Friday, February 23, 2007

Analyst: Telcos are doomed copper dinosaurs

Barron's Online is out with a report today on a broadband market analysis by Sanford Bernstein analyst Craig Moffett, who believes the telephone companies remain too wedded to their copper cable-based infrastructures. Moffett believes their stance dooms them to broadband extinction in the long run, setting the stage for cable companies to walk over their copper carcasses.

Not only that, Moffett opines, the telcos are deploying fiber optic cable in densely populated urban areas where their legacy copper cable plant is in better shape and where DSL's short distance range works best. Good point. I've argued telcos should concentrate on changing out copper with fiber outside urban centers where their copper cable plants are the oldest and most deteriorated and cannot support widespread DSL service as is the case in El Dorado County. The telcos like AT&T and Verizon should reverse their current fiber priorities and put fiber in these areas first. They'll gain customers for broadband services they currently cannot offer there due to the limitations of copper while at the same time be able to continue to derive revenues from urban markets where their copper is newer, more reliable and better able support broadband over the interim until they fully replace copper with fiber throughout their service areas.

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