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FiOS Is Ok, But LTE Is Verizon's Real Power Play
Sell off unwanted networks and union workers, then win users back with LTE
by Karl Bode 02:03PM Friday Jan 29 2010
Earlier this week we discussed how Verizon executives are completely reshaping their company, shifting the focus from DSL and copper phone service, to more profitable wireless and selective fiber deployments. While the plan is obvious from a business perspective, the shift has some serious downsides, including hanging up on huge numbers of rural Americans, who are still on taxpayer-subsidized copper networks. It also involves laying off a significant number of workers -- which conveniently for Verizon can be blamed on a sour economy.

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In addition, Verizon's use of Reverse Morris Trusts to offload these networks has resulted in buyers taking on too much debt, then falling into bankruptcy (see: Hawaii Telcom and Fairpoint Communications). The only real winner in these deals so far has been Verizon, who also gets huge tax breaks, big debt reductions, and eliminates networks (and the union workers) they want nothing to do with.

Unfortunately for consumers in these markets, they go from a company who didn't want to upgrade or expand broadband, to carriers who can't afford to upgrade or expand broadband.

But there's a wild card in this equation that might turn out to be good news for both consumers in these markets and Verizon: LTE (Long Term Evolution). Verizon will launch LTE in twenty five to thirty markets this year, with plans to have their entire wireless network upgraded by the end of 2014. An individual involved in Verizon's LTE deployment tells us that Verizon is eager to use LTE to not only take aim at slower DSL subscribers (hello, AT&T, Qwest) but also subscribers in the markets they just got done offloading.

"I am very much involved with Verizon’s LTE deployment, and they plan to have ubiquitous service in 48 states - if they can get sufficient backhaul," says the source. "Ethernet is required at every site, not too much of a problem in downtown Atlanta but a major nightmare in Wilkes-Barre, Pennsylvania," they say. "I think Verizon will be going after not only AT&T’s customers but the customer’s they are selling to Frontier and Fairpoint as well."

Though it raises an ocean of ethical questions, it's masterful from a business perspective. Verizon offloads old taxpayer-subsidized copper they didn't want to support, to companies willing to soak up Verizon debt. Then Verizon uses LTE to return to those areas at a later date and pluck up customers looking for something more than aging DSL service. In the process they get rid of the union workers and regulators complaining the company isn't spending enough on DSL and landline support. Verizon spent $9.36 billion on 700 MHz licenses for all 48 lower states, and they're several years ahead of AT&T in the LTE deployment race.

"700 MHz works very well, penetrates walls without difficulty and is not affected by trees, the enemy of most all wireless transmissions," says the source. "Verizon will compete with AT&T and the companies that bought their antiquated copper plant by offering a superior voice product (VOIP over LTE), excellent data speeds and they won’t have to bear the incredible expense of maintaining a copper plant."

Verizon has already stated that they're going to launch LTE at somewhere between 5 and 12 Mbps downstream. There's still no word on pricing and caps. Verizon keeps making hints that they're interested in a metered model for LTE, but potential DSL converts won't be lured by LTE if caps are too low, and monthly rate and overage pricing is too high. LTE theoretically is capable of speeds up to 80 Mbps. Assuming Verizon's able to get backhaul to these fringe markets, LTE is going to be Verizon's ace in the hole over the next ten years.

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ssavoy
Premium
join:2007-08-16
Dallas, PA
Reviews:
·Anveo

Wilkes-Barre

I live 10 minutes from Wilkes-Barre. Yeah, it's definitely not the nicest place in the world, but it shouldn't be that hard to wire. Anyone want to elaborate?

Verizon provides service to most of Wilkes-Barre. Otherwise, it's Frontier. And Frontier...well, they're just Frontier...failure all around.
--
»www.speedtest.net/result/598063272.png

Karl Bode
News Guy
join:2000-03-02
kudos:42

Re: Wilkes-Barre

I grew up an hour north. I agree, it's not heaven, but it's not Antarctica.

Wasn't there a guy with big hopes of running fiber throughout sewer lines in Wilkes Barre?
ssavoy
Premium
join:2007-08-16
Dallas, PA
Reviews:
·Anveo

Re: Wilkes-Barre

I did hear that somewhere. Wilkes-Barre wanted to do their own WiFi network, but Pennsylvania doesn't allow municipalities to do it themselves anymore (surprise!), so Frontier does it now. Regardless, Comcast is really the only good provider of service around here.
--
»www.speedtest.net/result/598063272.png

FFH5
Premium
join:2002-03-03
Tavistock NJ
kudos:5

Will LTE be pitched for fixed wireless to the home?

