Verizon Sold its DSL Subs, But Now it Wants Them Back

Verizon is pretty excited about covering 285 million people (or about 97 percent of the U.S. population) with 4G wireless services by 2013, in part because it makes such a dandy fixed-broadband access technology, according to Dick Lynch,¬†EVP and CTO of Verizon (s vz), in an interview. His statements may send chills down the spines of executives at Frontier (s ftr) or Fairpoint (s frp), which bought Verizon’s old copper DSL line businesses, because it’s clear Verizon plans to compete against them in the market for home broadband services.
“[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.”
With speeds ranging from 5 Mbps to 12 Mbps, Verizon’s Long Term Evolution technology can compete favorably against DSL for speed, but unless Frontier or others implement super-low broadband caps (Frontier did attempt to cap service at 5 GB, although that didn’t stick) an uncapped DSL line for $30-$40 a month might be better than paying $50 for 5 GB per month or $80 for 10 GB per month on Verizon Wireless. However, as applications demand higher speeds and Verizon improves its coverage and backhaul, LTE might look better and better for consumers who are tired of watching their Netflix (s nflx) streams buffer or their Skype calls disconnect.
Of course, if this plays out, then it makes it doubly sad that the U.S. may lose a competitive wireless carrier as AT&T (s t) attempts to buy T-Mobile, because even as choice dries up in wireline access it’s becoming more scarce in wireless. So rural customers may soon have a choice between crappy DSL, possibly cable or faster wireless from AT&T, Sprint (and because of special access rates charged for backhaul, Sprint (s s) may not be able to profitably serve rural America) or Verizon. And without wireless network neutrality rules in place, those using mobile broadband may find themselves surfing a different version of the web than those fortunate enough to get wired access. For customers, it may look like having to choose which arm you want cut off. Losing either one sucks, but depending on which hand is dominant, one might suck worse.