Verizon Abandoning Northern New England

I believe that on more than one occasion I have mentioned that I am employed by a company that makes test equipment for the telecommunications industry. One of our biggest customers is Verizon, the amalgam of the old New England Telephone, New York Telephone, Nynex, Bell Atlantic, and finally, GTE.

Verizon has been moving forward with its plans to replace much of its copper infrastructure – meaning all of the copper wires that connect homes and businesses to the central switching offices – with optical fiber. This changeover, called FTTH or Fiber To The Home, will allow Verizon to offer new services including high speed Internet at speeds unheard of for residential customers.

Imagine my dismay when Verizon decided to pull the plug on offering their FTTH service, called FiOS, in New Hampshire. While existing FiOS customers in the state will be able to keep their service, Verizon won't be spending any more time or money expanding their network in New Hampshire. The same is true of Maine and Vermont. In fact, Verizon won't be in any of those states for much longer because they've decided to sell off their phone lines to FairPoint Communications, a telecommunications firm that specializes in providing telecommunications services to rural customers. Apparently rural states like New Hampshire, Vermont, and Maine aren't profitable enough for Verizon, so they're shedding themselves of those markets, at least when it comes to residential phone and Internet services. Verizon's wireless and business services will be retained by the company as these services are quite profitable.

Not everyone is upset by Verizon's departure from northern New England.

One Maine official said it won't be hard for FairPoint to improve upon Verizon's record.

"Verizon has done such a bad job of deploying broadband," said Wayne Jortner, senior counsel from the Maine Public Advocate's Office in Augusta. "I think FairPoint can only improve from Verizon's very slow place."

Likewise, Vermont Commissioner David O'Brien from the Vermont Department of Public Service said he welcomes a company that has a commitment to broadband services in rural areas.

"It has been clear for some time that (Verizon's) future is not in Vermont or northern New England as a whole," O'Brien said. "We've wanted someone who would come to Vermont and see it as part of their future and not part of their past."

It is not known at this point whether FairPoint will continue with FTTH network upgrades abandoned by Verizon, but FairPoint has stated that they are committed to providing broadband services to all of their customers. Unfortunately that could mean DSL rather than FTTH, a system that does not have the bandwidth capabilities of FTTH.

This sale may also open more opportunities for the cable TV MSO's (multi-system operators) to step in and provide high-speed Internet and phone service. (The Manse is served by the local MSO with a 6 megabit-per-second asymmetric Internet connection, far above what is available from DSL but well below what FTTH can offer.) It may be up to the cable operators to step in and do what Verizon decided it wasn't going to or couldn't do.

Another option that may come about with Verizon's departure is municipal FTTH systems, with construction funded by the town or towns the system will serve. This has been done in many towns and counties around the US that are underserved by the incumbent telephone or cable companies. Many would not see broadband services any time soon if they left it up to the usual players.

There are certain advantages to municipal FTTH networks, one of them being that they can bond construction over a much longer period that someone like Verizon or AT&T or Qwest. The municipality isn't looking for a quick return on investment. They aren't required to show a profit, though they must cover all of their expenses. Or they can build the network and let telecommunications firms bid to operate the system. With one of the telecommunications 'big boys' pulling out, it leaves something of a vacuum, FairPoint notwithstanding. Verizon won't be around to quash a municipality's move to provide services that its residents want but that Verizon can't or won't provide. I'm hoping that FairPoint won't be as closed minded about this as Verizon has been in past.

The transaction to change over from Verizon to FairPoint will take approximately 12 months, providing that state and federal regulators approve the sale.

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