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AT&T Communications Networking The Almighty Buck The Internet Wireless Networking Technology

All-IP Network Produces $100B Real Estate Windfall 229

Posted by timothy
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.'"
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All-IP Network Produces $100B Real Estate Windfall

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  • So... (Score:5, Funny)

    by Bradmont (513167) on Sunday February 12, 2012 @09:36AM (#39010539)
    So this means they'll be able to charge less for service, right?
    • Re:So... (Score:5, Insightful)

      by Anonymous Coward on Sunday February 12, 2012 @09:43AM (#39010559)

      Being able and actually charging less are two very different things.

    • by AliasMarlowe (1042386) on Sunday February 12, 2012 @09:47AM (#39010577) Journal

      They're reducing their costs, not their prices.
      Prices will go down if there is competitive pressure. Which apparently, is largely absent from the US market.

      • by Anonymous Coward on Sunday February 12, 2012 @09:58AM (#39010599)

        Yes. Cheaper running costs, not only from the reduced equipment demands, but from all the staff that they no longer need to employ to fill all of those buildings.
        So, they make hefty profits from all this, a lot of people lose their jobs and naturally prices will rise, because customers need to pay for this amazing new technology that'll give them 'better service quality.'
        I may love technology and improved efficiency, but I can't help seeing this kind of thing and thinking that we (i.e. everyone except the telecom companies) might be better off without it.

        • by GLMDesigns (2044134) on Sunday February 12, 2012 @10:44AM (#39010767) Homepage
          Look at movies from 50 years ago and see the floors full of secretaries. Those jobs are all gone now. Look at movies from 100 years ago. There were horses. The horse-shoers all lost their jobs. 120 years ago 80% of Americans worked in farms now 2% do. Look at all those lost jobs.

          Efficiency is good. It helps.

          If what you were saying was correct we should get rid of concrete mixers and pumps and have slews of people mix the concrete and carry it in buckets to where it needs to be poured.

          That would be silly wouldn't it. Again increasing efficiency in the system is a general good.

          • by AliasMarlowe (1042386) on Sunday February 12, 2012 @12:01PM (#39011223) Journal

            Look at movies from 50 years ago and see the floors full of secretaries. Those jobs are all gone now. Look at movies from 100 years ago. There were horses. The horse-shoers all lost their jobs. 120 years ago 80% of Americans worked in farms now 2% do. Look at all those lost jobs.

            I get what you're saying, but sometimes the details are more complicated than a first impression would suggest.

            For instance, the population of horses in the US [horsetalk.co.nz] has been increasing since the 1950s, but is still only half its peak of roughly 20 million which occurred about a century ago. The number of farriers in work has probably tracked the number of horses (farriers also put shoes on mules, but there is much less demand for this). Of course, many horses are used for recreation nowadays rather than for work, so the breed proportions have shifted from mostly coldblood draught horses to mostly warmblood and fullblood riding horses. Also, the geographic distribution has changed so that most horses live in regions just outside urban areas, rather than in farmland; the farriers' work has followed the horses.

            If you dig around on the web, you can find some historical estimates of US horse populations, which can be taken with as many grains of salt as you think appropriate:
            1867 = 8 million
            1915 = 21 million
            1940 = 6 million
            1950 = 2 million
            1960 = 3 million

          • by DarkOx (621550) on Sunday February 12, 2012 @01:03PM (#39011621) Journal

            There is old story.

            An economist goes to visit a small South American country. As a visiting dignitary the a representative of the local government takes him to see the canal project the country is working on. Men are their laboring away in the heat amongst the pests with shovels and picks.

            The economist asks, "Surely it would be cheaper to use power equipment even if you had to get loans and by the equipment abroad?"

            The representative replies, "You misunderstand sir this a jobs program for the people."

            The economist responds, "Then why the picks and shovels, would not spoons be better?"

            The representative strokes his chin and says "Perhaps."

          • Re: (Score:2, Interesting)

            by Anonymous Coward

            Look at movies from 50 years ago and see the floors full of secretaries.

