Verizon Communications

Verizon's CDN push takes different path

Dan O'Shea — Thu, 20 Nov 2008 09:49:57 -0500

After AT&T and telecom network operators like Level 3 Communications began pushing into the content delivery network market, you might have wondered what was up with Verizon Communications. It now looks like Verizon's CDN push will take a somewhat different path, as the carrier has announced a CDN partnership with Velocix that is notable both for its applicability to Verizon's broadband FiOS residential service, and its optimization for peer-to-peer networking.

Verizon will use Velcix equipment to support a CDN service for media companies looking for faster service delivery, and while past CDN endeavors by traditional network operators have been focused on backbone networks, Light Reading's Contentinople reports that this service also will extend to Verizon's local FiOS plant. This strategy uses Verizon's millions of FiOS customers as bait for the media firm, and also helps ensure that the advantages of the CDN capabilities are more broadly available to end users.

Regarding P2P, Velocix reportedly has been working with the P4P working group to support network-aware file distribution, and its system is designed to cache P2P content, which Verizon claimed as a key difference among CDN companies.

For more:
- Contentinople has coverage

Verizon bringing FiOS TV to Philly

Doug Mohney — Thu, 13 Nov 2008 15:34:18 -0500

The challenger, Verizon Communications, is coming to the City of Brotherly Love, against the home-town cable giant, Comcast. Lets get ready to rumblllllllllle!

More seriously, Verizon has negotiated a 15-year cable franchise deal with the city of Philadelphia. The bill has to go through hearings and City Council approval before moving forward.

Verizon says it could offer city residents FiOS TV service within a few years of getting a video franchise and expects to offer FiOS to about one-third of Philly residents within three years of government approval. Initial service areas include parts of West, North and South Philadelphia, Germantown and the Greater Northeast.

Comcast is not fazed by the potential for competition and will likely get the benefits of the ads on Comcast SportNet channel regardless of who carries it - FiOS TV already carries the channel.

Verizon has gotten some grief since it's launched FiOS mostly in wealthier towns and neighborhoods. The franchise agreement will provide up to 15 public access channels complete with financial support, franchise fees of around 5 percent of gross revenues, and four service centers.

For more:
- Philadelphia Inquirer reports that FiOS is coming to town. Article.

FairPoint takeover status meetings planned

Dan O'Shea — Thu, 13 Nov 2008 09:33:35 -0500

The Associated Press reports that FairPoint Communications will meet with regulatory agencies the next two weeks in New England to update them on the status of FairPoint's takeover of Verizon Communications properties in Maine, New Hampshire and Vermont. The status of the cutover from Verizon's network, which originally was supposed to occur earlier this year and has been delayed until January, will be especially important.

The company will meet with the Vermont Public Service Board Friday, and will meet with Maine and New Hampshire regulators next Monday in Kittery, Maine. FairPoint's plans to file a formal 60-day notice will be submitted afterward, which suggests a late January cutover.

Approving these deals was by no means a slam dunk for any of the regulators involved, so it will be interesting to see if they have a short fuse with FairPoint on the cutover timing.

For more:
- Forbes has this Associated Press story

The next step for AT&T, Verizon

Dan O'Shea — Mon, 10 Nov 2008 10:49:53 -0500

It is no secret that the fortunes of the two largest telcos in the U.S. are now more tethered to wireless than anything
else. Of course, you could say that about a number of other telcos as well. But, in regard to AT&T and Verizon Communications in particular, this notion is made clear not only in the recent quarterly reports of the two companies, in which wireless was the ever-robust primary growth engine, but also in recent acquisitions by both firms.

Verizon recently gained regulatory approval for its acquisition of Alltel, a deal which will give it more than 80 million wireless customers. AT&T this weekend announced it is buying Centennial Communications, a smaller deal, but one that helps AT&T where Alltel helps Verizon--in smaller and rural markets. AT&T also moved to acquire Wi-Fi provider Wayport last week and some weeks ago made several management moves intended to highlight wireless as its primary corporate motivator.

