The worst disaster: no signal. Also, hurricanes.
To be reliable at times of need, Verizon must protect its assets to be more resilient to climate change and increased variability.
The telecommunications sector
The telecommunications sector provides the ability to communicate or access information, and therefore facilitates the functioning and connectivity of the United States economy. It is the basic infrastructure governments, companies, and citizens depend on, and therefore disruptions in this sector ripples throughout the entire economy.
Climate change and variability threaten the infrastructural integrity and productivity of this critical sector both directly and indirectly. Changes in temperature norms directly impacts the physical assets of telecommunications companies which were designed to function within specific climate and environmental conditions, potentially increasing the frequency and severity of disruptions. Increased likelihood of more extreme weather adds pressure to match those probabilities with more resources for better prevention and contingency plans which can be costly. On top of that, global regulations of reducing greenhouse gas emissions forces these companies to reassess the true costs and externalities of energy sources, and to manage the company’s carbon footprint overall.
Verizon Communications Inc.
Verizon is a leading telecommunications company in the US, providing voice, data and video services through wireless and wireline networks to deliver customers’ demand for mobility, reliable network connectivity, security and control 1. Verizon’s $220B of physical assets (80% of which is network equipment which consists primarily of cable in aerial, buried, underground or undersea)2 is exposed to climate change which can directly impact Verizon’s core capability of delivering connectivity 3:
These events could also damage the infrastructure of the suppliers that provide Verizon with the equipment and services needed to operate. While Verizon have preventative measures against these changes (pressurized cables to keep water out for example 4) extreme events such as Hurricane Sandy that struck the Northeast in October 2012 showed Verizon first-hand that their infrastructure and operations were not able to cope with extreme weather. Flooding and storm surges caused power failures, and inadequate backup generators rendered many sites inoperable. The storm also caused significant physical damage, knocking out 25% of all cell towers in an area spread over the coasts of 10 states.
In addition to these direct impacts, Verizon must comply with the global efforts of reducing carbon emissions, pressuring the company to monitor carbon efficiencies and long term sustainability. Verizon’s carbon efficiency metric, unveiled in 2011, divides the company’s carbon emissions in metric tons by the amount of data it transports (in terabytes). The carbon emissions used in the metric include electricity, building fuels, and vehicle fuels, and Verizon plans to cut emissions by 50% of 2009 levels by 20205.
Making changes
Verizon is taking opportunities like Sandy to modernize sections of its network to technology more resilient to climate changes, and increasing reliability in general. Below are some of the steps Verizon has taken for reliability particularly in times of emergency when they are needed most 6:
- Processing centers in some states designed to withstand Category 5 hurricanes
- Hardened shells
- Large-scale on-site power generation
- Fleets of mobile communications units
- Cells on Wheels (COWs)
- Cells on Light Trucks (COLTs)
- Cellular Repeaters on Wheels (CROWs)
- Generators on a Trailer (GOATs)
- Back-up generators built directly into cell sites
- Maintain coverage even in events of prolonged power outage
- Dedicated, trained employees for crisis management
- Works in close conjunction with police, fire, and other public safety agencies
To address long term sustainability, Verizon reducing the carbon dioxide equivalent per terabyte to 48% of 2009 levels 7 and is investing in green energy investments, building improvements, and fleet operations to reduce carbon footprint 8.
Food for thought
Climate change and variability adds an expensive dimension of uncertainty that burdens Verizon with massive additional direct and indirect costs. While an argument could be made that Verizon has a corporate and social responsibility to provide communication services to customers at times of need, who should bear those additional costs? Verizon could continue investing in the resilience of their assets and managing their carbon footprint, but the consumers, the government, and the telecommunications sector will need to balance how to pick up the bill.
Sources
[1] Verizon Communications Inc. Form 10-K, p1, US Securities and Exchange Commission, February 2016
[2] Verizon Communications Inc. Form 10-K, p20, US Securities and Exchange Commission, February 2016
[3] Peter Adams and Jennifer Steeves, “Climate Risks Study for Telecommunications and Data Center Services”, Riverside Technology and Acclimatise, 2014
[4] Grand Brunner, “Hurricane Sandy damaged Verizon’s network but clever technology saved the day”, ExtremeTech, November 2012, https://www.extremetech.com/extreme/141128-hurricane-sandy-damaged-verizons-network-but-clever-technology-saved-the-day accessed November 2016
[5] Leon Walker, “Verizon Aims to Cut Carbon Intensity by Half by 2020”, Environmental Leader, March 2012, http://www.environmentalleader.com/2012/03/20/verizon-aims-to-cut-carbon-intensity-by-half-by-2020/, accessed November 2016
[6] Verizon Website, “Prepared to weather the storm”, http://www.verizon.com/about/emergency-information/prepared-weather-storm, accessed November 2016
[7] Verizon Website, “Emissions Profile”, http://www.verizon.com/about/responsibility/emissions-profile, accessed November 2016
[8] Verizon Website, “Sustainability”, http://www.verizon.com/about/responsibility/sustainability, accessed November 2016
The Fleets of mobile communications units (COWs, COLTS, CROWs, and GOATs) are interesting and potentially a game-changer in the event of a natural disaster. It sounds as though Verizon has already invested in them, yet will get 0% utilization until a natural disaster event. Is there any way to include them in current operations to achieve some level of usage? It also seems as though the government would find value in subsidizing sustainable communications infrastructure for the exact reason of crisis management.
Bad Hombre, great post. I too recognize the utmost importance of telecom assets to continue functioning during natural disasters simply because all other rescue and reconstruction activities heavily depend on them. However, most of your comments are around how Verizon prepares to react to a natural disaster. However, are you aware of any preventive measures Verizon in particular and carriers in general are taking to stop climate change?
Bad Hombre, thanks for this informative piece on Verizon’s emergency preparedness infrastructure. I’m curious to understand more along two aspects of their business: (1) how Verizon’s infrastructure / business operations contribute to climate change and (2) how specifically they have been able to reduce their CO2 emissions per terabyte.
Additionally, I’d be curious to see if Verizon has done any work around recycling or re-using materials. I assume they are only of the largest distributors of devices in the United States and image that they could help prompt millions of consumers to make more green choices when they upgrade their phone.
While I can see that the costly measures to bolster Verizon’s infrastructure may be able to be passed on to some degree to consumers and the government, I think Verizon should still bear the majority of this cost. Verizon’s customer promise is fast, reliable service at competitive prices, and whatever Verizon needs to do to continue to provide that promise, they should do it. Can you imagine – they air ads claiming:
biggest, baddest, most reliable 4G LTE
+ fine print: except when it rains, snows, gets hot outside
+ fine fine print: except when you pay 2x more
I’m not sure that will fly with consumers, who may turn to competitors if they lose trust in Verizon’s value prop.
P.S. Great title 🙂
Great piece! Do you think the increase in number of hurricanes and other natural disasters could push for further development of substitute technologies to telecom towers? Today we still rely on telecom towers to connect 2 mobile phones to each other, but we could imagine these towers being replaced by satellites or other floating devices. That would be expensive but less subject to natural disasters, and also less polluting (you can’t pollute the air in space, because there’s no air!).