| Question arises on WHY the rural last mile is being spun off The question this topic brings up is why are the major telcos selling off the rural last mile business. And that answer is fairly straight forward.
Local phone business is still regulated and rates are set by state PUCs. Regulators took advantage of the fact that the national carriers like Verizon & AT&T could bury loses from areas where costs were higher than revenues amongst their more profitable business lines.
Verizon, and I guess eventually AT&T, can spin off these losing segments by selling them to smaller telcos. And the regulators will have to let these smaller rural telcos raise rates or see them go out of business.
End result - the rural areas can no longer be subsidized by more profitable urban areas and will have to pay the real costs of supplying that last mile access. |
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| telco spin off I wish century tell would spin of my area to Att century tel sucks bad. |
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me1212
join:2008-11-20
Pleasant Hill, MO | reply to fAcEtIOUs
Re: Question arises on WHY the rural last mile is being spun off "End result - the rural areas can no longer be subsidized by more profitable urban areas and will have to pay the real costs of supplying that last mile access."
Then y not just charge more, if it cost more? |
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1 edit | said by me1212:"End result - the rural areas can no longer be subsidized by more profitable urban areas and will have to pay the real costs of supplying that last mile access."
Then y not just charge more, if it cost more? Because it is REGULATED. The state, thru the PUCs, decide what can be charged. And what they allow is less than the costs involved. The telco can't just raise rates when they want. |
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me1212
join:2008-11-20
Pleasant Hill, MO | So they r making less than it cost them to provide service? Well then I cannot blame them for doing this, y would you stay in an area where u cannot make money. |
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| Don't forget those same telco's CAN and DO get USF money and in some states like MO do not regulate much on price. That was a story even on here. |
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| said by hottboiinnc:Don't forget those same telco's CAN and DO get USF money and in some states like MO do not regulate much on price. That was a story even on here. The bottom line is this - Verizon wouldn't sell the lines off if they were making money on it. If they were profitable they would keep those customers. |
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Reviews:
 ·WOW Internet and..
1 edit | VZ would sell them off regardless. They only want the areas where they can get in easy and put out FiOS. Many of the areas most likely doesn't want them. They're prices are sky high and service is shitty.
Also they have to be making something if VZ is keeping the VZ Business side which only caters to business services which they obtained after taking over MCI/UUNET. VZ just wants fast ROI and they want it yesterday, and they plan on doing that by cherry picking their areas. |
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| reply to fAcEtIOUs
Good point. The solution to this is to go ahead and regulate on the national level. |
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 DaveDudeNo Fear
join:1999-09-01
New Jersey
kudos:1
 ·Vonage
·ViaTalk
| said by roymustang:Good point. The solution to this is to go ahead and regulate on the national level. Why ? Once 4G comes around, rural areas can be served at the same level as metros, probably better due to low population. |
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| reply to fAcEtIOUs
Besides USF as mentioned there are couple other things:
Interconnect fees: Rural telecoms have traditionally got a major chunk of their revenues from the long-distance carriers.
Labor costs: The smaller rural telecoms are not unionized and thus don't pay big salaries to the Communication Workers of America members. |
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Reviews:
·WOW Internet and..
| reply to DaveDude
Why wait for 4G LTE? We can do it now with 4G WiMAX. It's just ATT and VZ wants to wait and build their network later that will only be used for Cell service anyway.
Sprint and Clear/wire have the right idea and more and more companies will start going out with WiMAX. |
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| reply to PastTense5
which in turn gives them money to deploy FTTH and other services faster. |
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iansltx
join:2007-02-19
Golden, CO
kudos:2 Reviews:
·Comcast
| reply to fAcEtIOUs
Actually by running operations in an efficient manner rural co-ops have in some places built "gold plated networks". I guess it's because of interconnect fees or whatever that they charge to the "big boys" but co-ops and I assume the rural-type telcos run significantly differently than the likes of AT&T and Verizon. Both models are profitable, but we're seeing that AT&T and Verizon models need higher density to thrive.
Now if Verizon would stop sitting on my market and sell it to somebody...anybody...that'd be awesome. Town of 10k+ and still no DSL. |
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iansltx
join:2007-02-19
Golden, CO
kudos:2 Reviews:
·Comcast
| reply to DaveDude
Verizon came out and said their LTE service would provide 8-12 Mbps speeds. That, with AdrenaLine, would be 12-16k wire feet on lower-grade wiring (24AWG) iwth ADSL2+. So unless you're REALLY out in the sticks (more than 3 miles from the CO) the telephone company will meet or beat LTE's speeds. In addition, DSL probably won't have as low caps as LTE, and DSL can happen now. |
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iansltx
join:2007-02-19
Golden, CO
kudos:2 | reply to PastTense5
My point exactly. |
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patcat88
join:2002-04-05
Jamaica, NY
kudos:1 | reply to fAcEtIOUs
said by fAcEtIOUs:End result - the rural areas can no longer be subsidized by more profitable urban areas and will have to pay the real costs of supplying that last mile access. You argument makes no sense, since rural carriers can just bill it to the USF. |
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 intellerSociopaths always win.
join:2003-12-08
Tulsa, OK
 ·Cingular Wireless
| reply to jchambers28
Re: telco spin off yes if centurytel is the rural future then I'll just stay in the past. Those thugs thrive on monopoly status and know nothing about competition. I see them getting broken up in a few years. They are the primary reason rural broadband penetration is so bad. |
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patcat88
join:2002-04-05
Jamaica, NY
kudos:1
1 edit | reply to DaveDude
Re: Question arises on WHY the rural last mile is being spun off said by DaveDude:said by roymustang:Good point. The solution to this is to go ahead and regulate on the national level. Why ? Once 4G comes around, rural areas can be served at the same level as metros, probably better due to low population. And what company is going to build those rural towers without being forced to at gunpoint (continuous fines) from the govt?
At most you can hope for is the 2G and 3G towers that were created by law under the 800 mhz auction and grants by the FCC in the 1980s (and those coverage requirements don't exist anymore), will get upgraded to 4G. Why would any traditional cell carrier build more rural towers? Charity? |
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| reply to fAcEtIOUs
I hate to disappoint you, but your argument fails. I was in shock how much more telephone service cost when I moved to a rural area from Philly. It's the cities that are subsidized. |
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