As we see both of the two largest telcos fill out their wireless footprints and strengthen their wireless identities, you have to wonder how far they are willing to go to cast themselves as wireless juggernauts whose ambitions won't be burdened by ongoing landline losses. A smaller telco, Embarq, made the progressive decision earlier this year to outsource wireline voice network management to a vendor partner, Nokia Siemens Networks. How long will it take for AT&T and Verizon to do the same? Make no mistake: If one of them does it, the other will soon follow. Doing so would allow these companies to turn even more of their attention to wireless and mitigate their future investment in traditional wireline voice. It also would help them convince Wall Street that they really are not the same old telephone companies they used to be.

It was once unthinkable that a telco would do such a thing, but when an old business is dying and a new business is thriving, the unthinkable quickly becomes the next and most obvious step to take.

-Dan

FairPoint numbers down, cutover on track

Dan O'Shea — Sun, 09 Nov 2008 21:38:43 -0500

North Carolina's FairPoint Communications announced third quarter earnings that included a net loss of about $25.1 million, and revenue of $328 million, both figures down from the same quarter last year. The earnings report came just a few days after reports circulated that FairPoint was looking for a new CEO to succeed the company's current CEO and co-founder at a time when the company is looking to absorb a major acquisition of Verizon Communications properties in New England. FairPoint said on the earnings call that its cutover from the Verizon systems is still planned for January.

For more:
- Charlotte Business Journal reports

Report: FairPoint searching for new CEO

Dan O'Shea — Thu, 06 Nov 2008 08:45:42 -0500

Can you name a single telco that had more access line in the third quarter of 2008 than it had at the end of 2007? I can: FairPoint Communications, which had 1.8 million lines at the end of 3Q, versus 305,777 at the end of last year. Of course, FairPoint came by its line increase through the acquisition of former Verizon Communications lines in New England.

Now, the jump in scale has the company looking for new management to help it manage its new size and challenges. The Wall Street Journal reports that FairPoint is looking for a successor to company co-founder and CEO Gene Johnson.

The transition from a small telco that still has its co-founder in charge to a larger independent so far has been a little bumpy, as FairPoint has delayed its cutover from Verizon back office systems until January. The company also has about $2.2 billion in debt, some of it related to the acquisition.

For more:
- The Wall Street Journal has this report

Qwest joins the Climate Registry

Dan O'Shea — Wed, 05 Nov 2008 09:37:03 -0500

Verizon Communications and AT&T have started to gain a lot of notice for environmentally-friendly network policies and service practices, but neither company is among the founding members of the non-profit Climate Registry organization, a distinction which goes to fellow former Bell company Qwest Communications. Qwest, in fact, is the only telco on the agency's list of members committed to voluntary public reporting of carbon emissions. The group has 243 founding members and more than 280 registry members total.

"Carbon reduction is likely a part of our collective future," said Dave Heller, Qwest's chief compliance and ethics officer, in a statement. "For us to understand the problem and set workable goals, we need to apply the kind of common measures that the Climate Registry provides."

Information for the agency's first report is due June 30, 2009, though it will not be publicly available until December 2009. The list of telecom companies in the registry is pretty short, with suppliers CommScope and Mitel Networks as the only other names we recognized.

For more:
- The Rocky Mountain News has coverage

Time to be budget-wise, consumer-friendly

Dan O'Shea — Mon, 03 Nov 2008 10:56:19 -0500

The third quarter of 2008 so far has not been as scary as many of us might have anticipated, but while telcos and their competitors continue to add broadband and TV subscribers and paint cautiously optimistic outlooks, macro-economic indicators are pointing toward lower consumer spending in the fourth quarter.

Telecom service providers do not traditionally respond to such trends, but is that behavior changing? Verizon Communications just announced new triple play bundles with pricing it says is designed to provide more value "in a strained economy." The bundles include unlimited local and long-distance calling, broadband Internet access and DirecTV service, all starting at $79.99 per month for a year. The carrier also is offering double-play bundles for $49.99 per month and is telling consumers they can save $15 and $35 per month on bundles, compared with the prices of each individual service.

