Why Frontier Seeks to Corral Verizon’s Wireline Liabilities

Frontier acquires Verizon's Wirelines

Why Frontier Seeks to Corral Verizon’s Wireline Liabilities

Frontier communication recently completed a $9.9 billion transaction to acquire wireline properties in California, Texas, and Florida from Verizon Communications. The small Connecticut-based telco company has slowly expanded its reach by acquiring wireline properties from Verizon Communications and AT&T.

The new acquisition will allow it to continue broadband deployment in small and rural communities.  The transaction “will triple Frontier’s size and make it the nation’s largest communications provider focused on providing voice, broadband and video services to rural markets and smaller cities” according to ABC News. And  Telegeography, a Telecom Data Research Company, reports that the telecom company “plans to extend broadband services to 750,000 unserved households across its operational footprint by 2020”. These ambitious plans for expansion are not new for Frontier Communications. The Desert Sun chronicles that Frontier purchased Verizon’s wireline services spanning 14 states back in 2010.

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ADSL2+ and VDSL2 Extends Utility of Copper Lines

The Chief Executive of FCC has issued a “commit[ment] to deliver broadband to an additional 750,000 households” by “leveraging all currently available technologies, such as VDSL2 (bonded and un-bonded) and ADSL2+ (bonded)” technologies.

VDSL2 and ADSL2+ technologies allow companies like Frontier Communications to extend the utility of existing copper lines. These digital subscriber line technologies (DSL) eliminate the need to upgrade to newer, more costly technology such as fiber. VDSL2 technology provides faster speeds to shorter distances while ADSL2+ technology provides faster services to longer wireline distances.

Wireline Broadband Sponsored by Frontier

Frontier Communications new investment makes it a prime candidate for the Federal Communications Commission’s (FCC) Connect America Fund (CAF), an initiative meant to promote high-speed broadband in rural and small communities. Rural regions lack the dense populations typical of urban and city regions that translate into profitable investments for Telecom and ISPs providers. CAF has attempted to lure larger private companies like Verizon and AT&T to invest in these profit-scarce regions, but these companies have recently declined similar subsidy offers.VDLS2

Smaller telecom companies like Frontier Communications will make it possible to continue FCC’s goal of deploying high-speed internet in rural and small communities. Telegeography has reported that “Frontier [has already] accepted USD 283.4 million from CAF to expand its broadband networks to 1.3 million rural customers across 28 states.”  Larger companies like Verizon and AT&T would rather divest themselves of their copper-based services to bolster their wireless and newer broadband services instead. One man’s trash is another man’s treasure, or in this case, one telecom companies’ liability is another telecom companies’ competitive advantage.

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