The Case Around Copper

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

The Case Around Copper

In this article in the Tampa Bay Times, it mentions the decline of copper lines.

The number of U.S. phone lines peaked at 186 million in 2000. Since then, more than 100 million copper lines have already been disconnected, according to industry trade group US Telecom. The lines have been supplanted by cellphones and Internet-based phone service offered by way of cable television and fiber optic wiring. Just one in four U.S. households will have a copper phone line at the end of this year, according to estimates from US Telecom. AT&T would like to turn off its network of copper landlines by the end of the decade.

I would like to remind everyone - especially US Telecom - that landlines peaked in 2000 due to Dial-up!! Everyone went from one line to two. The ILECs reaped in the dollars for this along with the big name dial-up ISPs, like EarthLink, NetZero and AOL.

I have mentioned that VISA revenues peaked in 2006 at the height of the housing boom when people were taking out second mortgages to buy stuff to fill the third bay of the garage in their McMansion in the burbs. It has been a slow decline since then too.

The problem is that Wall Street, the bankers and other short-sighted investors, only reward gains despite the fact that everything has a ceiling.

ILECs make money from copper still - for fax lines, elevator lines,T1's, DSL and EoC. The fact that the two RBOCs want to delete not just the copper plant but the unions, pension liabilities and competitors tied to the copper plant.

They also make money from the replacement services - cell phones, fiber and VoIP. Don't let them fool you into thinking dial-tone isn't profitable. It still is.

Getting rid of the copper plant will result in an economic dip for the industry and the middle class. How? Layoffs and pension write downs.

Consolidation has already caused many layoffs.

As a country, there aren't many good jobs left. It is a finite amount, shrunk by consolidation, synergies, automation, and elimination of the middle manager. All for profits, which there are plenty of.

Cell phones out number people in the US, so that sector is flat. TV cord cutting is happening, so to combat that shortfall, cable Internet rates are increasing.

I'm just curious where they think their customers come from? Who can pay $200 per month for a cell plan and $200 for triple play without a good job?

I know that politicians not only don't read the bills they vote on, but have very little understanding of the economic engine in America - or care about the shrinking Middle Class. It's all about power and re-election. Why else would you stick a Monsanto GMO rider in a budget bill? Or call it a farm subsidy bill when the

People complain about the price of gas but in 1973 during the Energy Crisis was when it broke $1 per gallon - 40 years later despite a declining US dollar (thanks to the Fed) it only hoovers at $4 - much of that new taxes added since 1973.

Milk and fruit are considered expensive, but a gallon of milk is $3.99 today up from $3.00 in 2000. (Chart on 1999 to 2009 price changes.) If it wasn't for government subsidies, milk should be more like $6. And gas should be about the same as it is in Europe ($6/gallon). Government subsidies and tax breaks unnaturally play with the price of things. It's a chess board played by checkers masters.

We pay a price for this. Big Farms get to do what they want to keep production up. Any law they want. Very little regulation. The consumer pays - four times - at the cash register, in taxes (for the subsidies), and in health (for the mass produced crap that we eat). And the environment takes a hit. No one seems worried that millions of bee hives have died in the last two years. I guess everyone forgets that our food comes from bee pollination.

I am reading Brad Thor's new book, Hidden Order. The beginning is the history of the Fed. That will scare you to your core. That and the privatization of everything government used to do:

"This is a different kind of inflation than one finds from strictly financial bubbles. It is creating a new neo-feudal rentier class eager to buy roads to turn into toll roads, to buy parking-meter rights (as in Chicago's notorious deal), to buy prisons, schools and other basic infrastructure. The aim is to build financial charges and tollbooth rents into the prices charged for access to these essential, hitherto public services. Prices are rising not because costs and wages are rising, but because of monopoly rents and other rent-extraction activities." [Michael Hudson]

This is just a view I see. I look at the copper lines disappearing as one more example of profits over economic need. It is a short-sighted outlook for many reasons. It is certainly not better for the consumer to have a cell phone thrust upon them in place of a landline.

For the last couple of years, I contemplated running for office. Two things keep me out - (1) begging for money 4 hours every day for the campaign; and (2) could I really affect change?

I also wonder if anyone else sees this stuff.

And why people aren't outraged over it.

Thanks for listening.

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