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Got FiOS? Say Goodbye to DSL

Congratulations! After an hours-long installation, your home is now connected to Verizon Communications Inc. (NYSE: VZ)'s FiOS network, and you have one of the fastest residential broadband hookups in the U.S. Say goodbye to that slow DSL connection.

Seriously, say goodbye -- because if you ever want to go back to DSL, there's a good chance you can't.

When Verizon connects the fiber line to your home during a FiOS installation, it is the company's standard practice that the technician cuts the copper connection from the street to your home. This leaves you with only a fiber line running into your house. Verizon says that customers prefer this over having a logjam of wires running through their property.

But what about those rare cases where someone only wants a cut-rate DSL connection and VOIP service. What happens when a formerly FiOS homeowner no longer wants to be a Verizon customer?

Though such a switch would probably be rare, there's a chance the copper line is gone for good. "We'd handle it on a case-by-case basis," says Mark Marchand, director of media relations at Verizon. "The goal would be that we want to keep them as a customer and we would do everything we could to reach an accord."

A customer fleeing from FiOS might not get far, as other competitive DSL providers rely on Verizon's copper infrastructure to reach customers in its territories.

Winning a former FiOS customer "would be very difficult to do, but its not impossible" said Arkady Goldinstein, CEO of AceDSL, a voice and DSL service provider in the Northeast. "You would have to ask the Verizon technician to leave the copper connection, but whether or not they do it depends on who ends up at your house."

AceDSL says there have been instances where Verizon has reconnected a copper line so that AceDSL could reach a former FiOS customer. The company says about 25 percent of all FiOS installations it sees still have copper going to the home, even though Verizon's usual procedure is to disconnect it.

With Verizon planning on passing 18 million homes with FiOS by the end of 2008, it would seem that a lot of copper lines are at risk of disappearing as more and more customers sign up. But that still isn't the death knell for the competitive carrier DSL business.

"FiOS has a negligible effect on the CLEC community," says Tom Nolle of CIMI Corp. "FiOS only extends what was already a deep fiber deployment." Nolle says companies like EarthLink and AceDSL have known for years of the movement towards fiber and that FCC regulations mandate that RBOCs are only obligated to maintain for wholesale the voice channel of any fiber access infrastructure.

For competitve DSL providers, the disappearing copper may not kill their business. But it probably won't help it either.

"The growth of Earthlink's broadband business has slowed from double digits to single digits, but I think they can maintain their current rate," says Vijay Singh, an analyst with Janco Partners Inc. Singh says Covad Communications Inc. 's expanding ADSL2 footprint shows there are still spots in the broadband market where CLECs and ISPs can do well.

— Raymond McConville, Reporter, Light Reading

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paolo.franzoi 12/5/2012 | 3:05:45 PM
re: Got FiOS? Say Goodbye to DSL
Except that NO was filled with copper for black phones.....there is nothing that can be done on a disaster of that scale.

seven
OldPOTS 12/5/2012 | 3:05:45 PM
re: Got FiOS? Say Goodbye to DSL This is also a means to ensure it costs a lot to restore that highly available/working black phone with a long chord. Just ask the little ole lady on TV from New Orleans during Katrina. All hurricane disaster long, despite Bell South's best effort to say it wasn't so.

OP
t.bogataj 12/5/2012 | 3:05:44 PM
re: Got FiOS? Say Goodbye to DSL Bruhaspati: "Is data network as reliable as our good old voice network?"

It isn't, and cannot be. The good old POTS (no reference made to "OldPOTS" :) was powered independently. Try making a 911 call using VoIP over fiber/DSL/cable/you-name-it during a blackout. No chance.

Is "VoIP for low price, cellular for emergency" the business case of today? Or is it just another grey area that noone dares to address?

tata, T.
Bruhaspati 12/5/2012 | 3:05:44 PM
re: Got FiOS? Say Goodbye to DSL Is data network as reliable as our good old voice network? Typically the failover/upgrade in data network are too slow and many time not truly In Service or Hitless. May be a big issue for 911 kind of calls. Any thoughts?
sigint 12/5/2012 | 3:05:44 PM
re: Got FiOS? Say Goodbye to DSL Seven:
Except that NO was filled with copper for black phones.....there is nothing that can be done on a disaster of that scale.
_________________________________________________

In hurricane prone provinces in India satellite phones have been used, with some success.
paolo.franzoi 12/5/2012 | 3:05:43 PM
re: Got FiOS? Say Goodbye to DSL
That is the point right....to kill competition.

seven
billy_fold 12/5/2012 | 3:05:43 PM
re: Got FiOS? Say Goodbye to DSL No one seems to have mentioned the anti-competitive nature of cutting the copper? How can the CLECs lease a UNE-L if the copper has been cut?


-billy
OldPOTS 12/5/2012 | 3:05:43 PM
re: Got FiOS? Say Goodbye to DSL That little ole lady was the only operating phone in her ward. The cell phones tower lost electricity and their few batteries ran out quickly. The one by my house on had about two days worth of battery, but it now contains four times as much equipment last only for about eight hours. Tested by the power company as they moved power lines.

OP
Duh! 12/5/2012 | 3:05:42 PM
re: Got FiOS? Say Goodbye to DSL If they remove subscribers from the copper loop, they can abandon the entire loop when everybody's switched over to FiOS. A good part of their ROI profile depends on abandoning copper plant, which is *much* more expensive to operate and maintain than copper.

Is the fact that it also excludes DSL competitors an unimportant side-effect or blatantly anti-competitive? That depends on your perspective. In the 2003 Triennial Review proceeding, Verizon argued not, and the CLECs and some ISPs raised a bloody ruckus. In any event, the FCC decided that the public benefit of encouraging ILECs to deploy FTTx more than makes up for the loss of competition using (what is perceived to be) legacy technology. The arguments for and against are part of the public record, and the FCC made a policy decision for better or worse. I can see both sides of that argument.

Incidentally, some European operators are not incented to cut off copper for anti-competitive reasons, due to the horizontal industry structure imposed by their regulators. I've seen bits of cash flow analysis from a couple of these operators which are heavily driven by savings on copper maintenance, weighted to the out-years. Which suggests (but not proves) that getting rid of copper plant may a legitimate need for Verizon as well.
billy_fold 12/5/2012 | 3:05:42 PM
re: Got FiOS? Say Goodbye to DSL It seems to me that there is no point in cutting the copper other than to kill any possible competition. It would be less work for them to just leave the copper in place.


-billy
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