Verizon (NYSE: VZ) is bolstering its on-net building holdings by purchasing XO's fiber assets, but the telco maintains that its on-net fiber footprint only overlaps with a small portion of the CLEC's existing connected building footprint.
Upon completing the deal, Verizon will gain a total of 4,487 XO Communications on-net buildings, giving the telco a much needed infusion to enhance its existing Ethernet service footprint.
According to Verizon, out of XO's buildings, only 691, or about 15 percent, are located within the telco's existing ILEC wireline footprint. Besides XO, most of these 691 buildings are served by a host of CLECs and cable providers.
Some of the providers include Level 3, Zayo, and Cogent, as well as cable companies such as Comcast and Cablevision (Lightpath), all of which provide Ethernet and optical services in these markets.
"In particular, based on information available to Applicants, 537 of these buildings -- nearly 78 percent -- are on-net buildings for at least one other CLEC or cable company," Verizon said in a FCC filing. "And this analysis does not account for several other telecom and cable providers who also likely serve some of these buildings, whose information was not readily available."
In addition to competitors' on-net fiber footprints, a number of competitive providers have plenty of near-net fiber opportunities. This means that a lot of CLEC and cable operators' fiber passes by a number of the same buildings that could be extended to serve a new business customer.
Verizon noted that out of the "remaining 154 XO Communications on-net buildings within Verizon's remaining ILEC footprint, 136 -- more than 88 percent -- are within 0.1 miles of the fiber of a CLEC or 0.1 miles of a cable operator's lit fiber building" leaving 18 buildings within its ILEC footprint.
The telco added that "nearly 85 percent of XO Communications' on-net buildings, or 3,796 buildings, are located outside Verizon's remaining ILEC footprint."
Verizon's pending acquisition of XO's fiber assets signals the overall transition that the telco is entering into.
With the completion of the sale of its wireline properties in three markets to Frontier at the end of March, Verizon will soon have a wireline market relegated to the Northeast.
"Following the close of the Verizon-Frontier transaction (expected at the end of the first quarter 2016), Verizon's remaining ILEC footprint is confined to areas within Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, the District of Columbia, and Virginia," Verizon said.
- see the FCC filing (PDF)
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