Today, I looked outside my home and saw a van:
I scrambled outside with Sheepa in tow for his morning walk and saw a guy in the back of the truck and struck up a conversation:
KURT: Hey buddy… so, uh, are you prepping for FiOS around here, or do you know what the deal is with the rollout plans for this area?
VERIZON DUDE: [sigh] No… there’s no FiOS going in to the area any time soon. I live in the area and I’m waiting like everyone else.
KURT: So what’s the deal with the van wrap?
VERIZON DUDE: They just put that on last week, and people have been asking me about it ever since. The fact is, I wouldn’t bet on seeing it for at least until the end of the year. It’s probably a full year out or more.
KURT: Whhhaaa… WTF?!?
VERIZON DUDE: Yeah, I know. I’m with you. They had a test rollout in Santa Monica near Montana Ave so they’ve been rolled out for a while and it works great, but the rest of the city… not so much.
KURT: That blows.
VERIZON DUDE: No kid. But it’s complicated. I get yelled at all the time about the rollout of FiOS but there’s more to it that just, “Verizon is slow.” Remember that we want to provide it just as much as you want to consume it but there’s more in play than just that.
He then proceeded to talk about the reasons why FiOS rollout is so difficult around here. It turns out that there are many, many more issues that are completely unrelated to the technology that make it’s availability tough in Los Angeles:
This one should be obvious but the fact remains that if Verizon’s going to make an investment in the infrastructure for FiOS in a given geography, they have to make sure that they’re going to see a return on their investment. While this may see obvious, not everyone has the cash to fork over for FiOS. Most people already have a means of watching Digital TV. Most people already have some form of Internet connectivity be it cable or DSL… and most of those people don’t even use a quarter of it. Meanwhile, FiOS requires a fiber-to-the-curb infrastructure to be put into place that’s very expensive so the question comes down to: Who’s going to pay for it? Who’s going to guarantee that the money spent will be recoup-ed and how long will that take? Verizon’s a business after all and they’ve got stockholders just like any other publicly traded company.
- State Law
Now THIS problem I can understand: Under California state law, phone companies are mandated to lease their infrastructure to competitors. Verizon for example is required by law to lease their entire infrastructure to Covad to create competition in the communications space. While one might argue that this is good since it creates checks & balances in an otherwise one-vendor marketplace, it also squarely places the risk of investment on Verizon – which is $20 Billion – while it’s competitors get all the strategic benefit of the new fiber optic technology.
NOTE: To put $20 Billion dollars into perspective, the ENTIRE Xbox gaming business at Microsoft cost around $9 billion dollars up until 2008. To purchase Nintendo lock-stock-and-barrel back in 2000, I was told that it would have cost Microsoft around $25 billion. (Now you know why we just built our own console instead of acquiring someone)
At the end of the day, Verizon’s not interested in building out a multi-billion dollar infrastructure just to see that benefit helping their competitors so they’re waiting on Governor Schwartzenegger to sign a bill that says that if Verizon makes the investment in fiber-to-the-curb statewide, they don’t have share the fiber without passing on the infrastructure’s high cost to their competitors as well.
- Municipal Agreements
Each municipality requires different agreements. Many places like West Los Angeles want overhead lines instead of underground lines or vice versa for superficial or logistical reasons and the Verizon dude said that frankly, that’s just NOT going to happen. Cities are trying to dictate how the infrastructure gets laid down without any real consideration for what the cost of deployment, repairs and maintenance are in a given area & Verizon doesn’t want an entire municipality determining how hard it is to do maintenance on these lines knowing the cost that it will incur to deal with one or the other. This has created a negotiating roadblock in many places where FiOS would be an otherwise no-brainer.
This stuff isn’t like copper wire. It’s fiber optic cabling that has to be laid down all the way to an individual unit. So for condominiums, the whole building has to agree to have the fiber installed and the inconvenience that comes with it. While this might not be a big deal for our condo per se being that we’re a group of 8 units filled with Yuppies and Mid-upper Class D.I.N.K.s, this could be a huge challenge for other condos in other areas like South Central where 15Mbps Internet access and all-digital on-demand video isn’t a priority as compared to things like FOOD and PERSONAL SECURITY. The Verizon dude said that that issue alone is enough to cause city councils to go apesh-t: Why should Verizon be able to discriminate as to where they lay fiber for an underprivileged community that despite not being able to afford the service, should “still have the right to it’s availability like everyone else” since it’s a regulated service.
I told the Verizon dude that I understood… and knew where he was coming from. We have people in the European Union that want us to ship our competitors products in Windows. We even had to remove our Media Player & Internet Browser despite the fact that every other operating system on the market has a built in Media Player & Internet Browser.
So that’s that. I’m still a year away from my dream of 15Mbps up & down. But at least now I have a better grasp of the situation, and a little understanding as to why: Isn’t that all any of us want?
FIOS would make a considerable amount of money in the Los Angeles market. Your local cable and telephone company has complained that they will suffer a sever income loss if FIOS is allowed in the LA. So they have made it tough for FIOS to persue that avenue.
Other broadband providers have proven they have a large enough user base in Los Angeles, that losing those accounts would affect their businesses in a negative way.
So if you sign up for a 2 year contract with your broadband provider you are giving them proof that they in fact hold a large user base in Los Angeles.