Commlaw Source

FOLLOWING THE TELECOMMUNICATIONS INDUSTRY AND RELATED LEGAL TOPICS

Monday, August 14, 2006

Verizon In a "Race for Survival"

We were amused today by the New York Times story below the fold on the cover of the Business section headlined: "Verizon is Rewiring New York, Block by Block, In a Race for Survival." Our amusement was compounded by the fact that the headline appeared on the same day that two of the few remaining CLECs that were born out of the 1996 Telecom Act and who suvivied the telecom bust, US LEC and Paetec, announced that they are combining, with US LEC being acquired by Paetec.

The New York Times story shows the brilliance of Verizon's PR and legal machine, which has sought (successfully in many cases) to convince regulators that they and the other 2 remaining BOCs are on the verge of being put out of business by the cable companies and Vonage. Verizon and AT&T (the new new AT&T) are always one piece of legislation away from being able to "compete" in the marketplace. In fact, Verizon's version of "barely surviving" is having cash flow from operations for 2Q '06, according to the transcripot of the VZ analysts call, "total $11.5 billion, which is $1.6 billion better than the first-half of last year."

Pardon me while I dab a tear.

in the meantime, the few remaining competitors who remain are scrambling to sell assets at fire sale prices. The US LEC deal comes just on the heels of the closing of the TelePacific acquisition of Mpower. As we've said before, hopefully the remaining competitors and the cable companies will take a page from the BOCs war plans and fight the fight on every front.

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