Windstream buys business phone company for $2.3 billion

Windstream, a Little Rock, Ark.-based phone and broadband company says it is buying PAETEC Holding Company of Fairport, N.Y. for $2.3 billion. On closing this deal, Windstream will have a bigger national footprint with a bigger fiber network to service the luractive business customers.

Hard Questions for the Broadband Stimulus Program

The government is spending $7.2 billion to bring broadband to underserved and unserved Americans as part of the stimulus bill. However, the first grant allocations raise several questions about missing data, missing money and whether or not the government can spend the money before its deadline.

WindStream Buying Time With Acquisitions

Windstream Corp., a rural telecom operator, has agreed to acquire a fourth company in an effort to beat rivals, buy growth and avoid being telecom roadkill. Spending is only half the battle as consumers opt for wireless services.

Verizon Sells Rural Access Lines to Frontier for $8.6B

[qi:086] What a deal! Verizon Communications (s VZ) today unveiled plans to dump roughly 14 percent of its expensive copper lines in exchange for $8.6 billion from Frontier Communications (s FTR). The transaction, which is expected to close within the next year, will make Frontier the nation’s fifth-largest incumbent local exchange carrier with more than 7 million access lines, 8.6 million voice and broadband connections and 16,000 employees in 27 states.

The big winner here is Verizon, which has been trying to sell off its rural access lines for years. It sold 1.5 million of them to Fairpoint in 2007, which is now struggling under the burden. In 2004, Verizon sold its access lines in Hawaii to The Carlyle Group. The resulting Carlyle-created business, Hawaiian Telecom, filed for bankruptcy last year.  Buying copper land lines is proving to be a sucker’s game. Read More about Verizon Sells Rural Access Lines to Frontier for $8.6B

A Dying Landline Business Sounds a Lot Like Static

[qi:086] If you want to hear what the death of copper phone lines sounds like, don’t just listen to AT&T (s T) CEO Randall Stephenson or Verizon Communications (s VZ) CEO Ivan Seidenberg talk about their landline losses over the last few quarters, come over to my house and lift the receiver on my landline phone. You’ll hear the crackle of static that grossly interferes with your ability to enjoy a call.

Ustream Working on Mobile App?

Ustream is reportedly going up against Qik, Kyte and Flixwagon with the creation of a mobile vid-casting application, writes Mobile Crunch. We contacted Ustream for confirmation but only got back an email saying, “We don’t have a comment on mobile at this time.”

The big differentiator for the Ustream service will supposedly be drastically shorter lag times between recording and posting video. The video embedded above demonstrates the difference in lag between Ustream and Qik (though we don’t know how that video was created). Mobile Crunch also reports that the Ustream app will have mobile chat and if your handset has dual cameras, you’ll be able to switch between the two.

Though Ustream is being tight-lipped right now about the products (bastards!), we’ll keep pestering them to get more info. Recently mobile vid-caster Kyte started de-emphasizing its consumer service to focus on publishers.

Embarq Cuts Jobs. More Trouble Ahead For Telcos

Embarq, the wireline division spun off by Sprint, today announced that it would cut between 500 and 700 jobs and eliminate 300 contractors. The company lost about 170,000 landlines in the most recent quarter. According to an AP report, in June Embarq handed over some service centers to Nokia Siemens Networks and off-loaded 256 Embarq workers to NSN. It has plans to cut some call centers — another 210 jobs. Embarq currently has about 17,000 employees.

This is the latest pointer to the continuing troubles of U.S. telecom carriers, as I outlined in an earlier essay. Embarq’s problems are not unique. Several smaller players are facing tough times. In addition to general economic malaise, many are simply replacing their landlines with cellphones as their primary voice connections.

The telecos have also been hit hard by a slowdown in sales of broadband connections. Embarq added a mere 24,000 new connections in Q2 2008. Broadband connections have been a lucrative business for wireline providers, who have seen access lines evaporate by the month.

Such trends are leading to talk that we are going to see mergers among rural phone companies like Windstream and Frontier. Reuters recently quoted analysts saying that Windstream would be the main consolidator and Embarq is too big for them to buy — at least for now.

Newsflash: Congress Discovers that Web Firms Track Data

For any of us who recognize that personal privacy on the web is an illusion, the response to a Congressional inquiry asking how various ISPs and online portals target advertising and collect data will come as no surprise. Aside from the use of deep-packet inspection technology used by ISPs to insert advertising based on surfing habits, Congress discovered cookies and data retention policies. In a shocked tone, the Washington Post reported that Google is using DoubleClick’s tracking cookies to monitor where people go on the web in order to serve ads.

Is this really all that surprising? Wasn’t that one of the reasons Google paid $3.1 billion for DoubleClick? AOL also confessed to using tracking cookies and said relatively few (tens of thousands out of more than 100 million) users opted out of its targeted advertising program. Yahoo said it also uses behavioral ads but noted in its letter that it plans to announce the ability for consumers to opt out of such “customized ads.” It will still track users, though. Read More about Newsflash: Congress Discovers that Web Firms Track Data