Planting fiber in the garden state

Earlier this month, residents of the Los Angeles suburb of Inglewood successfully defeated a campaign by Wal-Mart Stores to establish a new discount super center in their neighborhood. Though the new store would mean new jobs, residents feared it would replace neighborhood union jobs with non-union ones and poison retail competition in Inglewood. Keep your jobs, the people said. We'll take competition.

At about the same time, on the opposite edge of the country, a similar spat was taking place between citizens and another corporate juggernaut, Verizon Communications. In this case, Verizon was threatening not to invest in a $250-million fiber-to-the-premises (FTTP) network throughout the state. The threat came in response to an increase in the rate Verizon is allowed to charge competitors to use its network. Verizon was hoping for an increase of at least $7 or so. They got one for less than $2. If this is how New Jersey treats its guests, Verizon suggested, maybe that FTTP network (and the jobs it will bring) can wait. A spokesperson for the state's governor called Verizon's stance "reprehensible." Verizon is reviewing its FTTP plans in Jersey for 30 days while Garden State officials ponder which they want more: jobs or competition.

It's an odd game of chicken, each side insisting that the other has more to gain by changing course. Who needs a fiber rollout more? New Jersey, which would get jobs and maybe economic development? Or Verizon, which would get a new revenue stream with which to combat wireline loss? I never know when to take these RBOC threats seriously. Regardless of New Jersey's UNE-P prices, fiber deployment is in Verizon's best interest; it's not a matter of charity. But does it matter to Verizon whether that deployment begins in New Jersey rather than New Hampshire? I don't have access to the numbers that might provide some answers. But I suspect I know what advice the people of Inglewood, Calif., would give.

E-mail me at egubbins@primediabusiness.com.