We've noted several times how Verizon's sale of their DSL and landline assets to Fairpoint and Frontier was strategically brilliant (unless you're one of the impacted customers). Not only did Verizon sell both companies millions of neglected customers and lines they didn't want to maintain or upgrade, the deals offloaded huge amounts of Verizon debt onto these companies (driving Fairpoint into bankruptcy
) while netting Verizon a huge tax write off.
As I noted back in 2010
the best part for Verizon was the fact that after the smoke cleared, they could come back into these areas and market their more expensive fixed LTE Home Fusion
service to those same customers, luring them back to the Verizon fold under the much more profitable pay-per byte model.
Users in our forums
note that's exactly what's happening, with Verizon ramping up marketing for their Home Fusion service in Fairpoint's New Hampshire territories with door-to-door sales pitches:
I found a door hanger on my house today for Verizon's "Homefusion" 4G LTE broadband Internet service. The price is $60 for 10Gb/month standalone, or it can be bundled with an existing Verizon "share everything" plan (aka, "Share everything in your wallet with Verizon"). This is what many predicted years ago in the discussions during the Verizon asset sale. It will be interesting to see if there's any significant uptake of this offering; the price isn't too out of line with what Comcast or FairPoint charge, but the data limit is significantly less.
Verizon's offering new customers double the regular LTE data allotments (starting at 10GB for $60 a month) for the first two months of a billing cycle. While broadband-educated readers might wonder why any user would migrate from unlimited DSL to capped LTE, keep in mind the reliability of many of these lines has not been stellar, and the majority of American consumers still don't even know what a gigabyte is, the $60 base price tag is also comparable to DSL, and in many instances LTE users see faster speeds.
Both Fairpoint and Frontier executives were either oblivious to this outcome, or simply figured the explosive and barely manageable growth was worth it. Both companies continue to struggle with finances, aren't really able to expand next-generation broadband in any meaningful capacity, and will continue to lose POTS and DSL customers to wireless in droves. Why some Wall Street analysts remain bullish
on the prospects of either company continues to be a question for the ages. Both companies are going nowhere -- slowly.