In the NY Times today some fellow wrote an article, wordy and wandering, to try to explain the discussions between Google and Verizon.
I think based upon my experience and dozens of writings etc that the fellow is just plain wrong. Here is my view:
This article makes no sense. Let me state just three simple reasons. I note that I have written extensively on each of these over the past thirty years. Thus there is a basis for my opinions.
1. First, Verizon, as it deploys FIOS, is selling off all it local COs for several reasons; first cash, second, it gets rid of union workers, third it allows Verizon to have a hand full of IP based centers. Verizon does not want lots of local Central Offices, they want lots of fiber and some regional hubs at best. Even the guys in cable like Cablevision have at most regional hubs! Who in their right mind wants local offices.
2. Second, Google has both a fiber network and regional not local centers. so why get the old Verizon stuff and at what price. there seems to be a lack of understanding of next gen IP architecture here. Google is now one of the largest fiber network operators in the US if not the world. Verizon does not bring much to their table.
3. Third, the real issue is video disintermediation, they all hate Comcast and this is a collusion play, yes it may likely violate antitrust laws but Google was largest contributor to the current administration and we all know politics and politicians. This is a play to get video to the end user. to break the current monopoly held by cable companies. This is not technology as it is to kill off the monopoly. When the two largest players get together like this it has to do a great deal more with markets than shipping containers.
4. They are changing the distribution channels, they are creating an electronic marketing and distribution channel, an electronic shopping mall, and they want the franchise, the sole franchise. We argued this thirty years ago when I was at Warner Cable. Then it was too early for cable, now it may become too late.
The rest of this article in my opinion is confused at best. I think the author, who professes to be some seer of the future, kind of makes the point in the last paragraph:
Why wouldn’t the companies just tell us what they’re up to? If my guess is right, then I would think they’re silent because it’s a secret. They’d rather their competitors not know until a few hundred shipping containers are in place — and suddenly YouTube looks more like HBO.
That I believe sir is what we have called disintermediation. Been that way for decades and it seems you may have just discovered it.
BTW this was the old GTE strategy, also Bell Atlantic and now Verizon, in 1982.
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