Net Neutrality Friday

This week Frontier Communications has taken over providing the service on the lines that they purchased from Verizon recently. This is a very different proposition than the last bunch of lines they bought. Verizon is rid of the former GTE properties that were not contiguous to core Verizon territories now. But this batch contained some very urban and very high end areas.

When I was with AFC, we used to keep an eye on how the deployment of FiOS was going. From those early days in Keller until the last set of BPON ONTs shipped many years later, we knew a lot about FiOS deployment. I used to tell people about how fast it was going and my friends at Calix never believed me. At the time, we were doing about as many ONT installations a day as they were doing in a year. But those heady days are long gone. We were stunned with the take rates in Keller. We expected 30% or so, but it was about double that. Orange County was even higher. The take rates in some of the properties that Frontier has for FiOS were well above 75% in some very dense areas. It was amazing.

And that is the thing. The last purchase of FiOS properties by Frontier was quite small. There were some spots in Oregon and Indianapolis, but that was about that. Frontier backed away from many of the services that could be offered nor did they expand the fiber plant. But these new lines are going be a big deal. They do not eclipse the size of the rest of the company, but they are a significant percentage of the total new company. On top of that, they come with a new vendor. We will get to that at the end.

So, what does this mean for consumers? The truth is nobody knows. Frontier has every reason to be a good provider for these customers. But Frontier does not have the buying power with the content providers that Verizon does. It is not clear how pricing will be on FiOS TV over time. In fact, it is unclear how pricing will change over time on all the FiOS services as they are offered by Frontier.

What would we want to happen? Well, my view is pretty simple. This could become a seed of a way for Frontier to move many more customers to fiber over time. They will have a large footprint in which to figure out how to deploy and manage fiber networks. They will have a set of engineering guidelines for the largest such installation in the US.

The other thing they will have is a large amount of what used to be Alcatel-Lucent (now Nokia) gear. Frontier is a company that has been split between deploying Adtran and Calix gear. With one fell swoop, Nokia has the lion’s share of the Fiber gear installed and is now the incumbent for GPON. There is no way that this installed base is being replaced. The only question is will Nokia displace either Adtran or Calix as a major vendor inside of Frontier. I think this is an interesting question as Calix (in particular) would be troubled if they no longer sold to Frontier.
Jim Sackman
Focal Point Business Coaching
Business Coaching, Executive Training, Sales Training, Marketing

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