Some questions that need to be answered are:

Will Verizon pitch LTE as a product for fixed wireless to the home and not just a mobile wireless service? Will their be an LTE/WiFi router for home service?

And will there be external antennas offered to get the best bandwidth speeds possible inside the house?

If they are serious about competing against landline DSL or cable services by their competitors, this would make sense. Especially in areas where they don't offer Fios.
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CurGeorge8

join:2005-05-02
South Park, PA

Re: Will LTE be pitched for fixed wireless to the home?

I was thinking along the same lines. I can imagine some sort of GPS receiver on the modem (much like their femcells have now) that verifies the location of the modem operation. That or tie the mac address into the tower that the modem will be used at so that it can only send/receive data from one source.

I used to live in a semi-rural town that wasn't hard wired for HSI, so a local business operator put wi-fi antennas on top of a water tower, and then distributed outdoor antennas to all of their customers to be mounted and pointed to said tower. Worked well, except for ridiculously high latency in rain storms.
iansltx

join:2007-02-19
Austin, TX
kudos:2
Sounds like this is their strategy actually. SOrt of similar to what Sprint is working on with WiMAX, except theoretically faster and with better coverage...

tiger72
SexaT duorP
Premium
join:2001-03-28
Saint Louis, MO
kudos:1

1 edit
I'm not sure Verizon has enough spectrum capacity to really deploy this as a home broadband replacement for most of the country. Clearwire definitely benefits from it's large holdings (~120mhz nationwide) in the 2.5ghz range. 2.5ghz also allows for more capacity than 700mhz. And Verizon only has about 34mhz of 700mhz holdings in most major markets. Couple the smaller spectrum holding with the lower capacity of 700mhz, and I just don't see how VZW can offer a home broadband replacement via LTE like Clearwire can via WiMax... At least not without destroying that CDMA map they're so proud of.
--
"What makes us omniscient? Have we a record of omniscience? ...If we can't persuade nations with comparable values of the merit of our cause, we'd better reexamine our reasoning."
-United States Secretary of Defense (1961-1968) Robert S. McNamara

Sabre
Di relung hatiku bernyanyi bidadari

join:2005-05-17

Re: Will LTE be pitched for fixed wireless to the home?

For home broadband, I don't think they're offering a replacement so much as an option.

As previously pointed out, a lot of those rural customers (of which I may soon be one) don't have options. Cable HSI is spotty if they choose not to wire your street, satellite is a non-starter, and for those poor Fairpoint/etc. people, DSL lacks appeal if provided by a company that's buried under debt.

That's the market this would be aimed at. Fixed wireless via LTE probably wouldn't fly in cities, for precisely the reasons you raise. But out in Appalachia and the like (which isn't always as poor/hickish as stereotypes make it out to be) it would be a very appealing option, if decently reliable.
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iansltx

join:2007-02-19
Austin, TX
kudos:2
Reviews:
·Time Warner Cable
·Verizon Online DSL

Re: Will LTE be pitched for fixed wireless to the home?

True. 5-12/2-5 Mbps could probably be sold for $50 by Verizon, plus VoIP of some sort (maybe another $40 for unlimited local and long distance). Wouldn't be FiOS, but would beat DSL more often than not on speed and the price is about what people will pay for service in those areas.

Matt3
All noise, no signal.
Premium
join:2003-07-20
Jamestown, NC
kudos:12

Re: Will LTE be pitched for fixed wireless to the home?

said by iansltx:

True. 5-12/2-5 Mbps could probably be sold for $50 by Verizon, plus VoIP of some sort (maybe another $40 for unlimited local and long distance). Wouldn't be FiOS, but would beat DSL more often than not on speed and the price is about what people will pay for service in those areas.
Hell, that would beat Road Runner in most areas too.
iansltx

join:2007-02-19
Austin, TX
kudos:2

Re: Will LTE be pitched for fixed wireless to the home?

True, though it looks like TWC is slooowly rolling out 15/2 as their highest tier across all markets. Or 15/1 anyway.

