Verizon rather quickly transformed itself not only by investing in fiber to the home (FiOS) -- but also by selling off a lot of their unwanted DSL and landline networks in deals that usually end up much better for Verizon than the companies they deal with. Verizon's use of Reverse Morris Trusts to offload these networks has resulted in buyers taking on too much debt, then falling into bankruptcy (see: Hawaii Telcom and Fairpoint Communications). For years we've noted that Verizon's second wave in this strategy is then to return into these markets with 5-20 Mbps LTE service and win back some of these customers still on overpriced, slow DSL lines.

As we exclusively reported last December, Verizon's engaged in trials with DirecTV on a fixed LTE platform designed for rural markets. This would of course be a capped service, but keep in mind it would be competing against heavily capped, slow and expensive rural satellite broadband in many markets.

The service could also be brought to bear on ex-Verizon DSL territories, priced in a way that undercuts the DSL operators they'd be running up against in these markets, many of which (like Frontier) aren't used to competition -- and price DSL accordingly. In an interview with GigaOM, Verizon CTO Dick Lynch makes it very clear that fixed LTE for residences is a big part of Verizon's residential broadband plan:

" LTE provides a real opportunity for the first time to give a fixed customer in a home, broadband service wireless but broadband service, Lynch said. In wireless, I see a great opportunity within the LTE plans we have to begin to service the customers who don t have broadband today They will be able to have mobile LTE and also to be able to have fixed broadband."

So not only did companies like Frontier and Fairpoint acquire aging copper infrastructure in disrepair, they also got a pile of debt -- and now they get to face having some of these customers leeched by Verizon. Verizon in turn got huge tax breaks (Fairpoint netted them $600 million in tax writeoffs alone), debt reduction, and relief from regulators and unions pressuring them for failing to support DSL and landline users. Now Verizon gets to fly back into these markets and lure away unsatisfied customers with a fixed and metered LTE solution tailor made for rural and uncompetitive markets.
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Tags: Aim, copper infrastructure, debt, dick lynch, Fairpoint, hawaii telcom, home, landline networks, satellite broadband, Verizon

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