Comcast/Verizon Combo Steers Clear of FiOS

Verizon Wireless and Comcast Corp. (Nasdaq: CMCSA, CMCSK) have extended their wireless/cable service bundles to six more markets as they look to poach customers with incentives laced with broadband upgrades and bigger Long Term Evolution (LTE) data plans.

But the pair continues to steer away from FiOS markets in the early going. Three of the new cable/wireless bundle markets (Atlanta, Chicago and Kansas City, Mo.) are in AT&T Inc. (NYSE: T) territory, while the other three (Colorado, Minneapolis/St. Paul, Minn.; and Salt Lake City, Utah) are in areas where Comcast grapples with CenturyLink Inc. (NYSE: CTL).

Comcast and Verizon are again using prepaid Visa cards (valued between $50 and $300) to attract new customers. But they're looking to sweeten the pot by adding a "double your data package" component that lets customers upgrade to Comcast's Blast! cable modem tier (up to 30Mbit/s downstream) free for 12 months and to double Verizon Wireless's LTE data plan, which, for example, would let a customer on the $30/2GB plan expand the monthly data cap to 4GB. (See Verizon Doubles Up on LTE.)

With the new launches, Comcast and Verizon Wireless now offer cable/wireless bundles in nine markets, following earlier debuts in Portland, Ore.; San Francisco; and Seattle. Time Warner Cable Inc. (NYSE: TWC), another Verizon Wireless partner, has launched similar bundles in five markets (Raleigh, N.C.; Kansas City, Kan.; and Columbus, Cincinnati and Toledo, Ohio) that are all in AT&T U-verse markets. Bright House Networks and Cox Communications Inc. , the other two Verizon Wireless MSO partners, have yet to introduce their bundles.

Why this matters
The launches are coming into view as the feds review Verizon Wireless's proposed purchase of cable's Advanced Wireless Services (AWS) spectrum. Verizon Wireless has also proposed to auction off some of its 700MHz spectrum if the AWS/cable deal gets approved.

Despite avoiding FiOS markets early on, Verizon Wireless and its cable partners also insist that they will compete vigorously for video and broadband subscribers. Comcast competes with FiOS in areas such as Philadelphia, Pittsburgh, Washington and Boston.

For more

— Jeff Baumgartner, Site Editor, Light Reading Cable

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paolo.franzoi 12/5/2012 | 5:34:30 PM
re: Comcast/Verizon Combo Steers Clear of FiOS


There plan under Ivan was to do the urban and suburban areas with FiOS to stem line loss and keep the residential business as a cash cow. &nbsp;They were planning to sell off their rural properties and have been doing this over time. &nbsp;All of that was known back in 2003 when the BPON RFP came out.

So, really I don't see any changes at all. &nbsp;I can tell you that the PON OLTs are not working very hard to handle the offered traffic. &nbsp;I have yet to see the point of upping the rates again. &nbsp;The reason to go from BPON to GPON was to try to get a price reduction. &nbsp;Nobody would think that is going to happen if they stepped to 10G PON of any flavor.

So, I think FiOS has done what it was supposed to do which is stabalize the wireliness Access Business. &nbsp;They will use this as a cash cow to provide investment support for business services and further wireless offerings. &nbsp;This has been the plan for about 10 years and it has not been a secret. &nbsp;

Will they offer new things with FiOS? &nbsp;Probably. &nbsp;We were doing conversion of long tail content to IP based SDV when I exited Tellabs (well the OLT development to support anyway). &nbsp;But this will all be incremental. &nbsp;I expect no new big buildout and no new big RFP. (Same by the way from AT&amp;T only replace FiOS with U-verse and they want to keep their rural properties with legacy DSL).



^Eagle^ 12/5/2012 | 5:34:30 PM
re: Comcast/Verizon Combo Steers Clear of FiOS

So, bottom line is there is no lack of capacity in the current FIOS architecture and no customer drive for an upgraded faster version. &nbsp;Customers have enough bandwidth on FIOS and are not really clamoring for more.

And the VZ plan to use it to reduce costs, lower churn, and create a cash cow in the urban / suburban metro areas where they can more easily support FIOS with fewer resources is working.

