Slashdot Mirror
All-IP Network Produces $100B Real Estate Windfall
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.'"
Oh I don't know, back in the late 70's I was paying $2/min + operator's fee to call the UK from Oz, equivalent to about an hour's minimum wage per min. Now it's about $4/hr and min wage is ~$15/hr. By my reckoning that's a couple of orders of magnitude drop in prices over the last 35yrs.
And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
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.
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 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
Those who can make you believe absurdities can make you commit atrocities. - Voltaire
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"?
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.