Matt3
All noise, no signal.
Premium
join:2003-07-20
Jamestown, NC
kudos:12

Re: Will LTE be pitched for fixed wireless to the home?

said by iansltx:

True, though it looks like TWC is slooowly rolling out 15/2 as their highest tier across all markets. Or 15/1 anyway.
They need to hurry the hell up here, we're still 7Mbps/384Kbps or 10Mbps/512Kbps.
iansltx

join:2007-02-19
Austin, TX
kudos:2

Re: Will LTE be pitched for fixed wireless to the home?

Hopefully NorthState will start doing pair bonding and offer something better than 768k up, and CenLink will do 25/2 pair-bonded...

Matt3
All noise, no signal.
Premium
join:2003-07-20
Jamestown, NC
kudos:12

Re: Will LTE be pitched for fixed wireless to the home?

said by iansltx:

Hopefully NorthState will start doing pair bonding and offer something better than 768k up, and CenLink will do 25/2 pair-bonded...
I have 15/2 from NorthState over fiber (grandfatherd in tier and could have ordered 30/5), but it will take Time Warner to up their speeds before NS will offer anything higher. They don't need pair-bonding to offer more than 768Kbps up, they are doing that now because at twice the speed of their competition, they can.
iansltx

join:2007-02-19
Austin, TX
kudos:2

Re: Will LTE be pitched for fixed wireless to the home?

Right, saw that. Sad to see a company actually DOWNGRADE their offerings due to lack of competition (and interest?)

Matt3
All noise, no signal.
Premium
join:2003-07-20
Jamestown, NC
kudos:12

Re: Will LTE be pitched for fixed wireless to the home?

said by iansltx:

Right, saw that. Sad to see a company actually DOWNGRADE their offerings due to lack of competition (and interest?)
The official line is they didn't want to offer disparate packages to fiber customers and to ADSL2+ customers who subscribed to IPTV. Their ADSL2+ circuits didn't support more than 768Kbps once you throw IPTV into the mix. I was also told by a technician they aren't delivering IPTV over copper at all, so who really knows?
sonicmerlin

join:2009-05-24
Cleveland, OH
kudos:1
said by iansltx:

True. 5-12/2-5 Mbps could probably be sold for $50 by Verizon, plus VoIP of some sort (maybe another $40 for unlimited local and long distance). Wouldn't be FiOS, but would beat DSL more often than not on speed and the price is about what people will pay for service in those areas.
Why would they need to charge separately for VOIP?
iansltx

join:2007-02-19
Austin, TX
kudos:2

Re: Will LTE be pitched for fixed wireless to the home?

Because they make money that way, and everyone else charges separately for VoIP?
iansltx

join:2007-02-19
Austin, TX
kudos:2
Reviews:
·Time Warner Cable
·Verizon Online DSL
Actually, 700MHz propagates MUCH farther than the 850/1900 EvDO that Verizon is using right now.

Also, if Verizon wants to do high-capacity (versus long-reach, which seems to be the focus with LTE-700) they can turn the pwoer on their transmitters down (way down) and deploy towers closer together.
mobbo

join:2005-04-13
Denton, TX
If they do, they MUST do better than Clear has done. Their signal cannot penetrate walls very well and flat-out does not work in houses with energy-efficient windows. Plus, the Motorola modem has no external antenna capabilities.
BosstonesOwn

join:2002-12-15
Wakefield, MA
Reviews:
·Verizon FiOS

Re: Will LTE be pitched for fixed wireless to the home?

I have a zyxel worldwide wimax modem with external antenna panels for each area of the world.

It works indoors very well around here , not exactly a great broadband option compared to comcast but i works well behind all my energy efficient windows .
--
"It's always funny until someone gets hurt......and then it's absolutely friggin' hysterical!"

Matt3
All noise, no signal.
Premium
join:2003-07-20
Jamestown, NC
kudos:12
said by mobbo:

If they do, they MUST do better than Clear has done. Their signal cannot penetrate walls very well and flat-out does not work in houses with energy-efficient windows. Plus, the Motorola modem has no external antenna capabilities.
700Mhz for LTE vs 2.x GHz (anyone know for sure?) for Clear. World of difference.
iansltx

join:2007-02-19
Austin, TX
kudos:2

1 recommendation

External antenna is TBA, but 700MHz penetrates where 2500MHz doesn't. It's just plain RF stuff. If Clear deployed WiMAX on 700MHz they wouldn't have those problems.
mobbo

join:2005-04-13
Denton, TX

1 edit

Re: Will LTE be pitched for fixed wireless to the home?