Verizon suggests in offering these bundles that it feels the anxiety of the average consumer about ongoing economic pressures, but it could be argued that the telco also is looking after its own skin. Broadband subscriber numbers at the cable TV companies came off a little stronger during 3Q than they did at the telcos, and perhaps we will start seeing Verizon and other telcos respond to that trend with new packages and rates.

The fourth quarter might prove to be a good time for service providers to actually listen closely to the economic woes of their customers. Service prices often tend to only come down when a service provider needs a market lift against the competition, but perhaps the service provider who behaves now like it truly does feel consumer pain can lock in consumer loyalty in the long run.

-Dan

Verizon profit surges 31 percent

Dan O'Shea — Mon, 27 Oct 2008 08:56:00 -0400

On a day in which its news may be overshadowed by the report of two smaller telcos merging, telco giant Verizon Communications reported third quarter earnings that included a 31 percent hike in net income to about $1.67 billion, up from $1.27 billion for the same quarter last year. Total revenue was up 4.1 percent to $24.8 billion, but the strength, as usual, came from the wireless side of the business, as wireline revenue slid 1.7 percent to $12.2 billion.

Verizon lost about 1.19 million landlines during the third quarter, and DSL subscribers declined by about 96,000. On the bright side, Verizon reported 233,000 net subscriber additions for its FiOS TV offering and 225,000 new FiOS Internet customers. Broadband and video service revenue growth drove consumer ARPU in legacy Verizon wireline markets upward by 12.8 percent to $66.67.

Additionally, the company reported that Verizon Business raked in $5.4 billion in revenue, which inched up about 1.2 percent from the same quarter last year. And, while telecom industry watchers await further information this morning on Centurytel's acquisition of Embarq, Verizon reiterated that its own rural-themed $28 billion acquisition of Alltel is on track to close by the end of this year, despite credit market turbulence.

For more:
The Street.com has this post

Cavalier Telephone and TV

Dan O'Shea — Thu, 23 Oct 2008 09:09:16 -0400

Location: Richmond, Va.

Why it's so cutting-edge: The independent telco serves residential and business customers in 17 states, and while it is not the biggest of the telco bunch, Cavalier has been quick to enter the competitive Ethernet market with cutting-edge services like Mid-band Ethernet over copper. Cavalier also offers IPTV and made a pretty cutting-edge move for a telco last year when it acquired content security firm SecureMedia. Cavalier also has been quick to voice its concerns about the FCC's access charge forbearance process and about the activities of its larger competitors, Cox Communications and Verizon Communications.

But can it keep its edge? Telecom industry watchers have been expecting more consolidation at the independent telco level for some time. Those deals have been put off during the current economic crisis, but when they resume, it will be interesting to see whether Cavalier is a buyer or gets absorbed by someone else.

NY PSC modifies Verizon grounding edict

Dan O'Shea — Thu, 16 Oct 2008 09:46:12 -0400

Revisiting an ongoing story, the New York Public Service Commission finally has accepted a modified version of a proposal from Verizon Communications for addressing electrical grounding problems found in some FiOS installations throughout the state. The PSC actually rejected the recommendation from its own staff that Verizon not be allowed to pursue new FiOS installations in New York City until all of the problems were addressed. It's good news for the service provider as it tries to move aggressively into a new market.

Still, the PC took a tougher stance on other aspects of the Verizon proposal, saying the telco must fix grounding problems within 10 days of being identified, rather than the 60 day period Verizon proposed. The agency also said that 45 percent of known grounding problems must be fixed by the end of this year, and that all known problems must be repaired by May 31, 2009.

The issue is not over yet, as some observers are likely to argue that new installations should be halted. Also, the PSC and Verizon remain at odds about whether or not some gear involved in the installations should be grounded, and to what extent.

For more:
- read this story at Multichannel News

Seidenberg optimistic about telecom, wants to fix Knicks

Dan O'Shea — Thu, 16 Oct 2008 08:50:31 -0400

Verizon Communications will not report third quarter earnings until Oct. 27, but Verizon CEO Ivan Seidenberg, speaking at the Dow Jones-Nielsen Money and Media Conference this week, took an optimistic stance on the economy--or at least the strength of telcos amid economic difficulty--rather than stressing caution.