            And ~30 years ago there were floors full of accountants. Then the spreadsheet came along, and got rid of a lot of the previously manual number crunching.

            Remember, "computer" used to mean a person who computed numbers 'by hand'.

            • by mikael (484)

              And everyone was talking about how they had the coolest and fastest hand-coded in assembly language text editor with more features than anyone else.

          • by sjames (1099) on Sunday February 12, 2012 @02:13PM (#39012099) Homepage

            When the benefits are allowed to spread to everyone, the increasing efficiency is a good thing. When lack of competition and other forces allow the corporations and the 1% to keep the savings for themselves, it's a net loss for everyone else.

          • by mikael (484)

            They used to say that if it weren't for all the automated telephone exchanges, there would be more demand for telephone exchange receptionists than there were single woman on the planet.

          • by r00t (33219) on Sunday February 12, 2012 @03:03PM (#39012411) Journal

            If what you were saying was correct we should get rid of concrete mixers and pumps and have slews of people mix the concrete and carry it in buckets to where it needs to be poured.

            Suppose you weren't a Slashdot-posting nerd. Imagine facebook is difficult for you, because it has text. You can't quite read "The Cat and the Hat" without help, but you're an adult and you'll make any excuse to hide your embarassing illiteracy. Your math skills include counting to 100 and adding single-digit positive numbers.

            You'd like those jobs. Better yet, the crazy-high expense would knock the rich down a few levels, changing demand (and thus supply) of various things to your benefit. You could live mostly as well as pretty much everybody else. You'd feel better about yourself, attract better women, etc. Live would be pretty sweet, at least regarding jealosy and feelings of unfairness.

            There are more people like the above than most of us Slashdot people realize. It's uncomfortably close to being the norm.

          • by couchslug (175151)

            "The horse-shoers all lost their jobs."

            Not all of them, and modern mobile horse shoeing can be quite profitable.

            A niche market is still a market, and oat-burners are still popular for much more than dog food.

          • 120 years ago 80% of Americans worked in farms now 2% do. Look at all those lost jobs.

            Efficiency is good. It helps.

            Watch Food. Inc. [imdb.com] and get back to me on whether you still hold that opinion.

        • Yes. Cheaper running costs, not only from the reduced equipment demands, but from all the staff that they no longer need to employ to fill all of those buildings.

          Virtually all of those buildings are the equivalent of a modern data center - they don't employ all that many staff (relative to their size) in the first place. Plus, that number has already been steadily dropping for decades as the equipment has decreased in size and amount of maintenance required.

          So, they make hefty profits from all this

      • Absolutely. If there is no downward pressure on prices then prices will not fall. But there is. Landlines are falling by the wayside (don't have the figures handy) and there is competition among the wireless services. Right now ATT may have a temporary windfall but I don't see it lasting that long.
        • Have you noticed that most of the landline companies and most of the cellular companies are actually the SAME companies? Why would they compete against themselves?
      • by Rockoon (1252108) on Sunday February 12, 2012 @10:36AM (#39010735)
        It is unlikely that the costs that these properties incur are significant compared to the total operating costs of AT&T. The $100 billion is in the value of the properties themselves, and as such the sale of them arent supposed to effect the price of service that AT&T provides.

        Car analogy: You are an independent contractor and own a $60,000 car. You wouldn't charge less for your services just because you sold the $60,000 car.
        • by khallow (566160)

          Car analogy: You are an independent contractor and own a $60,000 car. You wouldn't charge less for your services just because you sold the $60,000 car.

          I disagree. If that $60,000 car is a heavy duty truck which you needed for your job, then you'd have costs of several thousand dollars in insurance and maintenance as part of your work costs. In addition, the capital investment is an opportunity cost on that money. You could be earning several thousand a year from that money (or not paying several thousand in interest payments).