I've seen some pretty ambitious amateur rigs for outside solutions... including a guy putting the Motorola modem in a big plastic trash can on a pole above his house I wouldn't do that but I would consider it if my only other option was dialup.

Edit: BTW... its not just the horrible signal, their coverage maps are total BS. Despite the big green SOLID blob of coverage on their website for DFW, I have attempted to get Clear service on 5 (not kidding) different locations all over metro DFW for various construction jobsites and NONE had coverage. The coverage is full of holes. I'm batting 0 for 5 in attempts to get coverage in a supposed "covered" region.
kem09030

join:2004-11-29
Rushville, IL

Re: Will LTE be pitched for fixed wireless to the home?

Remember that these are both going to be totally new networks so right off they aren't going to be great. It will take time for the networks to mature just like the cellular networks took time to mature. Give it a few years and things should get much better for the 4G networks.

tim_k
Buttons, Bows, Beamer, Shadow, Kasey
Premium,VIP
join:2002-02-02
Stewartstown, PA
kudos:40
said by FFH5:

Will Verizon pitch LTE as a product for fixed wireless to the home and not just a mobile wireless service? Will their be an LTE/WiFi router for home service?
I would think it would work the same as WiMAX and 3G work now. Those of us with few broadband options buy a 3G/4G router and connect the USB device to it.
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InfinityDev

join:2005-06-30
USA

1 recommendation

wooing them

"potential DSL converts won't be lured by LTE if caps are too low, and monthly rate and overage pricing is too high"

If it's a broadband duopoly then they won't really have a choice will then? Their DSL provider will likely have caps by then, too.

Tsume
Premium
join:2004-02-23
Johnson City, TN
Reviews:
·Comcast

Re: wooing them

If it's anything like the pathetic 5gb cap they have on their 3g network, I don't think anyone will want to switch. Most DSL providers do not cap and don't have a real reason to since it's so ridiculously slow in many areas it would be impossible to hit the cap.

On the other hand, if they do have a cap BUT it's something reasonable like Comcast's cap I don't think that would affect the decision to migrate to VZ LTE for the vast majority of users.

Only time will tell, but Verizon Wireless is currently a disappointment in the cap department with their paltry 5gb cap.
the cerberus

join:2007-10-16
Richmond Hill, ON

Meh at least they dont claim up to 80mbps at launch..

Rogers, Bell and Telus all launched HSPA+ networks in Canada last year and they all claim up to 21mbps.

Actual throughput is not even 7mbps.

Its all well and good to upgrade your up-to's, but if the consumer will never get to use it, was it really worth it?
horseshoe
Premium
join:2006-10-11
Upland, CA

It's coming, it's coming..........

For a long time the mantra was FIOS is coming, FIOS is coming, be ready in your neighborhood, the trucks are coming, the wire is being laid, hurry folks, Verizon here to the rescue, with FIOS.
Now it is the same melody: LTE is coming, LTE is coming, chorus here...
RIP FIOS, chorus out 3/4 time...

ironwalker
World Renowned
Premium,MVM
join:2001-08-31
Keansburg, NJ

VZ and VZW?

I thought verizon wireless was a seperate entity from Verizon.
Fios is verizon's puppy and LTE is verizon wireless' puppy....whats the story here?
horseshoe
Premium
join:2006-10-11
Upland, CA

Re: VZ and VZW?

Related cousins are sometimes called kissin' cousins?
vz tech4

join:2009-09-18
Pittsburgh, PA

1 recommendation

Looking for a job...

LTE = LESS TECHS EVERYWHERE!
Ulmo

join:2005-09-22
Aptos, CA

Sounds nice

Of course, how soon and how much will determine its success or failure. It seems like they may be poised to succeed with this, if they can get it rolled out now.

Did I read 2014 somewhere? If so, at 14Mbps it'll be an also-ran, and they'll have to chain people to it to make them interested within a year or two of that. I don't know the cost to deploy LTE.

However, even past 2015, I can see the fact that it uses 700MHz tree-and-wall-penetrating spectrum as a feature unto itself, offering solid service for those needs where bandwidth is not a large concern (i.e., slow slow slow stuff, like voice and cash registers).

