Verizon is leaving, and don’t assume it’s a good thing
Even if you’re a consumer of rural land-line phone service.
The TV ads are pushing wireless “3G” service – 3G being a term for service that supports voice, video and data. But they’re relevant to land-line customers as well, because large phone companies are increasingly focused on the installation of wired networks with a capacity to stream great quantities of data.
In heavily populated areas companies that do this make big stacks of money. On the other hand, maintaining these services in rural areas like ours is expensive, which is why Verizon wants – and soon will get – out.
Verizon is in the process of selling its rural land phone business in 14 states – including North Carolina – to a Connecticut company called Frontier Communications. And while regulators in some states are being harder on the deal than others, there is little reason to think that Verizon customers in western North Carolina won’t become Frontier customers sometime next year.
In North Carolina, we haven’t heard too much about this, maybe because our Public Utilities Commission isn’t inclined to rock corporate boats. But in some states — West Virginia, Washington, Oregon and Ohio in particular — people, newspapers and politicians are pointing out that when Verizon makes such sales – and they do it often – the outcome is usually bad for rural customers.
Land customers here will argue that little could be worse than Verizon, but apparently they’d be mistaken. The smaller companies that buy Verizon’s rural land line infrastructure are often saddled with enormous debt in the transaction, and running a phone company in sparsely-populated, often mountainous terrain is high-dollar stuff.
The October bankruptcy of FairPoint Communications is a case in point. In 2008, FairPoint paid $2.7 billion to buy Verizon phone lines in Maine, Vermont and New Hampshire, but soon collapsed under the weight of its debt.
Wrote Oregonlive.com: “That set a grim precedent and served as a warning signal to regulators”.
Read the nuts and bolts of the deal here, from the Wall Street Journal
Read more about Verizon’s mixed messages on rural broadband here, from freepress.net
Read about an Oregon regulatory challenge here, from oregonlive.com
Read about West Virginia public opposition here from the Charleston (WV) Daily Mail
Read about West Virginia State Consumer Advocate Division’s concerns about deal here from WVNH television, Beckley, WV
Tags: broadband, Business, consumer protection, North Carolina, telephone, Verizon, Wall Street Journal
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