“Verizon intends to be out of the wireline business within the next ten years,” FCC filing

Completely correct only for three states.  Verizon & AT&T have decided to shut down at least 20M landlines between them, going wireless only, as I’ve reported several times. The evidence is in many state filings and financial reports. I believe the Florida Power & Light FCC filing in the title, while accurately quoted. was only meant to apply to the three FP&L states. In other states, my opinion is they will keep most but not all FiOS lines while dumping 10M lines of copper.  

“All the evidence shows that Verizon has been abandoning its efforts to build out wireline broadband. Verizon, in fact, has made clear it intends to be out of the wireline business within the next ten years, conveying this clear intent to regulated utilities in negotiations over joint use issues and explaining that Verizon no longer wants to be a pole owner. … Publicly available evidence abounds. … Verizon is obviously no longer interested in the wireline broadband business and sees its financial future in the wireless industry.” 

FP & L’s attorneys have written to me with the “three state” update. I’m pretty sure that Verizon intends to continue offering FiOS to 15M+ homes in it’s traditional Northeast region. It’s a good and profitable business, beating cable in some territories despite extremely high pricing. Verizon and AT&T have been coy on the subject. As far as I know, neither has ever gone on the record with how many lines they intend to scrap in favor of wireless.

They still make money on almost all those lines, which is why Frontier is paying so much for some of them. But they’d make more money if many of the customers switched to wireless, which in rural areas almost always has spare capacity/spectrum for VZ & T. They’ve also never indicated the book value on these lines, one of the reasons many believe both companies have more balance sheet write-offs to come. 

The single most important factor in the ~5M U.S. homes that can’t get even a quarter-decent Internet connection is the unwillingness of VZ & T to service them. Probably 2/3rds of them are in Bell territory and been told to “drop dead.” My friend Darcy Gerbarg has been working for several years to bring broadband to the unserved in Sullivan County (Upstate New York.) Neither Verizon nor Time Warner Cable is willing to service these people even though New York State will probably pay the entire cost.

The FCC since Genachowski has been sticking its head in the sand on this. This became obvious in 2009-2010 when nearly no one applied for the $5B or so in the broadband stimulus to reach the unserved. NTIA & RUS made the enormous error of spending the money on projects generally with little value. Now, the FCC is spending $B’s in CAF & USF that’s supposed to reach the unserved but nearly none have been connected. As a practical matter, no one except the local cable and telco can connect these very scattered remaining homes at plausible cost. Unless you already have local facilities close by, it’s prohibitively expensive to reach clusters that generally are only a few dozen homes.

Politics and incompetence like that, not unmanageable costs, are the real reason the U.S. and Canada have far more unserved than any other developed country, even when adjusted for population density.

Many thanks to Stop the Cap! and DSL Reports for pointing me to this story. 

The points the filing makes about Verizon not using the savings to build broadband are right on target, unfortunately. If the reading below on the requirements to do so is not contradicted, the FCC should get right back in. This looks like yet another case of the regulator believing a common lie of incumbent telcos: that money given or saved would be mostly invested in better networks. The EU, led first by Nellie Kroes, is getting that wrong in the tens of billions. Telcos are profit making companies and more likely to pass the savings/grants to their shareholders, not improved networks. 

 

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