Re-thinking the home phone's re-invention, Part 2

The O'Shea family is inching ever closer to buying a Verizon Wireless Hub so that we can cut the cord on old AT&T. Or, should we wait for an AT&T femtocell to find our market? But, I already have Verizon Wireless service, so it would be simple to add the Hub as another line. On the other hand, maybe if we wait, AT&T might follow up with an even better femtocell-cellular combo package. (We complained about pricing last week, so maybe someone will listen.)

Such are the choices that a residential telephone consumer must ponder in 2009. Believe it or not, it is getting increasingly easier to be a telco serving the landline residential market. The largest telcos have figured out that if you put a femtocell in play, you stand a pretty good chance at winning over a fair number of wireless converts for your own wireless unit that might otherwise be looking for a different household option.

Yes, it is getting easier, unless of course, you are a telco that only offers landline service. In that case, you are, to paraphrase a commonly spouted bit of wisdom, up a creek without a paddle. Some wireline-only telcos resell wireless service from one of the national providers, but they still lose a captive network customer if that customer cuts the landline cord for the cellular option. Also, there remains the potential that the customer will buy a wireless option with which the telco has no partnership affiliation.

Leave it to one of those landline telcos then to pursue a new way to leverage the burgeoning, promising femtocell trend to find a way around the limits of such resale deals. GigaOM reported that the U.S. Patent & Trademark Office has published a patent in Embarq's name for a "universal femto cell" platform potentially capable of being used with wireless service from any carrier.

It will not be surprising if the validity of this patent, which Embarq reportedly applied for a year and a half ago, is questioned and attacked as the company attempts to put it to practical use. Some may argue that the capability to connect a broadband line to any femtocell is nothing new. But, if it works, Embarq certainly will be better off for it. The telco last year ended a wireless resale partnership with its former owner, Sprint, a partnership that in generous terms would be described as not meeting expectations. Meanwhile, months before the debut of Verizon's Hub, Embarq announced the eGo, a somewhat similarly-conceived, Internet-enabled home phone with a screen.

If Embarq can now position itself to partner with multiple wireless carriers and offer an open femtocell product with a connection to the eGo or a similar home phone system, it will be able to maintain more control over its destiny, even as landline customers continue to cut the cord. Embarq can market itself as the enabler of the new home phone, connecting the customer to whichever wireless network makes the most sense for them, whether it's a regional option or a national one. That phone will of course connect back to Embarq's broadband network for backhaul.

It is not clear that the bottom lines of landline-only telcos can be saved with such a strategy, or that multiple partnerships can pay off for them. But, offering customers multiple choices has to be better than presenting them with just one, or none, and it is abundantly clear that those telcos have to do something very soon, or they will have no control over their destinies at all.


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