All-IP Network Produces $100B Real Estate Windfall 229
Posted
by
timothy
from the they're-not-making-any-more dept.
from the they're-not-making-any-more dept.
Hugh Pickens writes "Daniel Berniger writes that one of the unexpected consequences of AT&T's transition to HD voice and all-IP networks is that the footprint of required network equipment will shrink by as much as 90 percent, translating into a $100 billion windfall as the global telecom giant starts emptying buildings and selling off the resulting real estate surplus. Since IP connections utilize logical address assignments, a single fiber can support an almost arbitrary number of end-user connections — so half a rack of VoIP network equipment replaces a room full of Class 4 and Class 5 circuit switching equipment, and equipment sheds replace the contents of entire buildings. AT&T's portfolio goes back more than 100 years, even as commercial real estate appreciated five fold since the 1970s, so growth of telephone service during the 20th century leaves the company with 250 million sq ft of floor space real estate in prime locations across America. 'The scale of the real estate divestiture challenge may justify creating a separate business unit to deal with the all-IP network transition,' writes Berniger, who adds that ATT isn't the only one who will benefit. 'The transition to all-IP networks allows carriers to sell-off a vast majority of the 100,000 or so central offices (PDF) currently occupying prime real estate around the globe.'"
Office space? Data center space. (Score:5, Informative)
Many of those telco facilities will probably remain as data centers, not office space. They're already built out as data centers.
Re:There's a problem here (Score:5, Informative)
As a monopoly, they should be required to invest some of the windfall into running DSL to rural locations. In fact, they should want to do this anyway, because people who have data, don't need a land line. That's the one ace in the hole they have, to make people keep a land line and pay for a cell phone, otherwise, it's just a cell phone.
But in our culture of greed, the choice between smart investments that will pay off later, vs. HUGE bonuses now....that's a tough call.
Infrastructure run to rural locations *never* pays off later. It never has, and it never will. The only reason rural places even have phone service is because the government taxes everyone else and pays the telcos to provide it. For some strange reason in the US, we believe that you have a right to infrastructure no matter where you live. You can pay 1/10th the cost of living of being in a city, and make the people in the city pay for your subsidized access.
Verizon was smart in New Hampshire when the state pulled that BS on them. The state said "if you run FTTH in any town in NH, you have to run it to EVERY town in NH". The problem with that? Northern NH is very rural and very poor -- a combination that means the cost for running fiber is astronomical and very few people would even buy the service. Verizon told the state to screw, and sold everything to Fairpoint and pulled out entirely. The end result? Not a single new town in the state has fiber service, everyone who had it has dramatically lower quality service, and Verizon avoids a money pit. Everyone loses except Verizon.
I find it strange that you're advocating forcing corporations to subsidize people who don't want to take the responsibility of the choices for where they live, and you've got a Ron Paul sig. Very strange, that.
Re:So... (Score:4, Informative)
You also need to remember that the older AT&T said that ATM (Asynchronous Transfer Mode) and LAN-E (Ethernet over ATM) would rule the world.
They invested in tons of stuff, and only the dark fiber is paying back. Now, scattered through neighborhoods across the country, are enormous beige cans full of DSL equipment, blighting the hemisphere. Instead of doing FTTH, they continue do deploy various versions of DSL. Their "micro central offices" get state sanctioned easements and right-of-ways that the new AT&T rarely has to pay for.
Utilities once belonged to the people, and the rights of ways and easements were granted to them. Now they own this stuff, just like when the mutual insurance companies were gobbled up by WellPoint and others, they turned enormously valuable assets into private enterprises owned by shareholders. People that owned the mutuals got benefits, but not in proportion to the new for-profit shareholders.
Conclusion: tax the living hell out of AT&T's real estate property assets. Tax them like a noose.
Re:Watch it be sold off for a song (Score:5, Informative)
Then you need to practice your unit conversions, here's a trick I learned in engineering - put each conversion ratio in parentheses and make sure the numerator and denominator are equivalent. Then add as many ratios as necessary to convert all unwanted units into something relevant. This technique makes it possible to do complex unit conversions while guarding against careless mistakes. A quick double-check that each unwanted unit occurs exactly once in each a numerator and denominator so they can be canceled, and you're good to go.
Old price = $2/min * (1 man-hour/$2) = 1 man-hours/minute
New price = $4/hr * (1hr/60min) * (1 man-hour/$15) = 0.0044 man-hours/minute
Or 225 times cheaper for a minimum-wage worker, clearly more than 2 orders of magnitude.
Re:Watch it be sold off for a song (Score:4, Informative)
RTFAs! They're not talking about the easements, they're talking about the COs. The new tech allows the huge COs to be mostly closed and replaced by a few pedestals in the easements.
Look at those buildings again, and imagine what dozens of them in the actual city of New York must cost.