Cable Deal Signed, Verizon Pulls Out of FiOS Build Out

A week ago, Verizon announced “a deal to pay $3.6 billion for advanced wireless spectrum from Comcast, Time Warner Cable and Bright House Networks, which it will use for LTE mobile broadband services.”

As a consequence of this deal, Verizon announced that it would not continue to build out its high-speed FiOs networks. Verizon CEO Lowell McAdam told an audience at the UBS Media conference that the company was aiming to bring fiber optic connections to its target of 18 million homes, and then abandon the technology. “We are going to build out what we said and not any more,” he said.

The reason is this: instead of paying for costly construction work, Verizon now plans to bundle its service with those of its cable partners. McAdam tried to gloss over the change by telling the audience:

“The theory is, though, that all boats will rise, so FiOS will not be disadvantaged in any way. If I put my Verizon hat on, we think that the FiOS platform is the strongest platform and each partner can take the core product and do some innovation on top of that if they choose to…”

A few years ago, Verizon's fiber build offered the promise of truly high-speed Internet and video competition. Now Verizon is abandoning that vision. Consumers looking forward to advanced FiOS and video competition will now have to make do with either cable or satellite service.

In any case, this latest move means that Verizon will depend less on its unionized workforce and rely more on the services of the low-wage, low-benefit cable companies and their contract labor. In all, not a good move for America.

Cable Operators To Sell Verizon Advanced Wireless Spectrum For $3.6 Billion (paidContent.org, Dec. 2, 2011)

Verizon Communications Inc. at UBS Media and Communications Conference (Dec. 7, 2011)