Re: Should legacy technologies be allowed to remain forever? [Telecom]

Telecom seems to be an area where the cost of retaining legacy

>infrastructure may well be increasing the costs of better infrastructure >right now and/or slowing down the future deployment of even better >infrastructure.

In other industries, where there's still a market for older technology, there are often specialized businesses who buy up the assets that the market leaders don't want to carry on their balance sheets. For example, semiconductor companies regularly sell the mask rights for older, less-profitable chips to someone else who specializes in making replacement parts for customers (like the military) who can't easily upgrade.

If the regulators were to allow it, I could easily see a Verizon or a Thenewatt spinning off their entire copper infrastructure to a new company, which could then lease back to the ILEC only the parts needed to serve customers who haven't been converted over to fiber yet. They'd get a depreciating asset off their books, the new company would get an infrastructure that still has some remaining utility, and eventually, the copper could be pulled out and shipped to some third-world country to be stripped and sold to the Chinese. The ILEC would no longer be in the business of renting infrastructure to the competition. (The new company could effectively be a new sort of REIT.)

-GAWollman

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Garrett Wollman
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