          So now, you can do your job just as well, without having to own a $60k asset and achieve savings that are somewhere between $5k-

          • by swillden (191260) <shawn-ds@willden.org> on Sunday February 12, 2012 @11:36PM (#39015797) Homepage Journal

            That will affect your bottom line and allows you to charge less for your services and still earn the same amount of profit. If you're in a competitive market, then you probably will do so to some degree in order to get or keep business.

            That makes no sense. If I'm a business owner, I'm interested in maximizing my profit. If the competitive nature of the marketplace means that charging less will enable me to increase my profits by acquiring more customers, or maintain my profits by not losing customers, I'd already be doing that with or without the windfall. No, if I have a $60K immediate windfall, plus an ongoing decrease in operational costs, I just improved my profitability. There's no reason to lower my prices, assuming I'm already competing successfully -- which means that my customers are happy with my services at my current prices relative to the competition.

            The only way your scenario makes any sense is if I'm already bleeding customers because my prices are too high, and I'd already cut my profitability to the bone and still can't lower my prices enough to be competitive without losing my shirt. In that case, the $60K windfall is at best a short-term band-aid. I can lower my prices to shirt-losing level and still stay afloat for a while by living on the windfall, but once it's gone, I'm right back where I was. So it really only works if the difference between me being able to stay afloat and not is the cost of the ongoing operational expenses related to the truck.

            But assuming I'm already competitive and profitable, why in the world would I want to lower my prices? If your long-lost aunt left you $100K would you go talk to your boss and say "Hey, you can lower my salary because I have this other money I can live on"?

        • by sjames (1099)

          You could buy a lot of new tools for 60K. 100billion is a lot of network upgrades.

          That doesn't necessarily translate to sustainable savings, but the associated costs do. That's a lot of buindings no longer costing them money for property tax and upkeep.

          The big savings are in all that electro-mechanical hardware they can dump and the associated costs to run it.

      • by timeOday (582209) on Sunday February 12, 2012 @11:08AM (#39010887)

        Prices will go down if there is competitive pressure.

        It might happen. One company's "windfall" at operating with reduced capital is another company's reduced barrier to entry. In your own job, if your workload suddenly drops, do you think, "whee, now I can goof off all day," or do you think, "uh oh."

    • Re:So... (Score:4, Insightful)

      by LWATCDR (28044) on Sunday February 12, 2012 @10:06AM (#39010625) Homepage Journal

      Actually long distance has really come down a lot. You can get unlimited long distance on most land lines pretty cheap and most cells have unlimited long distance nights and weekends. There was a time when long distance was super expensive. Even 12 or so years ago it was not all that cheap. Today it really is pretty dang cheap. I would say that a lot of the benefits are already here.
      I guess no one here took economics. Demand drives pricing not the cost of production. If you can produce a high demand product inexpensively you make big profits. Ideally competition drives down prices because the costs are low enough that others will undercut your pricing. That has actually been working in the long distance phone market in the US. VOIP providers like Vontage, Comcast, and so on plus cell providers have pushed down the cost of land line long distance. The Telcoms are pretty evil as a rule but voice long distance pricing is not exactly one of their big sins today.

      • Re:So... (Score:4, Informative)

        by postbigbang (761081) on Sunday February 12, 2012 @10:38AM (#39010745)

        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.

        • Utilities once belonged to the people

          Not in the US, they didn't. Aside from municipal water supplies (which arose largely because installing water and sewer systems involves ripping up all your streets, something that isn't going to work without local gov cooperation) and the US Government's hydroelectric power organizations, utilities are private. In many rural areas, water is provided by privately-owned co-ops.

          • Yes, they did. In some areas, they still do. Organizations emerged that were exempt of taxes under varying historical schemes, that became utilities. Most were mutuals, some were government owned, or cooperatively owned. Over the course of history, some became for profit.

            The theory of who grants utilities rights also is quite varied. The common law of owner rights to their land became muddied with utility easements, and right-of-ways became additionally muddied. Some states said that once you changed the na

    • by overshoot (39700) on Sunday February 12, 2012 @10:07AM (#39010631)

      Their land-line business is regulated at set rates of return on investment. Sell off the capital base and they'll be required to reduce their land-line rates proportionately.