Seidenberg didn't dispute that lower consumer spending and more disconnections may occur. But he maintained it would be a temporary condition, and that those same customers would return to their spending ways again. Is he really trying to prepare us for a soft earnings report by telling us ahead of time not to worry?

He also said the telecom industry is not having the "liquidity issues" seen in other industries, and that companies in general need to quit worrying about the economy and keep re-investing in creating a "competitive edge" for America.

Aside from these comments, Seidenberg also addressed what he said was a common question: Will Verizon "go vertical" and acquire content or other types of properties, something for which its New York competitor Cablevision Systems is famous? Seidenberg joked, "If I could buy the Knicks and fix them, I would."

It may have been the comment of a true fan, but it was also a pretty good dig at Cablevision, owner of the New York Knicks basketball franchise, which this year will look to avoid its eighth straight losing season. Seidenberg's level-headed, but often playful, commentaries make him one of the favorite speakers among telco CEOs--though the competition may not be so tough to beat.

For more:
- see this blog post at The Wall Street Journal
- check out this report at The Daily Deal

Verizon revamps wireline bills

Dan O'Shea — Wed, 15 Oct 2008 23:29:56 -0400

Verizon Communications has redesigned its bill for residential wireline services and is now sending the new bill out to customers in New York City. If that doesn't sound like huge news, the move actually comes after NYC competitor Time Warner Cable produced ads criticizing the length and complexity of the telco's bills. Customers also reportedly have complained about the bills.

The New York City market is especially critical to Verizon, since it made a pretty big effort to launch FiOS services there earlier this year. Verizon plans to roll out the new bill design to all of its residential customer by the end of this year.

For more:
- read this story at Xchange

PCCW pulls media/telecom stake off market

Dan O'Shea — Mon, 13 Oct 2008 09:03:19 -0400

Hong Kong telco PCCW issued a statement saying it is ending efforts to sell as much as a 45 percent stake in a newly-created telecommunications and media subsidiary because "the recent market downturn has significantly impacted the offers received." Several private equity bidders were thought to have been on the short lists after submitting bids for the unit, HTK Group Holdings (HTKGH).

The Wall Street Journal further reports that banks would not offer the bidders enough flexibility in the financing arrangements to increase their initial offers. PCCW's pull-back comes just days after Huawei Technologies withdrew its mobile handset unit from the auction process, citing unfavorable market conditions. The current environment also may not bode well for Nortel Network's reported desire to sell its Metro Ethernet unit.

In addition, pending carrier deals, such as Verizon Communications's acquisition of Alltel and the private equity buyout of Bell Canada Enterprises, have been shaken by the recent downturn.

For more:
- see this PCCW press release
- read this report at The Wall Street Journal

Economic smackdown awaiting telcos?

Dan O'Shea — Thu, 09 Oct 2008 08:47:25 -0400

Throughout 2008, the increasingly harsh economic climate has had telecom industry observers wondering how soon and how badly the crisis would impact telco earnings. This year's second quarter earnings reports included numbers from both AT&T and Verizon Communications that were probably better than some people had expected. But their financial reports also provided reasons for investors to proceed with caution, as both companies' stock prices have been well off their 52-week highs since then.

At least four analysts this week issued reports advising further caution or cut their price targets for both AT&T and Verizon. Craig Moffett, a Sanford C. Bernstein analyst, said that both business customers and individual consumers will continue to restrict their own spending, and that the price of borrowing money will go up. That is not good news in particular for Verizon, which is in the midst of acquiring Alltel.

AT&T will deliver its third quarter earnings report on Oct. 22, and Verizon follows on Oct. 27, so stay tuned. If these two telcos report trouble, the ripple effects will be felt across and through every layer of the telecom industry.

