Big disconnect: Telcos to abandon copper phone lines [telecom]

Voice Link won't handle medical device checking, alarm systems and credit card payments. Verizon needs to come out with Voice Link II that will handle that stuff and charge a premium for it.

No, Verizon needs to spend the money to fix the fripping phone lines. They're a public utility with a duty to provide universal service. It's their job.

Despite the smoke and mirrors, this is 100% about money and Verizon once again failing to provide the service they have comitted to provide. (Did you know they promised to wire the entire state of NJ with 45 megabit fiber by now, and got a rate increase to fund it?) Comcast managed to restring all their wires in Mantoloking, and Verizon can, too.

It's fine if they restring with fibre rather than copper, but as has been widely reported a cellphone box on your wall is not equivalent to a real phone line.

There's some background here. Until the early 1990s, the Bell companies in every state were regulated like utilities, under Rate of Return. That regulated their profits; they were allowed to target earnings as a certain percentage of their rate base, which was the undepreciated value of plant in service. So if a telco had $1B of rate base and a 12% rate of return, they were entitled to $120M of annual earnings. How they made that didn't matter. They generally made high monopoly profits on urban business accounts and lost money on rural accounts. Residential basic rates didn't usually cover costs but optional features made up for it.

*Since the profit was proportional to the rate base,* they had an incentive to pad the rate base with *more* investment. State regulators would thus decide which investments were prudent and allowable.

In the early 1990s, they asked to be moved to "Alternative Form of Regulation" (AFOR), also known as "Price Caps". Instead of regulating profits, only their prices would be regulated. This applied in most states at the retail level, so their basic 1FR line rate would be capped, but they could raise some other rates, and cut their costs to increase profit margins. It also applied to wholesale FCC rates ("access"). All of the Bells and some of the Independents went this way, though some small independents remain on Rate of Return.

Under AFOR, the incentive have shifted. Rather than have an incentive to invest too much, they have an incentive to be cheapskates. They've cut employment by more than half. Their capped prices were based on the

*average* cost of serving high and low cost customers. It was *assumed* that they'd continue to do so, but that was foolish. If they could dump their high-cost customers, they'd raise their average profit margin even more. They only have incentive to invest where it will be directly profitable. That explains why FiOS only covers part of the Verizon footprint, and even that investment was financially marginal compared to, say, more mobile crap.

So now we're just watching it play out. They let their old network deteriorate, to raise short-term profits. They have replaced it in some places with FiOS. But in low-profit communities like summer resorts and rural areas, their goal is to cut and run. That's why they've gotten some states to remove their "carrier of last resort" obligations, which prohibited dropping low-profit customers. NY and NJ have not done so and so they're trying to meet the obligation with VoiceLink, a super-cheap (third world) substitute that provides barely-usable voice quality and no non-voice capabilities.

Average down cost, average up profits. That's their plan.

It seems a reasonable solution would be to rewire the whole town with fiber & rip out the copper, as long as it could look like a copper phone line to anything that needs such, except for the availability of power (need the box with UPS/battery). Offer FIOS package and a basic phone line equivalent over it.

I have FiOS and like everything about it except the need for a UPS for power in order to use the internet. I have a 650VA UPS with which I power the router and the ONT. This gives me about 90 minutes of internet connection. After 90 minutes I lose the router and the ONT switches to its internal battery backup which gives me telephone only for about 6 hours. For short outages, this works fine but for Sandy, it sucked. I was without power in NJ for 11 days and moved to a motel in PA on day 3. Fortunately, FiOS knew when my telephone service went out and automatically transferred all incoming landline calls to my prepaid cell phone which is good for telephone calls and messages but not wifi or data.

[Moderator snip]

Interesting. I have Cox phone service and the router has a battery good for 8 hours built in, not the net, just the phone service.