&nbsp;Use said cash cow to generate free cash flow to invest in other areas. &nbsp;Also working.

Ride that cash flow for a long time, but cap out any real new significant investment in big upgrades for an equally long time. &nbsp;Do small incremental things to improve various parts as you mentioned but essentially spend no more money on it. &nbsp;Just take profits.

I sure would not want to be a PON equipment sales person in the USA these days!

As you said, the OLTs are not struggling to carry the traffic currently being generated. &nbsp;so there is no real demand driver for upgrades. &nbsp;

Despite the crys from many on message boards like one this for a massive new investment in access, it is clear there is not really a bandwidth crunch in wireline access where the investments have been made in FIOS, UVerse, or Comcast's high speed. &nbsp;Until there really is some need, I agree, we will not see much investment in this area going forward for ATT and VZ.

There is still a need for faster and better access in many places, and there is still the question of afforability for many. &nbsp;But no real demand drivers for any new investment in already built out areas for FIOS and U-Verse and Comcast high speed.

(note: I do not like the rural users being stuck with relatively slow, if they can get it, DSL. &nbsp;And in many areas, DSL is still not really available.... so for rural users, they are not being well served in many ways. &nbsp;None of these big plays are addressing rural or small community access. &nbsp;likewise for LTE buildout's).

Sigh, I live in one of the areas Comcast is NOT upgrading. &nbsp;Get good fast data pipe, but horrible, really horrible tv quality. &nbsp;they have no plans to upgrade the head ends in my region for a long time, if ever. &nbsp;So OTT is OK here, but not the standard nor HD TV from Comcast. &nbsp;No Fios, no Uverse. &nbsp;Barely working ATT dsl. &nbsp;&nbsp;&nbsp;


paolo.franzoi 12/5/2012 | 5:34:29 PM
re: Comcast/Verizon Combo Steers Clear of FiOS


Just to modify your response a bit sailboat, you sort of touched on something that I have seen since the optical crash in the early 00s that companies have really not reacted to well in their R&amp;D planning.

"I sure would not want to be a PON equipment sales person in the USA these days!"

Given that I worked for AFC/Tellabs, I can tell you from my sources that selling AFC (really Vinci) ONTs to Verizon is not a horrible thing. &nbsp;What this means is that you MUST win the inital RFPs because there will not be more for that technology. &nbsp;In the old days there were replacement RFPs for existing products. &nbsp;That just has not happened in the access space for over 15 years (I think the last big replacement RFP came from Bell Atlantic and because of the GTE deal went nowhere). &nbsp;Now they are all about NEW architectures to replace/supplement/change existing ones. &nbsp;

People still invest as if there will be replacement RFPs. &nbsp;If I go back to Tellabs, that is what I told them about WiChorus. &nbsp;My conclusion was that they would be too late to win EPC RFPs using that platform. &nbsp;Nobody wanted to hear it. &nbsp;

What I am surprised by and amazed by given the breadth of the staff here at LR is that the change in the way products are selected and planned has not really hit them as a point of note. &nbsp;And this has led many companies to over-invest in product lines that have already lost. &nbsp;

The thing I read here is that people believe that new applications will spring forth if access bandwidth magically appears. &nbsp;This is done in the same breath where carriers are capping the bandwidth use for the bandwidth that ALREADY exists because the Access Network is FLOODING the network with traffic. &nbsp;People read the news and choose their storyline because they personally can not get 100Mb/s or fiber or whatever. &nbsp;But heck even here in the dinky North Bay, I have a 20 Mb/s connection on Comcast at my house. &nbsp;Do I really need more? &nbsp;No - I would love to have more upstream but even that is more of a convenience than a barrier.

I have said for over 5 years the bandwidth problem generally is NOT an access issue. &nbsp;Are there places where it is? &nbsp;Sure are. &nbsp;But for most folks (in the US at least), you have the choice of at least 1 high speed option and more likely 2. &nbsp;Some have 3 or more. &nbsp;Would I like the price to decline? &nbsp;Yes, but seriously now we are quibbling. &nbsp;



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