Saturday, July 14, 2007

Verizon Gets Out of The Copper Business

Copper hit $3.66 a pound today on the COMEX exchange - that's a lot. Copper is heavier than iron, and the weight really adds up quickly. For example, it only takes 146 pre-1982 pennies to make a pound. Yes, that means you can make $2.20/lb. by melting down your pennies. Except, of course, it is explicitly illegal to do so. At current rates, A cubic inch of copper is worth a little over a dollar; a cubic foot is (get this) worth over $2000.

It's not just copper; aluminum, zinc, bronze and stainless steel are all commanding high prices these days. These may seem like novel facts until one more novel fact is added; that is, a lot of public infrastructure is made out of these metals. Enterprising folks are literally ripping off anything that isn't nailed down - bleachers for example. Beer kegs aren't being returned, and some police departments can't get ammunition. Fortune, for all its glory, printed a veritable how-to guide on how to pick and choose the Choice items in publo-sphere. And some big companies, like Verizon, are taking big hits.

Verizon, the telcom provider, is bleeding from every pore; vandals stole over $300,000 in copper from their cell phone towers last year, and that was just in California! In addition, their copper cable network is collapsing, because subscribers are abandoning it in favor of their faster FIOS (fiber optic) network. Maybe that's why Verizon made the decison to kill off their copper infrastructure.

Some malcontents are complaining that they are screwing the customer, because if they don't like the new FIOS service then 'they can't go back to copper lines'. Who? Wha? Guys, when a rogue cuts at 20 foot section out of a trunk cable and sells it for the copper, there's no phone service, and one can hardly expect Verizon to maintain two infrastructures. Scarce resources will require some adaptation; Verizon's new silicon-based FIOS is faster and more resource efficient. And it won't get ripped off either. (follow up - oops, I guess it does get ripped off!) :: CNN

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