Verizon Gets Out of The Copper Business
by Mark Ontkush, Boston, Massachusetts, USA 
on 07.12.07
Copper hit $3.66 a pound today on the COMEX exchange - that's a lot. Copper is denser 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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No comment on the rest. But a cubic foot is 1728 cubic inches. If a cubic inch is worth less than a dollar, what idiot is going to pay over $2000 for a cubic foot?
[a cubic foot of copper weighs 559 pounds * 3.63 = $2045.94 mjo]
Verizon also buys telephone poles for their land line business that are treated with pentachloraphenol, a lovely-smelling compound that is rather toxic. If you live near one of the factories, the local EPA-types might ask you not to let your kids play outside for fear of contamination.
I would be very happy if they stopped using those...
From the Pittsburg Tribune-Review, January 29, 2006
"Today's pennies are copper-plated and mostly zinc. But from 1864 to mid-1982, the coin was 95 percent copper and weighed 3.1 grams.
With copper selling for $2.23 a pound, a pre-1982 penny actually is worth about 1.45 cents -- 45 percent above face value -- based on its copper content. "
So, today a pre-1982 penny is worth 2.38 cents.
[copper is way up since January, $3.36 a pound mjo]
Recycling all metal is smart.As far bas the cops waiting for ammo.Learn to reload ammo.New projectile ( bullet ).New primer.New gunpowder.Save the brass.I do it all the time.
It is probably easier to have a cell phone instead of a land line phone.It uses less wire.
The problem with switching to FiOS isn't that the network is any worse, it's that it's completely controlled by Verizon. Phone systems fall under common carrier rules, but fiber optic networks don't.
So there's really nothing stopping Verizon from charging folks outrageous rates to make phone calls or otherwise communicate with people who Verizon doesn't like. And if we start getting jerked around, there's no way for us to switch back to something that's regulated to protect the consumer.
Put fiber optic networks under common carrier rules, and we'll talk. I don't trust Verizon as far as I can throw them. I've had to many horrible experiences with them. I've taken them completely out of my life, though switching to Comcast is pretty much the lesser of two evils.
[Frankly, I have to agree with you. We switched from Comcast to Verizon FIOS and it took a week to get the line installed, a crew was here every day. The high point was the crew who rode out the last half hour of their shift watching TV on my couch!
Ultimately, we got 4 months of free service, but still mjo]
I once asked a Verizon installer guy I ran into on the street where I used to live about FIOS. I was curious about a timeframe for it's availability in the Philly suburbs (Jenkintown, Abington, Cheltenham, etc.)
While he didn't know, he told me one interesting point: Verizon has no intention of ever letting FIOS users go back to copper lines. He said they cut the line as part of the install process, and the policy is that those lines will never be replaced.
On a side note, he also said the FIOS box—which needs electricity to run—has a backup battery that will supposedly give you about 8 hours of phone power in a blackout.
[yes, they simply are not going to maintain two networks. It is true that you get a battery as part of the proces mjo]
Let's hope that only Vietnamese fishermen steal fiber optic cables, at least in the forseeable future ... :
http://www.thanhniennews.com/society/?catid=3&newsid=29347
[oops, theres goes the no stealing idea mjo]
One thing to consider with this pricing - The price on NYMEX/COMEX is for for futures contracts.
The scrap market generally does not pay that. For Copper wire the scrap market generally is paying .05 - .15 less / lb - so you would end up with an average price 3.516 (COMEX Copper closed at 3.616 for August).
Now, I am not saying that's not high (especially with copper being around 2.30 a pound in Jan of 06) but there is a difference between the market price and what scrap yards pay.
As far as it being, "explicitly illegal" to melt down currency... I know of no law that states this. It is illegal to destroy or deface currency specifically for the purpose of counterfieting it, but not otherwise.
[there is a law explicitly for melting
http://www.usatoday.com/money/2006-12-14-melting-ban-usat_x.htm
et. al.
mjo]
The reason Verizon is getting out of copper has nothing to do with the cost of buying copper. 99.999999% is already installed and built out. Rarely do they have to replace or run new cabling. Even when they do it is a negligable cost vs. the equipment feeding it. And don't think methheads won't steal/cut fiber only to realize it' not copper...but the damage is already done. Repairing a cut fiber costs a quite a bit depending on the damage. sometimes a 1/4 mile or more needs to be repulled and spliced. The reason they are getting out is copper really is a dead in in the long run. You can only do so much with it and it's distance limited where as fiber is not so much. A side benifit is to put the CLECs in a bind....
The reason Verizon is going to is because they have to, otherwise they won't be competitive in the communications industry. And this is not just Verizon. Every ILEC in the country is running fiber. Cut and dry all ILEC's are both losing land-line customer to VOIP, cell phones, and cable companies. Also they are losing money to mantain the copper network. They have to get into the Television game or they will go out of business. Another note, copper is completely inferior to fiber and people should be glad to have better technology.