      Or at any rate, that's the theory. Actual results depend on public rate commissions. Wise citizens pay careful attention to them, and this is an election year.

      • by SomePgmr (2021234)
        I wonder if they could take the cash windfall and pump it into infrastructure, call those infrastructure investments, "cost of doing business" and keep the rates high by amortizing those costs. Triple win for them. Better network, significantly lower recurring costs, keep the rates high.
      • The large (Bell and other) telephone companies are not regulated on rate of return any more. They are on "price caps". Only the smallest carriers, the mom'n'pops and subsidy-dependent rural ones, are on rate of return. That's why the Bells have laid off so many people and stopped investing - they are milking their old plant for all it's worth.

  • by erroneus (253617) on Sunday February 12, 2012 @09:42AM (#39010555) Homepage

    Need I say more?

  • Office space glut! (Score:2, Insightful)

    by Anonymous Coward

    The summary sounds all rosey and it is just as simple as selling off unused office space. In order to sell something you need someone willing to buy it. It sounds like the office-space market is going to get flooded with office-space getting sold at liquidation prices in an already sucky economy. How many people are out of work and how many companies have folded? There's already lots of empty buildings. Oh, you now AT&T will unload even more office space? Yeah, this sounds great! Sigh.

    • by snsh (968808) on Sunday February 12, 2012 @10:03AM (#39010617)

      Many of those telco facilities will probably remain as data centers, not office space. They're already built out as data centers.

    • by Nutria (679911)

      Eeeevil Landlords are going to suffer (yay!!!) because rents will plummet, and commercial construction will plummet throwing even more laborers out of work (boo!! or yay if your goal is to foment revolution).

      Of course, ATT could just hold on to most of these hard assets, selling them off slowly while boosting their balance sheet in the meantime.

      • their bonuses for the current quarter, telling everyone they 'made 100 billion dollar profit' for ATT. then they quit ATT and move to some other 'finance' job where they pull similar tricks. now maybe ATT later goes bankrupt because what it had book as 100 billion in assets could never be sold for 100 billion, and one weekend everyone realizes this at once and there is a massive selloff and dis-investment. (hey, its the mortgage meltdown all over again).

        then we get the ATT bailout, and a bunch of other bail

      • by sjames (1099)

        There will be plenty of construction to re-purpose the spaces.

    • by Larryish (1215510)

      Which means that small businesses and start-ups can afford more floor space.

      Successful business doesn't just mean bringing a good product at the correct price with effective advertising.

      Successful business also means looking over this corpse of an economy and picking the eyes out of it.

    • Not really, because they're quite geographically diverse. $100bn sounds a lot, buy then that's only $2bn per state. Given the cost of office space in city centres, that can be as little as one floor of an office building in each major population centre in the USA. Finding someone who wants to buy it all is likely to be impossible, but finding people who want each bit should be quite easy. On the other hand, finding someone willing to pay 15% of the sale price per annum is also probably quite easy, so it
      • by w_dragon (1802458)
        AT&T's core business is telecom, not renting real estate. Real estate requires a whole bunch of lawyers and employees that aren't required for running a phone system. Companies that try to profit off things that aren't really related to their business tend to have trouble competing with companies that focus on an area.
        • So you spin off a wholly owned subsidiary to do the management. AT&T leases them the buildings for $10bn a year. If they make less from them than that, then it's a tax write-off. If they make more than that, AT&T gets a dividend.
    • by mjwalshe (1680392)
      and Central offices/ Exchanges aren't your normal office blocks in design so its not just a simple switch from one use to another.
    • by Lehk228 (705449)
      Lower office prices will lower the barrier for companies to start up or to expand from their street-side storefront to using an actual office.
    • by sjames (1099)

      If you're trying to start a new business that will employ people, it IS a great thing. If you're primarily a rent seeking property owner, it isn't.

