wireline

Verizon Profits Down

July 27, 2009

After dumping New England on Fairpoint and cashing in on that garage sale, Verizon bought Alltel. Now it is dumping more rural lines on Frontier. All of this is just Verizon's way of shoring up its stock report. Without the kickers from the Fairpoint transaction and the spurt from Alltel, my bet is that the company would be showing a loss.

Posted in Marketing, cellular, economy, fiber, wireless, wireline

Verizon's Forbearance Strategy

July 8, 2009

Doug Mohney tweeted this morning that Verizon has a 7-day repair window which may be why they are losing landlines. I would suggest that the RBOC have been lobbying since 282 Relief for Forbearance relief as well - at both the state and federal level. For the most part they have won.

Gone is the regulation for most telecom services in most states, which means the state PUC cannot deem that POTS lines be fixed in 24 hours (the old standard), especially when Digital Voice (VOIP) is dependent on broadband that does not have an SLA or mean-time-to-repair.

After VZ's 6-city forbearance petition was struck down in 2007, VZ legal took it to the court system and won a review by the FCC.

By letting landlines go, the majority of the existing POTS type service will go to cable or other providers, which would almost insure that VZ would get forbearance on a new review. Slick and devious.

Posted in FCC, telco, wireline

USF and Rural Reform

July 4, 2009

In a recent conversation with a buddy of mine at a state PUC, we were discussing small rural ILEC's. Many are cash strapped which makes providing advanced services difficult - no cash to buy a head-end (half a million or more).

RLEC's can get RUS loans for the upgrade to fiber, but OPEX and labor for installation are not covered by the loan. That creates a quandry.

Why are the RLEC's cash strapped? They get all that Universal Service funding (both state and federal).

Posted in broadband, telecommunications, wireline

Bells Giving Up on Landlines?

July 2, 2009

We see the consolidation in the rural landline business. Verizon has dumped unwanted regions on Hawaii Telecom, Fairport (New England), Alltel (old GTE areas like Eastern KY), and soon the Frontier deal.

Centurytel and Embarq just merger. It was May, 2006 that Sprint spun off its wireline business into Embarq. Alltel followed suit with a spin-off of its landline business to Windstream which was a merger of Valor and Alltel.

The RBOC's have tried to staunch the landline slide, but I think now that they have declared themselves wireless companies, have given up the ghost. Verizon is now advertising to consumers to cut the cord.

Posted in cellular, wireline

Why Can't DC See What We See

June 26, 2009

I'm not the brightest guy in the world. Yet over and over I see politicians and regulators make decisions that the other 99% of the US knows will be bad news. One such decision: approving the sale of Verizon's New England region to Fairpoint.

For one thing, agents can no longer sell in that region because Fairpoint thinks they can sell better than a telecom agent can. Ha!

Posted in FCC, mergers, politics, wireline

Birch Ownership

June 1, 2009

From an FCC Filing by Birch:

On May 11, 2009, Birch Communications, Inc. (f/k/a Access Integrated Networks, Inc.), Birch Telecom, Inc. (BTI), and BTI's certificated subsidiaries, and Cleartel Communications, Inc. and its subsidiaries, Cleartel Telecommunications, Inc., IDS Telcom Corp., nii communications, ltd., Now Communications, Inc., Supra Telecommunications and Information Systems, Inc., and Telecon Communications Corporation, filed an application pursuant to section 63.03 of the Commission's rules seeking approval to complete a proposed transaction whereby Assignees will acquire substantially all of the customers, customer accounts, and telecommunications assets of Assignors.

The interesting part is this statement: "BTI is a Delaware corporation, and together with its subsidiaries, is wholly-owned by BCI, a Georgia corporation. .. The following U.S.

Posted in CLEC, FCC, mergers, telecommunications, wireline

A Rural Super Carrier?

May 18, 2009

With VZ shedding its last bit of rural landlines to Frontier, the blogosphere is alive with talk about Super RLEC's - Frontier, Fairpoint, CenturyTel, Windstream and maybe Qwest.

CenturyTel's coming merger with Embarq will give it the title as a top 5 ILEC is size. But these are declining assets as landlines are being shed for cellular and to some extent VoIP. How Super is that?

Telecompetitor writes, "For carriers that lack wireless assets, building the scale that can create operational efficiencies and provide the means to profitably build and leverage broadband applications is paramount for future survival."

Building Super isn't easy.

Posted in mergers, telco, wireline

VZ Gets Rid of 13 States

May 13, 2009

Although it was AT&T's CEO that said We are a Wireless company, it is the actions of Verizon that make you stand up and take note. Today, VZ reached a deal with Frontier - a $8.6B all-stock deal. As Frost & Sullivan analyst Vanessa Alvarez tweets, "$VZ and Frontier will create company called Spinco, $VZ will still own 68%." It looks like another Fairpoint deal. The only happy camper is VZ.

Posted in mergers, wireline

Windstream Buys ICP

May 11, 2009

Thanks to the Arkansas Democratic Gazette for the chart.

Despite a big drop in earnings and revenue for the first quarter 2009, Windstream still managed to buy some more lines and customers by snatching up D&E Comm.

D&E Communications is an ICP, an integrated communications provider, offering residential Voice, Video, Broadband and On-Site Computer Support services as well as business-class Networking, Business Continuity, IT, Security, Voice and Training solutions. D&E is an ILEC and a CLEC.

This stock-and-cash deal (worth about $330M) "nearly doubles the company's operating presence in Pennsylvania with the addition of approximately 165,000 access lines and about 44,000 high-speed Internet customers." That's about $2000 per subscriber.

"D&E Communications generated $148 million in revenue and $64 million in operating income before depreciation and amortization (OIBDA) in the twelve months ended March 31, 2009." So the buy is about 2x Annual Revenue for those hoping to play at home.

"The transaction also includes six wireless licenses for 700 MHz spectrum covering a population of approximately 1.3 million in central Pennsylvania," according to the press release.

While Windstream isn't having a strong quarter with dipping revenue, it is doing okay selling Internet and TV.

Posted in CLEC, Internet, mergers, spectrum, telco, video, wireline

Compare the RBOC Profit

April 21, 2009

There are only 3 RBOC's left: AT&T, Verizon and Qwest. In the new Fortune 500 listing, telecom has 21 companies listed. The top 2: Ma and Pa Bell. AT&T has revenue of $124B. VZ is $97B.

Posted in cableco, economy, telco, telecommunications, wireline

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