If indeed they can bump up the speed to 80Mbps, or even half that, between now and 2013, then they can begin 1080p delivery, and the old-fashioned TV and Movie model supported by Netflix instant watching and Directv Video on Demand and whatever Verizon TV services are offered could still be sold to customers, and put a few more pennies per minute in the hat. After all, with a good codec (using AVC/H264 as a baseline), 1080p can fit well within that bandwidth level, albeit not so much in the "14Mbps" they were earlier touting (although that may be feasible to some degree, but will anyone buy it if it's squeezed?).

Where they might really have something to write home about is that LTE as a mobile platform might actually work out, if use patterns of mobile units continue to include non-voice applications that use bandwidth that the medium-level LTE bandwidths can deliver (more bandwidth than voice, less bandwidth than normal stuff like web sites and movies).
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

lipstick on a pig

sounds nice for the company... use 1/20th the infrastructure costs, 1/30th the service personnel (not to have to maintain a copper plant in each town of over 1000sq feet), etc. then come in and take over areas in the country not yet deployed or upgraded by at&t, comcast, qwest. one sticking point could be the wireless licenses. there's no way the fcc is just going to "give away" 700mhz to verizon across the lower 48 so easily or cheaply. i'm not saying there isn't a way to get there... the roadblocks being taken down by the supreme court seem to make this strategy much more obvious, but I think the public will have something to say about this in large numbers. if the crap done by comcast, and at&t are any indicator.. consumers will want INSURANCE of competition, this just makes verizon have a tighter, leaner monopoly and doesn't do much for the consumer other than tighten verizon's grip on the industry.. and trying to outmode at&t and all the cable companies combined before they even have a chance to compete in wireless.
marvin25

join:2010-01-31
Sierra Vista, AZ

Verizon

The LTE is a gamble that Verizon is doing but doesn't expect to win and should lose its shirt as the person who wrote the article doesn't understand what is going on in communication, It seems that Verizon was kicked out of rural America by an ISP and sold ot Frontier in order to have them go out of business. They forget that Sprint is being financed by the biggest ISP in the US right now and it is going to have 4 G as fast possible with complete funding while Verizon has to find the business completely, If this ISP goes into an area that Verizon is in they go under in the area. They can't compete with this ISP and the person should learn what is happening in the communication system. Verizon is one step of going under and it doesn't have the means to support itself as the author is stating. He is thinking about happened year or so ago. The conditions are completely different and the whole Internet is completely different then what you have learned. My advice is go back to studying what is happening in the Internet. When you learn what is happening you will learn that is the way for Verizon to go out of business. They don't have the resources to compete against Sprint as Sprint has unlimited resources to go against Verizon period. They also have the greatest data system in the US and the ISP is the biggest in the US and it is not cable or telecoms, Each time Verizon went against this ISP it lost.

tschmidt
Premium,MVM
join:2000-11-12
Milford, NH
kudos:9
Reviews:
·G4 Communications

Re: Verizon

Interesting assertion. Could you provide some links backing up your claim or is this a tongue in cheek post?

Living in New England I'm upset they sold their landline/DSL business to FairPoint but have to admit they have the best Cellular Coverage in the area and have been very aggressive with Fiber in areas they serve. I think being aggressive rolling out fiber will serve them well over the years.

/tom
marvin25

join:2010-01-31
Sierra Vista, AZ
This is not tongue and cheek as you talked about. There is an ISP that works thru the electric coops and is the biggest ISP in the US. No one wants to admit they exist as believe in net neutrality and they can handle broadband as nothing. This is why companies are moving to rural America and they have all the companies talking about people getting their entertainment from the net. This is the ISP and this is where all the content provider send to this one ISP. Comcast and Vereizon lose their customers fast and this is the reason why Comcast want to stop buy NBC to kill the free entertainment and don't care about the cost. They are worried that they will have shut down cable areas in rural America as they don't have enough customers. Verizon tried to fight them and lost quickly. They are the reason that content providers don't have to worry about ATT remarks as they said do it and we would cut you off. They know this ISP is handle all the volume these content provider can send with no problem.

smee

@myfairpoint.net

Keep Verizon out

Verizon Corporation led by Ivan the Terrible is not wanted anywhere in the New England States after the atrocity he dumped on us. State regulators must stop the RMT deals granted to Verizon in Hawaii and NE, and then deny license to operate in the states he dumps. All fair as far as I am concerned. He can go to Hll