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Telecom Changes Put Competition on the Line
As Verizon expands its fiber-optic network, rivals argue the disappearance of traditional copper lines will harm their business.
(By Mark Lennihan -- Associated Press)
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Some policymakers say the combined impact of rivals losing access to both copper and other lines could impair the United States' push to catch up to other countries' level of broadband deployment.
Edward J. Markey (D-Mass.), chairman of House telecommunications subcommittee, said in an interview that he thinks Verizon's petition and copper-cutting practice undermines the effort to extend high-speed Internet across the country.
"This is not just a battle between big companies and small companies -- it will be viewed as an indispensable part of our broadband policy," he said.
Verizon said it would continue to make its network available to competitors but wants to negotiate new rates with the companies so they can't piggyback on its multibillion-dollar investment in the network.
Verizon also said it would reconnect the copper lines to homes if customers want traditional phone service. Verizon expects to save about $1 billion a year by 2010 by moving more of its business to the fiber-optic network, which is cheaper to maintain than copper.
Howard, the Infonetics analyst, said Verizon has plenty of competition from cable companies that have also upgraded their networks. "As long as consumers have several choices, these companies need to be able to see a return on these massive investments," he said.
The FCC expects to decide on Verizon's petition in early December.
The main goal is to give large and small companies an incentive to invest in greater technological development, said Blair Levin, an analyst with Stifel Nicolaus.
"The core policy question is the same: What drives investment in better, bigger, faster networks?" he said. "We want our telephone companies to invest in these networks, so what's the best policy to encourage that behavior?"
