Seidenberg’s Epiphany

September 18th, 2009 by · 9 Comments

Yesterday at the Goldman Sachs conference, the CEO of telecommunications giant Verizon, Ivan Seidenberg, had a lot to say.  Enough to get the 'bits' blog of the New York Times to write Verizon Boss Hangs Up on Landline Phone Business.   Benoît Felten of Fiberevolution wrote some nice commentary on it as well.   In essence, Seidenberg completely abandoned the traditional phone network model, both in its physical, copper manifestation and in the organizational structure that the RBOCs have built around it.  Imagine five or 10 years ago hearing these statement from the CEO of an RBOC about the future of his company

“When you look at the FiOS architecture, our network doesn't look much different than any over-the-top player that would come into our footprint. So we can begin thinking about eliminating central offices, eliminating call centers, eliminating garages and doing all sorts of things that begin to change the entire topography of the Company.”

and

"But the thing we need to do now is remind ourselves that the inherent platform that fiber-to-the-home creates is not anywhere near what a switched digital architecture looks like or what a prior infrastructure would look like for a telecom company. We don't look any different than the way Google is going over the top and the way other companies are going over the top."

Say it ain't so Ivan...   That's right world, now it's official - everyone wants to be Google now, even Verizon.  Now all he has to do is convince the unions its OK to do all that!  And then there's this introspective bit:

"I have never been more confident that I can see the end of the tunnel on this because once I shed myself of the burden of chasing the inflection point in access lines and say I don't care about that anymore, I am going to focus on driving FiOS penetration and taking costs out. I feel liberated, Jason. I am actually liberated. Okay, so you can ask me about inflection points all you want. I don't know the answer to it and I'm not going to focus on it anymore."

The copper yoke is off his neck, if not quite yet his company's yet.  Well, it certainly does help that he's selling most of those landlines to Frontier Communications (NYSE:FTR, news, filings), so caring about them is becoming a rather moot point.

Regardless, is what we are seeing is Seidenberg (and Verizon) reaching the FIOS tipping point and looking downhill at last?  Fiber everywhere means more than getting some TV revenues, it offers a chance at a fundamental transformation for which there is no financial model.  When does an RBOC cease to be an RBOC?  This is what FTTH has been about, and Seidenberg deserves credit for pushing ahead with it.  The bean counters said it was too expensive and not worth the investment, but spreadsheets can't capture the transformational power of fiber.

Of course, right now it could just be Seidenberg and a few of his inner circle.  Turning the lumbering giant that is Verizon into a lean, mean, Google-like bandwidth machine is a bit like turning a dump truck into an Apache helicopter.  It takes a hell of a lot more than a guy with a dream, even one with his hands on enough cash flow to buy many a small nation.


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Categories: FTTH · ILECs, PTTs

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9 Comments So Far


  • Dirt says:

    nice story Rob

  • pbc says:

    verizon still has 30m land lines. and is selling 4.8 to ftr.

  • Frank Coluccio says:

    Seidenberg can be seen here echoing what others have been saying (including yours truly in the enterprise space, if only ITIL and the “best practices” of the copper cabal, which very effectively serve to protect copper architectures a la A&T, would permit) for several years now.

    Ivan’s use of “over the top” to make his point, however, is a new ring to this theme, but in essence he’s talking about the transparency and distance insensitivity afforded by fiber. See what Deutsche Telekom and France Telecom had already stated, as seen in this post of my from a year ago this week:

    http://bit.ly/EafGV

  • Emile says:

    This could mean great things for LVLT if a bidding war develops for their fiber assets. Potential customers could be VZ, Tmobile, Sprint, GOOG etc.

  • anon says:

    he is right.. but should recall the elephant in the room: $65 billion in debt [$65,000,000,000) related to all that copper plant. the “internet” is killing off yet another industry with legacy “distribution” cost burdens that no longer can be rationalized… what if a “newco” brought fiber or 4G to these same residences. same opportunity w/ same economics other than that pesky elephant

  • Dave Rusin says:

    Death to copper … can’t happen fast enough for me.

  • carlk says:

    For a man who has traditionally ran straight into TREE TRUNKS, when appearing as a much younger copper line technician and playing touch football with peers on his lunch breaks, he sure seems less thick skulled today.

    Speed Ivan, speed! Grease lightening ITALIAN speed!

    I don’t think he can do it, though!

    Jim Crowe said, “former monopolies,” when referring to Ivan and the rest of these TITAN crews just the other JEFFRIES morning.

    “Bring it on!” lol, imo

  • Brian Scully says:

    Interesting article from 2004 addressing the issue of Fiber and the future of the RBOCs

    http://silveroakadvisors.wordpress.com/files/2009/09/fiber-revolutionizing-the-bells-network.pdf

  • fluids_only says:

    Nice words but also, I suspect, a pre-emptive strike against net neutrality legislation.

    The argument would be that preventing RBOCs from favoring their own upstream businesses (by enforcing anti-discrimination rules) would require RBOCS effectively to run the provision of residential access lines as a stand-alone business, rather than as part of a joint product bundled in with ISP and content services. Fine then, say the RBOCs, if you want us to run it as a viable stand-alone business, we either (1) allow the copper network to degrade, because it’s not worth investing in anymore (2) raise local access charges (3) impose download caps or (4) all of the above.

    Whenever US businessmen use quasi-religious metaphors to describe their business decisions, you can bet they are trying to pull the wool over someone’s eyes … and Seidenberg is LIBERATED! HALLELUJAH!!!

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