inefficient use of resources.

Don't get me wrong, I'm very excited to see more communities get wired with a full fiber network. But it's upsetting to see some communities continue to get more investment when many others aren't getting any.

Making matters worse is what is likely to happen as a result of this decision by Verizon: more investment from Time Warner (the primary incumbent cable operator) and AT&T;, which will not only further the gap between the haves and have nots but may also directly divert money from being invested in less competitive communities in order to help defend the customer base in more competitive ones.

If Time Warner and AT&T; don't invest in upgrading capacity, they're likely to lose customers to Verizon. But if they do, we could eventually end up in a situation where there are multiple fiber pipes running to the same home, which is totally redundant.

Fiber optics are so robust that all the world's Internet traffic can run over a single hair-thin strand. The reason we have multiple pipes today is that they were first put in for separate uses: cable TV and telephone. But once you have fiber, all you need is one pipe to the house to support all the world's video, applications, and services.

Because of this, the fact that we might see some homes get two fiber connections before so many others can't get one suggests to me that there's something very wrong with this picture.

But I have to admit, this whole line of thought has me really torn.

I always support the further deployment of fiber, especially if it's all the way to the home.

But I also can't help worrying because since wiring the country is such a massive, capital-intensive job I'm not sure we can afford to waste money allowing competitive markets to continually overbuild the most attractive neighborhoods, especially if it means leaving other communities behind.

Is it possible for a community to have too much broadband? We might soon find out.

Del.icio.us Digg Yahoo! My Web Seed Newsvine reddit Technorati


TrackBack URL for this entry:

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)