Verizon vs. AT&T: No siblings, no rivalry

Are Verizon Communications and AT&T rivals? Much was made of Verizon's move to build-out its FiOS network in a portion of AT&T's Dallas area market earlier this year. That decision made some sense for the telco because it already had network properties in the area stemming from its long-ago acquisition of GTE, the independent firm that was once the largest non-Bell company telco in the country. It's also the first case in which Verizon is testing FiOS in an area where it doesn't offer complete voice coverage, but no doubt Verizon has other former GTE properties around the U.S. that overlap or fringe on AT&T markets, so perhaps we'll see more situations in which FiOS goes head-to-head with AT&T's U-verse.

Clifford Holliday, an analyst with Information Gatekeepers, will be issuing a new report soon called "Overbuild: The New RBOC Advanced Access Architecture Strategy?," in which he examines this trend. There's something exciting about the possibility of the two biggest telcos over-building to compete with one another, in the same sense that watching Oklahoma and Florida compete for the national championship of college football should be pretty exciting next month. The Sooners and the Gators are not necessarily rivals, but they are the two biggest heavyweight powers in college football, and if there is anything America loves to see, it's the clash of best against best to determine who is really best. If it's anything like the Texas-USC game a few years back, it will live up to its billing.

I'm not so sure Verizon vs. AT&T will be worth the ticket, however. One reason is because Verizon so far is demurring from the idea that any heavyweight battle is brewing. Another reason is because any competition that does develop probably will be pretty slow to develop in any broad, meaningful sense. If Verizon enters an AT&T market (or AT&T enters a Verizon market, for that matter), it may not come off to the consumer as a clash of rivals. Verizon will just be the new guy, probably (though it hasn't said this) offering a discount to new customers to establish some kind of market foothold. It might also be hard to determine who really has the best offering in an economy that might drive customers to keep switching for lower-priced offers. Finally, AT&T and Verizon are not really the siblings we might think them to be-they once were cut from the same corporate cloth, but 25 years or so later, these companies have been changed and re-made so often that the only place you can call them siblings is in the history books.

Rivalries are fun to think about, but competition between service providers may not be much more than just that. If you are the new service provider in a market, your competition is Incumbent, Inc., and if you are the incumbent, your competition is everyone else.

-Dan

For more:
- Telephony has this report

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