Given that I'm a Fairpoint customer, and
wrote previously about Fairpoint's bankruptcy, I continue to watch with a bit of fascination the ongoing effort by Frontier to purchase Verizon's landline business in a range of other states. Recently,
three more states approved Frontier's acquisition of Verizon's business. And Frontier continues to make assurances that it will somehow
not wind up in the same situation as Fairpoint...
I still find the whole process bizarre. I do understand the fundamental motivation... here in the USA, there are only three wires going into (almost) every home:
- electrical power line
- phone line
- cable television line
If you want to get your service into a home in the USA over a wire, you have to ride over one of those three wires. That's it.
So I can see the logic someone out there is thinking... he/she who controls a wire has a platform to launch services.
There are, though, two major problems I see:
1. WIRELESS, a.k.a. WE DON'T NEED NO STINKING WIRES - While there may be only three wires going into the home, there are a lot of wireless signals going into the home. While it may not have the performance of wired connections, I know a good number of folks who now have wireless Internet. And while much of this has traditionally been satellite-based, I'm seeing some folks going for the wireless WAN cards (or "air cards") offered by the cellular networks - and some of the newer laptops with this technology built right in. Plus you have to wonder about newer technologies like WiMAX should they ever start to really take off.
2. LANDLINES ARE LOSING - As I mentioned in my last post, US residents are leaving landlines behind. The NHIS survey I referenced showed the number of homes without landlines at over 20% - and increasing rapidly. My own perception based on comments from people around me is that the cable companies are eating the telcos' lunches when it comes to signing up new people. I need to pull some stats to back up that view - but anecdotally I'm finding more people signing up for cable Internet (often as part of a "triple play") and I haven't heard of anyone in recent times signing up for DSL from their phone company.
To me, I just can't see the landline business as a great place to be these days... but obviously some folks out there think they can somehow magically make it work. I wish them luck.
What do you think? Would you invest in the landline business in 2009?
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