  • by davecb (6526) <davec-b@rogers.com> on Sunday February 12, 2012 @09:59AM (#39010601) Homepage Journal

    The Australian telcos, who are being converted to an IP backbone, found there were some difficulties. Because they must operate a wiretapping facility [citation needed] for their various police forces, they have to invent and build one for voice over IP. Being a new initiative, this is fraught with risk, unexpected costs and scalability issues.

    This will be true of any telco in a legal regime where the government requires the telephone companies to provide the mechanics needed for spying on their customers.

    --dave

    • by cdrudge (68377) on Sunday February 12, 2012 @10:02AM (#39010613) Homepage

      They don't have to buy the spyware. The government will buy it for them.

      • by stefanb (21140)
        Not where I come from. In Europe, telco's have to foot the bill for lawful intercept equipment. They can charge the agencies only a nominal fee for intercepts. Industry organisations have estimated the additional capital expenditure at up to a hundred million Euros for Germany alone.
        • by davecb (6526)

          That's true of Canada, too.
          As far as I know, it is also true of the U.S.: the telco must be able to wiretap a certain percentage of their customers without service degradation, and do a traffic analysis of up to 100% of their customers at all times. The latter is easy for telephone companies: they just use their existing billing systems.
          The latter is easier in Europe, where billing for local calls is normal, and amazing hard for non-telco IP shops (ISPs), as they don't bill by the connection.

          --dave

        • by Splab (574204)

          Not so fast there. Here in Denmark, police will show up with their own hardware and ask to have a port replicated.

          Are you referring to the laws of logging? Those are incurred by the ISP and they can charge for police to lookup information; but when it comes to wiretapping police generally don't want the telco workers to know who is being looked over the shoulder.

    • by oPless (63249)

      VoIP wiretapping is easy if you you run a VoIP server - how do you think all those wonderful call centers record your conversations "for training purposes" ?

      • VoIP wiretapping is easy if you you run the VoIP server the person is calling - how do you think all those wonderful call centers record your conversations "for training purposes" ?

  • by overshoot (39700) on Sunday February 12, 2012 @10:03AM (#39010619)

    Regulated monopolies are generally allowed a fixed return on investment. For instance, all of that copper laid down in the twenties though the seventies is listed as an asset that the telcos get a few percent profit on each year. And that includes those buildings.

    That means that AT&T will make a windfall of billions, but will also reduce their capitalization (and thus profits) going forward. They'd best invest wisely.

    • 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.

      • by tgd (2822) on Sunday February 12, 2012 @10:32AM (#39010717)

        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.

        • by JoelClark (150479) on Sunday February 12, 2012 @10:47AM (#39010785) Homepage

          NH politics aside, I don't think we want to build a society where you must live in an arcology just to get basic infrastructure. Yes I am using hyperbole, but it is to shed light on the obvious flaw in your thinking. Believe it or not, corporate america could actually have the aim of making our country a better place if our society actually valued that.

          • by Oligonicella (659917) on Sunday February 12, 2012 @12:31PM (#39011403)
            "I don't think we want to build a society where you must live in an arcology just to get basic infrastructure."

            It's a philosophy, not a construct, but I get it and to answer, we don't. Basic infra - elec/phone - has already reached all but the most remote areas. So, there's no need to fret that.

            If, however, you seriously believe that if I choose to move literally two hundred miles from anywhere, society has an obligation to run "basic infrastructure" out to me? Please.

            When I bought my farm I knew before I moved there it was in the sticks. Guess what? I had elec and phone. Those are the "basic infrastructure". Water is called a well and septic takes various free forms. High-speed and other tech advancements are not "basic".


            "Believe it or not, corporate america could actually have the aim of making our country a better place if our society actually valued that."

