Verizon Sells Off Rural Lines

ffejie writes "Verizon has announced that it will be spinning off rural assets to FairPoint Communications. These include all assets in the states of Maine, New Hampshire, and Vermont. The deal will close sometime in 2007 and is worth $2.7 billion. 1.6 million phone lines, 234,000 DSL subscribers, and 600,000 long-distance customers will be moved to FairPoint in Verizon's effort to shed its low-margin lines in rural areas. The sale has been rumored since the summer at least. With Verizon aggressively rolling out high-speed FiOS (FTTP) in its service area, what will happen to the consumers stuck with a smaller telco like those moving to FairPoint?"

What happens?

With Verizon aggressively rolling out high-speed FiOS (FTTP) in its service area, what will happen to the consumers stuck with a smaller telco like those moving to FairPoint?"

They get better service?

Big telcos like Verizon tend to focus on large population areas first, because that's where the money is. Which means that the major cities get more options and better service while Bob Newhart over in Middlebury, Vermont can forget about ever getting Fiber service. In fact, I'd guess that the sale of the rural lines in these areas are being done specifically so that Verizon doesn't have to deploy FiOS [wikipedia.org] as promised.

In comparison, a small company like Fairpoint is going to have to focus on the customers they've got. Which means either making them happy, or losing the business to local Co-Ops setup to provide the missing services.

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As a counterpoint, the central office that we get phone service from is operated by D&E. Most of the ones surrounding us are operated by Verizon. We pay $45 a month for 512Kbps down, 256 kbps up DSL, while you can get 768 Kbps down DSL from Verizon for $20/month. I suspect that it'll be quite a while until we get FTTP. One advantage of larger companies like Verizon is that they have enough capital to do these big projects, which smaller phone companies, like ours, can't match.

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Well, as a Vermont resident, this wouldn't surprise me. Of course, plenty of the state is nothing but Bumfuckville where costs to deploy proper internet connections would be insane. My aunt, for example, in Braintree - absolute middle of nowhere with incredibly low population density and the only internet options being dial-up and supremely overpriced satellite. Neither cable nor DSL is an option for her, while both are a choice for me in Williston where we actually have people (and, more importantly, pe

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Vermont already has CoOps and municipal internet. Burlington Telecom [burlingtontelecom.net] provides FTTP over which they serve voice, television, and data.

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It's too bad. I live in Bolton, in the Champlain Valley Telecom area. They've been great - I've had DSL for over five years, and I'm running about 3.5mbit download speeds right now. If I call tech support, I get someone in Hinesburg. I can't say enough good things about them. Having a local telecom company that owns their own equipment is key.

So will this new deal help? Who knows...

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Hi. I'm Larry form L.D.&D. Telecom.

So close. It would have been perfect if you'd written it as, "Hi. I'm Larry from L.D.&D. Telecom, and this is my brother Daryl and my other brother Daryl." :P

Probibly be better service.

I don't know anything about FairPoint, but when I went to a small 13,000 household telco my service improved greatly. Prices went up a bit, but only a few percent and my service has been great.

What's wrong with regional telcos?

...what will happen to the consumers stuck with a smaller telco like those moving to FairPoint

Not sure, but do you know any "larger telcos" that do anything but s*** on their residential customers? My best experiences with phone and data services have been with "regional" providers; the only reason I gave up my last one was that I moved to an area where the only two choices were AT&T and Charter (lose lose).

Smart move

This means they anticipate a Democratic-leaning FCC in the coming years. By creating structural seperation for the markets where they don't want to roll out FiOS, they insulate themselves from the impact of a ruling to the effect that they have to roll out service in an equitable manner.

Oh, lovely!

Great! Now I'll have to go all the way to Fairpoint Station to pay my bill. That's way out in the boonies!

Re: FairPoint Station

Great! Now I'll have to go all the way to Fairpoint Station to pay my bill. That's way out in the boonies!

Not to mention you could be put on trial for humanity's crimes, by an omnipotent super-being.

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But hey - you'll get all the delicious apples you'd ever want!

Wimax

Wimax is perfect for rural areas and a smaller telco can much easier make deal with various suppliers for test cases. Intel would be a perfect choice since they are already spending billions on Wimax.

Why is this assumed to be bad???

If anything, this could make it that much better. Verizon ignored those area because they have a much higer density (therefore more potential customers per mile) in urban/suburban areas. Now with those people under a more local telecom, the company doesn't have to focus on anything but those local customers. And it's not like there's no competition. Satellite broadband is there, even though it's probably expensive, and who knows what kind of wireless broadband might be available. (I don't live up there so I don't know.) So, the new company should be far more aware of customer service than Verizon ever will be.

It's rather presumptuous to assume that the customers will be let out to dry just because the big, bad Verizon is leaving.

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I've had Fairpoint in the past, and I feel sorry for these people. Where I used to live, here is what they charge [fairpoint.com]. These people may not get it as bad, but Fairpoint and Value do not go together. $69 for 1.5/512. OUCH.

So what?

