Broadband Gains Don't Necessarily Mean Landline Losses

By Jim Barthold

A dark economy is reinforcing a push to better use existing resources within the telecommunications industry this year as it works to stem landline voice losses and increase its broadband customer base. 

Executives' comments from AT&T and Verizon during annual earnings reports last week made it obvious that carriers no longer see themselves as phone companies; they're broadband providers who coincidentally offer voice service via either traditional POTS or VoIP. Executives from both carriers boasted of their strong wireless business; both crowed about increased "broadband" subscriber numbers, in Verizon's case with its FiOS fiber-to-the-premise network, and in AT&T's, U-Verse and a mix of 3G/4G broadband wireless. And both muttered about continuing "landline" losses that confusingly intermixed with voice subscriber losses. 

Neither, however, publicly called out a resource that could at least bolster broadband numbers and help preserve existing landlines; re-purposing idle copper already in the field as subscribers increasingly abandon second and third lines and even start to move away from traditional POTS. Emerging technologies that bond copper can add value to these lines as a way to deliver high-speed DSL that competes with cable broadband. 

"When (carriers) were building new homes in the ‘90s, and BellSouth I know for a fact did this, they automatically put three pairs to every house," said Teresa Mastrangelo, principal analyst for broadbandtrends.com, who did concede "there is not an excess amount of copper for everyone to be able to have bonded pairs." 

That's part of the conundrum for the operators, said Mike Martin, director of product management for ADTRAN's carrier networks division: "It's not a ubiquitous solution or answer, and it's still a problem that carriers are somewhat struggling with. How do you go out and sell it without knowing that you can deliver it?" 

Since carriers are hemorrhaging voice customers, bonding might be a way to shore up the business while building the ultimate fiber solution to cable. 

"The carriers are looking at bonding as a way to help offset the talk on DOCSIS 3.0," Martin said. "Some of the MSOs are offering 50 meg service already, and you'll never get there on a single DSL pair unless you have a very, very short loop and you have VDSL2 on it." 

Bonding is a Band-Aid; it's not a tourniquet. 

"You can get to ADSL2+ and realistically get between 40 and 45 megs of throughput on a decent-sized loop," he said. "Our customers are talking to us about it and we offer it." 

Again, while attractive, doesn't apply everywhere. 

"Different marketplaces and even different neighborhoods provide different opportunities. We're utilizing all the resources available to us and bonding copper is certainly one of those," said Dan Alcazar, consumer marketing office of EMBARQ, which differs from AT&T and Verizon primarily because it's a wireline carrier without a wireless arm.

When subs disconnect voice services, EMBARQ howls in enough pain that it's actually quietly testing naked DSL-an almost verboten subject among carriers. 

"The industry makes its money on voice. DSL is the future revenue and margin but today the industry is run on voice, and it will remain the vast majority of our money," Alcazar said. "We're at this moment of transition where we're shifting from a wireline voice-dominated industry to one that is bifurcating along the lines of either high-speed or wireless. All three of those products need to be thought about simultaneously but we are clearly shifting from one to the other."

Continued...

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