For more:
- see this post at The New York Times Blogs
- check this post at Barron's Tech Trader Daily

Patent ruling due in Verizon lawsuit against Cox

Dan O'Shea — Mon, 06 Oct 2008 09:08:30 -0400

Verizon Communications is awaiting a jury decision in its VoIP patent lawsuit against Cox Communications, and that ruling could come as soon as today, according to The Wall Street Journal. Verizon sued Cox over the alleged violation of six VoIP-related patents, and the action is just one of a series of similar accusations Verizon has leveled, including patent violation claims against VoIP service provider Vonage and cable TV firm Charter Communications.

The Vonage case was settled with an agreement that Vonage would pay Verizon $117.5 million. The lawsuit against Charter is pending. Verizon is seeking damages of $404 million from Cox. The WSJ reports that Verizon previously struck a deal with Comcast under which the two companies agreed not to sue one another for at least five years, if Comcast agreed to buy Verizon Wireless service for its employees. As cable TV companies continue to win over telephony subscribers, Verizon is looking to get its piece of the action one way or another.

For more:
- read this report at The Wall Street Journal

FairPoint eyes broadband expansion, WiMAX

Dan O'Shea — Wed, 01 Oct 2008 18:28:23 -0400

Independent telco FairPoint Communications, which is still in the process of taking over the former Verizon Communications network properties it acquired earlier this year, announced that it will expand broadband capabilities into 51 communities in Vermont using different technologies. The primary technology will most likely be DSL, but FairPoint also indicated it would consider WiMAX in some of its more rural markets.

AT&T also has talked about using WiMAX in rural market deployment opportunities, and with interest from FairPoint, DigitalBridge and other Tier 2 carriers, it is possible that Sprint won't be the only service provider spreading the technology around the U.S.

For more:
- see this story in Vermont's Barre Montpelier Times-Argus (though WiMAX is not mentioned in this particular story)

NY PSC staff advises FiOS installation freeze

Dan O'Shea — Mon, 29 Sep 2008 09:13:47 -0400

The New York Public Service Commission's staff recommended that Verizon Communications halt its installations of new FiOS TV customers in New York City until it can prove that 95 percent of its boxes throughout the rest of New York state are properly grounded.

The recommendation came after the PSC's recent evaluation that Verizon's deployments were lacking--the agency said some of Verizon's inspections of grounding issues around its installations did not turn up enough information. The PSC staff also said that Verizon's suggestion for a self-imposed deadline of 60 days to fix problems is too long, and should be shortened to about 20 days.

The staff also said that in telling customers about the issue, Verizon should inform them of the possible safety hazard, rather than calling its evaluations "routine quality checks."

For more:
- check out this report at Multichannel News

NY PSC still mulling Verizon grounding issue

Dan O'Shea — Tue, 23 Sep 2008 19:06:15 -0400

The New York Public Service Commission is still mulling whether or not Verizon Communications has effectively responded to concerns about electrical grounding problems in its FiOS broadband installations throughout the state. Light Reading, which has been closely following this issue, reports that the PSC has "serious, new concerns" about whether the Network Review Plan Verizon submitted addresses the problems. The PSC added that a recent round of inspections didn't produce enough information about "the number of households or the nature of noncompliance involved." Verizon, meanwhile, said in a related filing that the problem has been overstated.

For more:
- see this story at Light Reading

TWC won't throw down DOCSIS 3.0 blanket

Dan O'Shea — Tue, 09 Sep 2008 23:31:00 -0400

DOCSIS 3.0 has been seen as the cable TV industry's answer to big-bandwidth fiber networks, with speed potential from 50 Mbps to well beyond 100 Mbps. Comcast, Charter Communications, Time Warner Cable and other cable TV operators have been testing the technology and have committed to deploy it. This week, TWC chief operating officer Landel Hobbs said at a conference in California that his company's strategy will be to deploy DOCSIS 3.0 "surgically" in markets where it is most needed, but not in markets where the company is finding support for its tiered broadband services.

With big telcos Verizon Communications and AT&T pushing fiber aggressively into new markets, you would expect to see a major cable player blanket markets with its own next-generation broadband solution as quickly as possible. It will be interesting to see what competitors and TWC's "have-not" customers make of this plan.

For more:
- see this report at Multichannel News