Uncommon Wisdom

May 10 2010   5:55PM GMT

Verizon CEO eyes fiber-fueled future sans ‘voice-only’ service

Tom Nolle Tom Nolle Profile: Tom Nolle

Verizon CEO Ivan G. Seidenberg is no shrinking violet, as we all know. His recent comments on the company’s plans suggest that Verizon is essentially dividing residential customers into “video-potential” and “voice-only” categories and trying to sell off geographies where the latter would be the rule.

DSL has limited potential for exploitation because copper loop is limited, and Seidenberg is singing the praises of fiber to the home (FTTH). The challenge for Verizon is that, due in part to high costs, they can’t provide FTTH to everyone. Seidenberg also talked a lot about wireless, which leaves one wondering if Verizon is planning to sell off areas where copper wireline is the only option, focus on fiber where FiOS can penetrate, and let voice go to either wireless or to competitors. Changes to universal service to subsidize broadband might be a workable alternative, but it sure looks like the phone companies have decided that phones alone aren’t going to cut it for the future.

Whether copper-loop customers in areas that Verizon can’t sell off would eventually lose service is a question nobody can answer at this point. But it’s our view that Verizon is planning ways to cut the cord for these customers, moving them to mobile service to reduce infrastructure spending.

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