Hub snub might be a good thing

At the beginning of the year, I made kind of a big deal [1] about Verizon's next-generation home phone, the Hub. I really wanted one, but ultimately was turned off by the overall price involved for the device, service and cancellation fee. I also thought we were entering the Year of the Femtocell, in which a multitude of companies might come forth with new home phone systems and new appeals that might revitalize the residential phone market, making it a more competitive arena of VoIP, wireless and increasingly-cheaper landline options. The Hub wasn't really a mobile network femtocell, but was at least a step in that direction.

After checking back on the Hub every few weeks to see if the price was coming down [2], I finally lost interest in it this summer. But, just the other day, I got curious about the Hub again as a discussion of O'Shea household finances finally led to a declaration of disbelief on the part of half the household (my wife) that I had never switched our phone service earlier this year when it was all I ever talked about. Cowed, I almost signed up for Comcast Digital Voice that very minute to show the Mrs. I really meant business, but then I decided I should go check out the Hub again. I hadn't heard much about it lately, and maybe Verizon had slashed the price.

Yet, on the Verizon website, I couldn't find the darn thing and the next day I found out why. Verizon didn't slash the price; it slashed the whole thing, announcing this week that it is discontinuing the Hub [3]. One might assume the Hub didn't sell well, though Verizon has not indicated that as the case. In the initial months the Hub was available, there were user complaints posted at FierceTelecom and elsewhere that the device was hampered by its limited Internet functionality and not-so-great battery life, among other issues.

The Hub's demise comes at a very interesting time for big telcos like Verizon. The chief executives of Verizon and AT&T were recently heard to change their tone [4] about the whole problem of landline loss. Verizon also has been experimenting with service bundles that don't include landline service [5]. Now, it's not really much of a problem at all, because their business models rely more on broadband, TV and wireless. Why put another voice and Internet end user device on the market and position it as a next-generation home phone when your own mobile phones (and netbooks) do that job increasingly well? Why try to urge Verizon landline customers cutting the cord for cost reasons to lay out a lower, but still additional monthly service cost for a new Verizon Hub?

When I was browsing Verizon's online store the other day looking for the Hub, one additional thing I noticed was that Verizon is now marketing a "Network Extender" that strengthens the company's wireless network signal indoors when you place it in an interior window. That's a femtocell by another name, right? The Network Extender seems to have taken the place of the Hub. The device price, about $250, is about the same as the Hub's initial device cost, but a major difference between the two is that the Network Extender carries no additional monthly service charge. Verizon has decided it is not a good idea to charge you extra (at least after the device cost) to expect a quality mobile signal inside your home.

Maybe the Hub was just a placeholder until the Network Extender was ready, but I'd like to think that Verizon learned something valuable in recent months about what works for its customers and what doesn't, about how much they are willing to pay for service they basically already have, and that if customers are cutting the cord on landline, maybe the company should start cutting its own cords. Maybe it's the Year of the Femtocell after all.

-Dan [6]