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Comment by paulddraper | Hacker News Reader

“The failure of Verizon to comply with its obligations… to provide fiber optic service throughout the State of New Jersey,”

What causes this obligation?

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Telecoms oftentimes make deals with the government - in exchange for some sort of advantage, they agree to provide a certain level of service. Linked from the article:

Verizon predecessor New Jersey Bell agreed to the statewide broadband buildout in a 1993 agreement with the state. In exchange for a different form of price regulation that would allow the company to make more money, "Verizon agreed to upgrade its network to provide broadband to every Verizon New Jersey business and residential customer, school, and library for 100 percent of its service territory," according to the state's Division of Rate Counsel.

http://arstechnica.com/tech-policy/2014/04/verizon-led-massi...

In the US, many telecoms operate as a legal monopoly. In exchange for a more or lesscaptive market, telecoms are legally obligated to maintain certain levels of service, among other things - such as rolling out upgrades.

This is supposed to provide a higher level of service to the consumer/citizen of the area that makes the agreement, while also meaning telecoms don't waste their massive upfront costs by having no customers. It's supposed to provide the same impetus to improve service as competition. In practice, you get this kind of nonsense.

It's not quite so simple. The whole point of the 1996 Telecom Act was to get rid of the legal monopolies and get the government out of the business of regulating them. What we have now are incumbents not monopolists. However, in a low-margin industry (Verizon's wireline operating margin is 2-5%) with enormous capital costs, that's kind of a theoretical distinction.

ILEC's still have a monopoly on copper runs in most jurisdictions afaik.

They own the copper runs. But if you want to compete with them by building your own infrastructure you're allowed to do that. In most places, it's the power companies that own the utility lines, not the telcos. The problem is it's not worth anybody's while to do it to earn 3-5% return.

A monopoly doesn't require that other people be legally prohibited from competing (if they are, that's a granted-by-law monopoly), it requires that you have sufficient dominance in some market as to exercise pricing power within that market.

"In the US, many telecoms operate as a legal monopoly."

I assumed we were talking about ^^^.

I'm not being pedantic about the distinction. If you're of a libertarian bent, there is a big difference between legal and de-facto monopolists.

So, there are no smaller telecom companies (internet providers) in the US?

Tons, but odds are if you select 100 Americans at random, 95 of them won't have access to a smaller ISP than Verizon or Comcast.

From the Article: "Verizon predecessor New Jersey Bell committed to a statewide broadband buildout in a 1993 agreement with state authorities in exchange for a price regulation overhaul that the telco requested."

I assume part of the takeover/merger that happened also merged the previous responsibilities.

One thing to consider is it is unlikely that a 1993 agreement included a provision for a fiber to residential home requirement.

It's probably a requirement for building fiber to commercial or government locations if a customer is willing to pay. Stuff that Telecom's do, it's just very expensive.

People knew what fiber was in 1993 and that it would be important.

Sprint made it an integral part of their long distance adverting in the mid-80s: http://www.retroist.com/2014/11/18/sprints-pin-drop-commerci...

They also counter advertised against MCI, founded as Microwave Communications, Inc., on the basis of their using fiber and MCI still using a lot of microwave. From http://www.fundinguniverse.com/company-histories/sprint-corp... E.g.:

"In a spirited demonstration of the obsolescence of the microwave networks operated by AT&T and MCI, US Sprint blew up one of the last of its own microwave towers in February 1988."

I remember seeing a print add at the time with a picture of the controlled demolition in progress.

Sure. Fiber was already in widespread use. But the local telecom that became Verizon wouldn't be dumb enough to promise fiber-to-the-house in 1993.

I'm willing to bet 50 bucks, the so called expert is misinterpreting the contract or statements by Verizon.

I would agree; however, Verizon has reneged on this agreement a few times. There are several "donut" towns in New Jersey where Verizon was explicitly mandated to serve FTTH but never bothered to (and seem to have been all but forgotten by local lawmakers).

Don't know the actual contracts here but the notion that a telecom firm has obligations to a government body is hardly surprising.

Telecom providers work with government bodies to place and access poles via eminent domain. Even with cellphones similar considerations exist for the placement of towers. Providers can work directly with private landowners but performing all such negotiations individually is not feasible.

Thus in exchange for the State of New Jersey supporting Verizon there are complimentary obligations for Verizon in return.

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