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Saving the Bells' Broadband Bacon

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Saving the Bells' Broadband Bacon
Topic: Business 1:25 pm EDT, Apr 22, 2003

] As DSL loses ground to cable, wireless technologies may
] be the phone companies' best hope for linking customers
] to the Net at high speed

This is one of the worst articles I've read about telecom in quite some time. To wit:

At the end of 2002, just 6.2 million of the 18 million broadband households in the U.S. were using DSL

hmm... not bad, considering that cable got a 2 year jump on DSL thanks to the Bells, and that most of the companies that were offering DSL in the first place are now dead. I'd take a 3rd of the market anyday given those circumstances.

The writer also fails to mention that the reason why DSL deployment is so abysmal for the Bells is because they don't want to deploy it at all.

Broadband Internet service is fast becoming the cable industry's biggest moneymaker: CIBC cable analyst Alan Bezoza estimates that its operating margins on high-speed data run as great as 60% before interest, taxation, and amortization.

yeah, it also helps that a lot of those customers they acquired for pennies when @Home got raided. Compared to the typical $500+ acquisition cost for a DSL customer (or even a new cable HSI customer), that makes the economics look gooooood.

Verizon Chairman Larry Babbio predicts that his company will break even on DSL once he signs up 3 million subscribers.

LOL! 3M? Larry.... who's running your network? How is it that investors allowed a big dinosaur who doesn't even want to deploy DSL cook up a scheme to blow billions of dollars and not make a penny until they've got 3M customers, when dozens of CLECs were left to die who had business plans that showed profitability with one tenth that?

A large niche market is developing that the Bells could have all to themselves: Internet access from rural areas -- those huge stretches of the country where cable doesn't go.

and every economic analysis of this market is that it will never be profitable unless you are a satellite company. No matter what tech you're using.

BellSouth also is testing fixed wireless as an alternative to DSL in both suburban and rural areas.

It fails to mention that the reason why BellSouth is doing this is because they have significant FITL in the suburbs and they don't want to share that fiber with anyone, or allow anyone to colo at the remote terminal. Sounds like good business practices to me.

"There's no advantage," declares Ed Charleton, SBC's vice-president for Internet product management, who explains that SBC's research has shown that it would cost about the same to provide wireless broadband as to upgrade existing copper network to handle DSL.

Hey? How'd this get in there? I was sure this was a flak piece from the wireless lobby!

Moreover, in February, 2002, the Federal Communications Commission ruled that the Bells wouldn't have to share high-speed fiber lines with competitors, as they are required to with copper phone lines. That means they have an incentive to invest in fiber, not wireless technologies, as a way to shut out competition.

BINGO! Hey Jane, didn't you put 2 and 2 together after you wrote this? Oh I forgot, you're just another idiot flak.

Saving the Bells' Broadband Bacon



 
 
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