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Verizon Cuts Copper, Installs Incentive To Invest

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A chief argument against Net Neutrality has been that it will remove incentive to invest. Recent moves by Verizon to lock customers into fiber shows that the incentive is most certainly present, and the company will do what is necessary to muscle the future into being.

Verizon Cuts Copper, Installs Incentive To Invest
Verizon Cuts Copper, Installs Incentive To Invest

I’ve argued for a while now that there’s no incentive to invest in the network as it is now, anyway. The world is shifting to fiber optics and away from copper wires. The incentive is in fiber, as he who controls the fiber, controls everything, and bandwidth concerns are a thing of the past.

That doesn’t mean traffic shaping and creating a tiered Internet wouldn’t be desirable for incumbent providers. No, having unlimited bandwidth for voice and video and piecing it out to those who can pay would be quite lucrative.

There is incentive in fiber, or else Verizon has wasted $23 billion to connect 18 million homes to its FiOS network, a move that the company says will ultimately save it $1 billion per year in maintenance fees while providing blistering speeds (speeds other providers can’t match). 

Saving on maintenance fees is the chief reason the company says its technicians have been permanently disabling the copper connections at the homes they pass, and not telling customers about it. Well, Verizon says they should have been told at least three times.

But according to customers quoted in by the Associated Press, there was no option given regarding whether or not to retain the copper connections. And as one notes, that sort of voids the 30-day money-back guarantee.

It does something else as well: It locks the customer into Verizon’s fiber optic network, which at present isn’t required to be leased to competitors the way copper is, and gives the customer no (cheap) alternative to returning to copper, which is still used by AT&T and other competitors who plan to deliver fiber-to-the-node rather than fiber-to-the-premises to save money. (AT&T has publicly bemoaned the cost of increasing capacity on copper networks in AT&T-funded unbiased studies).

And boom. You’ve got a nice monopoly developing. Add that to the ability to direct traffic and dole out bandwidth at a premium to content providers, and you’ve got more incentive to invest than you can shake a bottom line at.

To be fair, Verizon did say they would restore the copper connections if the customer "insists," but they’d rather not.  

Verizon Cuts Copper, Installs Incentive To Invest
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  • http://www.youtube.com/fiwaszewski Forrest Iwaszewski

    It’s a safe bet if Verizon is part of it..That company is ruthless!! If it’s not going to happen, they will make it happen..This is typical of all large corporations in this country. Whether it’s this business, or another. Corporate America leads and we all follow..
    forrest uriah iwaszewski…