Gigabit Cities

Gigabites: Verizon Wins FCC Approval for XO

TGIF! After a brief hiatus, Gigabites returns with news that the FCC has approved Verizon's takeover of XO Communications, RCN has launched gigabit service in Philadelphia, Videotron is upgrading to DOCSIS 3.1 and much more.

  • Hugs and kisses! XO Communications Inc. is now one step closer to consummating a deal with Verizon Communications Inc. (NYSE: VZ) that has Big Red buying the fiber network operator in a transaction worth $1.8 billion. Amid post-election upheaval at the FCC this week, the Commission took the time to approve Verizon's proposed buyout of XO. The acquisition still needs regulatory approval at the state level, but the FCC was expected to be the biggest potential barrier to closure of the deal. (See Verizon Bags XO for $1.8B.)

    Among XO's assets are a 20,000 route mile intercity network crossing the US and Canada and 13,000 route miles of metro fiber connecting more than 4,000 on-net buildings and with 1,000 central office connections. For Verizon, the deal yields infrastructure that will support a combination of strategic business efforts. The fiber is critical for further expanding Verizon's business services, decreasing the cost of delivery of its video services and creating more capacity to power future 5G gigabit wireless networks.

    Previously, the FCC approved Verizon's lease of XO wireless spectrum licenses, which the telco plans to use for early fixed 5G wireless deployments in 2017. (See Verizon Cleared for Take-Off on Fixed 5G.)

    In signing off on the full XO deal, the FCC stated: "We conclude that both the benefits and the harms of the Transaction are relatively limited, but that, on balance, the potential public interest benefits outweigh the potential public interest harms."

  • Beating local leader Comcast Corp. (Nasdaq: CMCSA, CMCSK) to the punch, RCN Corp. this week reportedly launched its gigabit broadband service in Philadelphia. The move to the city of Comcast's HQ follows gigabit launches by RCN in New York City, Chicago and Washington, D.C. RCN is using DOCSIS 3.1 to power its gigabit services. Pricing for the first year of service runs $70 per month. (See also Gigabites: Comcast Doubles Down on D3.1.)

  • Also on the DOCSIS 3.1 front, Videotron Ltd. in Canada has begun rolling out its own D3.1 upgrades. The Canadian cable company already had a gigabit offering based on DOCSIS 3.0 technology, but Videotron CEO Manon Brouillette noted that "with this deployment, we are laying the first stones in the foundations of the Internet of the future." (See Videotron Launches Next-Gen DOCSIS.)

  • For more gigabit coverage and insights, check out our dedicated Gigabit/Broadband content channel here on Light Reading.

  • While cable companies ramp up their DOCSIS 3.1 efforts, telcos are also pushing hard on delivering new gigabit services via fiber-to-the-home networks. AT&T Inc. (NYSE: T) launched new gig deployments in: Baton Rouge, Louisiana; Birmingham, Alabama; Charleston, South Carolina; and Reno, Nevada this week. Meanwhile, Hawaiian Telcom Communications Inc. expanded its gigabit footprint to the Puʻuanahulu area and now passes more than 125,000 homes and 5,600 business with gigabit service.

  • And finally, as new gigabit services make their way across the US, ISPs are still experimenting with the best pricing strategies to draw customers but also recoup network investments. Lumos Networks this week announced it's offering a new promotional price of $70 per month for its gigabit service in select areas of Virginia. Comcast, however, is going in the opposite direction. While it started out selling gigabit service at a promo price of $70 per month, Ars Technica reports that the cable company has now dropped the discount in some markets, doubling the entry price for gigabit service to $140 per month.

    — Mari Silbey, Senior Editor, Cable/Video, Light Reading

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