You know why they pay $69? BECAUSE THAT'S WHAT IT COSTS!

It is a mistake to warp economics so that all customers pay the same price even though some customers cost far more to serve than others. If the telco company has to run and service two miles of cable to provide service to you but only has to run and service 100 feet of cable to provide service to me, you should pay more than I do.

Maine's Governor comments

Maine Governor John Baldacci (D) has commented [maine.gov] on the proposed selloff. As is his wont, the comment said absolutely nothing.

Resistance to this idea

Unions are fighting this one because it will mean a further decline in wages in the industry if all those workers go non-union. That's bad for everyone if the rich keep getting richer. See http://stop-the-sale.org/ [stop-the-sale.org] for their arguments.

burlington telecom, etc

In Burlington, Vermont's largest city, they already have a municipal fiber optic network.

The City of Burlington, like many other small cities and towns around the USA, has decided to ensure that all of Burlington's citizens and business have the up-to-date telecommunication services they need by building a municipally owned 21st century fiber optic infrastructure.

http://www.burlingtontelecom.net/aboutus [burlingtontelecom.net]

Vermonters often prefer local smaller business, cooperatives, and the like, to the national chains and providers. They do an excellent job up there of doing things their own way. Having FairPoint instead of Verizon will hopefully mean a telco that will work more closely with local government to provide innovate services that reach everyone. The big telcos have fought against things like municpal networks in the past. I don't think they will be missed.

We'll continue not to get broadband

***With Verizon aggressively rolling out high-speed FiOS (FTTP) in its service area, what will happen to the consumers stuck with a smaller telco like those moving to FairPoint?" ***

Rural customers in Vermont couldn't get DSL from Bell Atlantic. And they still can't now that the bills have a Verison logo on them. Oddly, they can get DSL from some of the smaller local providers -- notably Waitsfield Telecom which is pretty much the poster child for usable rural broadband for customers in its service area in the Central part of the state.

Unless the Vermont Public Service Commission suddenly grows some balls -- something they've never shown much sign of having -- I imagine that things will get worse, not better with this sale. The governor says that broadband is one of his priorities. But IMO he's a political hack -- mostly mouth. OTOH, occasionally I'm pleasantly suprised. Maybe Jim Douglas or the next governor or the one after that will take some meaningful action.

Everyone else will pay

With Verizon aggressively rolling out high-speed FiOS (FTTP) in its service area, what will happen to the consumers stuck with a smaller telco like those moving to FairPoint?

Our crooked semi-socialist government will do same thing for internet connectivity that was done for voice connectivity. Residents of rural America with cry and whinge about how it isn't fair that they don't get the same service everyone else gets, and demand that they get at the same price. Eventually one of their Congressmen will introduce a bill requiring phone companies to pool a portion of their profits and use it to supply broadband to needy people in rural areas. The phone companies will get their Congressmen to amend the bill to instead charge everyone in the country with internet access a monthly fee and that money will be used to provide broadband to the backward hicks who want to live in the middle of nowhere and still enjoy the comforts of civilization. And everyone in America will continue the slow grind towards our eventual slavery to the wants of others.

Monopolies in other countries

This is why, sometimes monopolies are something not so bad, it depends on the country where you live. Here in Japan NTT is a virtual monopoly for landlines, but I am in a semi-rural area and I have fiber-to-home.
In Mexico Telmex is also a virtual monopoly, the prices suck and the technology as well, but you can use DSL more less in all simu-rural areas.
Same policies for all the country. In general I hate monopolies but this is one of the few good points on them.

Goodbye Service!

For those who know nothing about FairPoint Communications. Their strategy is to buy up markets that no one else wants to serve and operate them for as cheaply as possible. Quality of Service will not go up...it will go down in a huge way. I work in one of their tech support call centers. We used to be their exclusive tech support for all of their subscribers, however their service was so bad it was costing us money since we have a standard monthly billing, we ended up telling to them to take a hike. One market had about 60% of their subscribers calling in every month. Every time it rained everyone lost sync on their modem. That properties' tech support has been outsourced overseas. The worst Fairpoint property my company still handles has 976 subs. We plan for 390 of those calling in each month. Our overall average for Fairpoint companies is about 25% of their customers calling in for internet support each month.

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Satellite is crap. The VSAT people give you like 3GB/mo. That's fucking worthless, I can't even use it for business two days a week with a three gigabyte cap. Skyblue has no capacity out here and hughes wants like $110/mo for their lowest level of service now, and I've heard from numerous people who have gotten capped on their service as well. Like it or not the satellites simply cannot handle a useful amount of traffic. It would be far more effective to just put up a bunch of autonomous wifi repeater blimp

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Verizon have been making a land-speed record (for them) getting FIOS across southern NH. They've been making a bee-line straight for my house for the last 6 or 8 months (Salem, Derry, Pelham, Hudson, Nashua, from what I understand) and now that they're almost at my door, it looks like they might stop?

I really hope existing customers don't lose their existing access, and I hope the timeframe for this is such that they might not immediately cancel all upgrades.

Since they're going to be the majority sta