To catch up on some news this week. The Frontier takeover of Verizon properties was not glitch free. I think that is to be expected and was not as bad as the Frontier takeover of the Connecticut lines from AT&T. I am not sure if anything will come of it. It didn’t sound like their was anything that could cause fines. There will be some customer loss, but I am sure that Frontier planned for it. Will have to see a year or so from now how this has gone.
Verizon had a couple of things happen this week. First, they announced that they had decided to extend FiOS into Boston. This would be the first extension of FiOS for almost 10 years. FiOS was built out from a construction standpoint very fast and then sold over time. There were issues with Video Franchising in particular with Boston. I wonder what cities are going to do when Video Franchises are replaced by OTT video. In fact, I wonder if that will be one thing that pushes folks moving video OTT. They can offer Video anywhere that they have network, irrespective of any license.
Then, there was a strike announced involving nearly 40,000 Verizon workers out of the Wireline Division. I am not going to comment on the politics or issues involved directly, other than to say that one reason that FiOS was created was to restrict union jobs. The problem was not really the wages, but the lack of flexibility. It took 4 different union job categories to install a copper phone line. When FiOS was created this was simplified into a single job category. The savings from this kind of change is extensive and the unions disliked FiOS. At AFC, we rode with union employees on installations who told us flat out that they were doing installs at a slower pace than they could to get overtime and save jobs. If you want to understand why Verizon is not expanding its residential wireline network (and selling off large chunks of it), look no further than this issue right here. This probably won’t slow down Boston, since Verizon would probably outsource the construction in that area anyway.
There was also some talk about updating regulations on Special Access for Business to simplify things for Competitive Local Exchange Carriers (CLECs). There was originally a lot of thought that CLECs would focus on residential service, but it turns out that they have really been primarily after business customers. There was a lot of complaint that the regulation and pricing had not kept up with the market realities on the ground. This is mildly interesting to me, but in the end I think focusing on physical connectivity is going to not work for these companies. I believe the money has moved into services and applications. I think a company that focuses on physical access is not going to survive in the long term. They are depending on a competitor to make significant capital investment for their business to thrive. That seems like a really bad idea for a business as a change in regulation or business conditions might make it untenable for them to continue their business. Now the last interesting point here was that Cable was expected to be included in the regulatory changes.
Which is what I will close with. In the deep past, call it 15 years ago, Telephone Companies and Cable Companies built completely distinct network and operated services that did not compete with the other. As the primary service moves to Broadband Internet over time having the companies regulated separately makes less and less sense. I hope that gets resolved at some point.
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