            Our society valued forcing them to, or our society valued making our country a better place? Those are not inclusive concepts by nature.
            • by mikael (484) on Sunday February 12, 2012 @03:10PM (#39012493)

              Towns evolved from villages, which evolved from market squares Start off by having a few ranch homes. Every week, they go to church, and once a month there are town hall meetings. That requires a church and a town hall both for various ceremonies, and a bank to store valuables, along with a sheriff and a mayor. Every two weeks or month there's a trade market. There's also a barber shop, beauty shop, doctor, dentist, hotel and hardware store on the high street. Earlier times they had a blacksmith. If they are lucky, there might just be a railroad station too, that takes them to big city. With smaller villages, the fire department is volunteer based as everyone works locally. In larger towns, they will have a full-time fire department.

              Maybe there are factories to convert farm produce into other products, like fur, linen, tinned food. A nearby mine can produce various metals and gemstones, to make machinery and/or jewelery. Might even be a brewery Once technology became sufficiently advanced, you had clockmakers, musical instruments makers, carpenters, plumbers, roofers, painters, artists, sculptors and decorators. As the population grows, you can have more specialization like schools, colleges, universities, research institutes.

              The rate at which any particular location can advance is really dependent on how many people and goods they can get travelling through. Coastal areas have the advantage of being next to the sea, or a large river (London, New York, Paris, Los Angeles, San Francisco). Other places may have the advantage of being next to the only pass through the mountains.

        • I see that aws a problem with our communication infrastructure being privatized, not with people living outside of cities for their plethora of valid reasons.
        • Re: (Score:2, Interesting)

          by wytcld (179112)

          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.

          Interesting theory. But Verizon got out of the landline business in Vermont and Maine at the same time, because Verizon just didn't want to be in the landline business, coupled with a huge tax advantage they got in transferring d

        • by Myopic (18616) *

          For some strange reason in the US, we believe that you have a right to infrastructure no matter where you live.

          Perhaps it's not that we believe people have a "right" to it, merely that helping to provide the infrastructure makes the whole country a better place, and that in a democracy we should pursue policies that make the country a better place. Have you ever considered that? or do you just spout bullshit about "rights" all the time?

  • It seems to me that a half rack of equipment of gonna take a lot less employees on site to babysit than rooms of equipment. Sure some of those jobs will stick around with the new business that takes over, but that will seemingly be the huge cost reduction for the company.
    • by grumling (94709)

      It's even better: Since it only takes up 1/2 a rack, you just put in 2 of them. When one fails, just swap over to the backup. Send a tech out in a few days to swap out the bad part (or better yet, send a Cisco tech out to swap out the bad part), while the NOC watches.

  • by TraumaFox (1667643) on Sunday February 12, 2012 @10:15AM (#39010661)
    So really, how much of that $100 billion will actually be reinvested for things like improving national infrastructure and providing better service to customers, or anything that isn't cutting bigger bonus checks to top execs?
  • For regular voice it's not really a problem, but for other things it can be, fortunately those are going away also.

    The problem is digital voice. IP Voice service almost always has some compression and decompression involved which creates a delay between a word being spoken and being heard. This is why you get an echo instead of feedback when you have your buddy has his speakers up to high on a Skype call. Usually not much of an issue, but I have noticed an increase in trying to talk over the top of one a

    • by pecosdave (536896) *

      NEED MORE COFFEE

      VIS is the Apollo/early shuttle era system DVIS replaced, and also why the touchscreen devices DVIS uses for terminals are called "keysets" despite the lack of having any keys or buttons of any type. VIS had a pile of push buttons.

      No, the system DVIS is being replaced by is called DVICE, it's using copper. It also has touchscreens, only instead of the really old "break the beam" screens it has what I think is a resistive touch screen, but I'm not 100% on the type.

    • by timeOday (582209)
      Hmm, the problems you note are certainly issues with VOIP using consumer equipment on a shared Internet connection (such as my Ooma device over my Comcast Internet, or your Skype box), but I had assumed AT&T's telephone IP backbone probably has dedicated bandwidth allocations, generous bitrates, and cut-through routing [cisco.com] to avoid the inherent latency of store-and-forward packet switching.
      • by grumling (94709)

        You are correct. Voice "circuits" still use 64Kbps per call, 4Khz audio rolloff, and very mild compression. About the only thing that may cause problems is latency caused by an over-utilized trunk, but that's almost unheard of. Even the VoIP systems that share normal Internet traffic in the channel can be used with credit card and fax machines.

