Commlaw Source

FOLLOWING THE TELECOMMUNICATIONS INDUSTRY AND RELATED LEGAL TOPICS

Friday, August 18, 2006

Mixed Messages From Verizon on Future of Local?

There was lots of print this week about the health (or lack of) and future (or lack of) of the wireline telephone business.

The week started off with the story that Verizon is again looking to dump tens of thousands of access lines in Maine, Vermont and possibly New York (though a previous plan to throw off those lines didn't go over so well with the NYPSC). This was ironic news, in light of the fact that Verizon's Doreen Toben told analysts on the 2Q 2006 earnings call just a few weeks ago that "We remain confident that wireline margins will expand and show sequential improvement as we go through the year." I guess she meant as a result of the liquidation? The same old VZ double talk? You decide. At the same time Business Week Online had a story about the rough time the guys at the Carlyle Group (headed by former FCC Chairman Bill Kennard) are having with their own 2004 acquisition of Verizon's Hawaiian local business.

No matter what VZ says, it's clear that while the local business is tough these days, its far from dead. We think that the predictions of 100% VoIP replacement within 5 or even ten years are a bit optimistic and rumors of the death of local are exaggerated a bit.

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