        VoIP can deliver extremely high quality service. AT&T has been using it since the mid-1990s in their long distance network and no one seems to have noticed.

  • AT&T will lay off people, close buildings, and profit thanks to improvements in technology.

  • The bandwidth of fiber optic is ridiculously larger than that of the same weight and diameter of a bundle of copper. So is the electrical cost of a long bundle of fiber, which does not waste anywhere near as much electricity and energy on simple conductive losses of telephone wire driving DC electricity across dozens or thousands of miles of electrical wiring in a single building. Unfortunately, we've turned right around and wasted the resources elsewhere. Providing network traffic to every single electroni

  • Why only have a 'windfall' now? Electronic exchanges have been around since about 1970, making thousands of electro-mechanical switch buildings obsolete. The latest miniaturization step is just one in a long series.
  • ... if we're really losing all the COs, is in emergency telephone service during extended power outages.

    My Verizon FiOS land-line only works for a few hours after a power outage starts, because they provide only a small UPS to operate the network interface at my site. No more full-time talk battery, folks.

  • by Joe_Dragon (2206452) on Sunday February 12, 2012 @11:32AM (#39011041)

    What about backup power? equipment sheds don't have the same type of backups that the big offices have. And it's a lot to send techs out to each equipment shed with portable generators and keep then fueled. Right now the cable co's some times have to do that and they can't cover the full system with what they have.

  • Who wasn't expecting it? Reducing your infrastructure footprint is bullet item 1 on practically any presentation on "let's switch from big, stateful, slow circuit-switched stuff to small, stateless, fast packet-switched gear". Is there anyone who's done networking in the last decade that didn't know this? Didn't they get the memo?

    Oh, right. AT&T. They don't care. They don't have to.

  • since US Taxpayers subsidized large portions of this upgrade, right?
  • by isdnip (49656) on Sunday February 12, 2012 @12:53PM (#39011561)

    The huge savings in telephone company real estate happened over 20 years ago. Their big buildings were built for electromechanical switching systems, mostly installed between 1920 and 1970. The digital switches mostly installed in the 1980s were a fraction of the size, leaving lots of empty space in the big buildings. Some space has already been repurposed. And some is available, but the Bells don't want to give it up because it would make competition easier.

    Most of the real estate still used by telco gear is for line drivers, the stuff needed to run analog phones. Whether these are fed by VoIP or TDM doesn't matter; 90 volt power ring and 48 volt battery take space. They also take power, but home-based analog terminal adapters (local battery) use even more, so centralized power (common battery) is a net savings.

    Berninger is simply repeating Cisco memes, that somehow the magic pixie dust of IP makes everything wonderfuler. It's bullshit, but somebody has to call them on it.

    • Right. Mod parent up. The low point in telco CO space needs came after 5ESS replaced #5 crossbar.

      Telephony systems today have more than switchgear. Many of the newer servers require server farms. You probably get a hosting and mail account with your DSL line. If a telco offers video, there's probably local caching. Telcos are now in the colocation business - Akamai often has caching servers in a central office. Netflix (which is 22% of Internet traffic and climbing) has caching servers, and the telco it

  • Is the number of end-user connections that fiber can carry "almost arbitrary" as in one less than an arbitrary number, or as in only being slightly determined by the actual capacity of the fiber?
  • by Casandro (751346) on Monday February 13, 2012 @01:41AM (#39016419)

    I mean you either packetice your voice into fairly large (i.e. 20ms) chunks of data and have horrible latency which would create problems for many applications, or you pack every single sample into a packet an waste a _lot_ of bandwidth.
    It only makes sense for low quality voice only telephone networks... however I don't need a phone company for that, I only need IP.

    So essentially what AT&T is doing here is to throw away the only advantage they have over their competitors. If there was competiion, they probably wouldn't do that. BTW I have chosen my phone company partly because they offer real ISDN.

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