Is Verizon Sending Mixed Messages about Copper?
About a month ago, reports and evidence surfaced that Verizon planned to start requiring standalone DSL (or “dry DSL,” “naked DSL”) customers to subscribe to landline telephone service tied to their broadband connection, and it looks like Verizon’s new policy is set to kick in on May 6, 2012. New customers seeking standalone DSL need not apply at Verizon, and existing standalone DSL customers might be forced to add a landline if they want to make changes to their accounts or if they move. On May 3, 2012, a large band of consumer advocates sent a letter to FCC Chairman Julius Genachowski, urging the FCC to consider the impacts of Verizon’s business decision to push customers off standalone DSL accounts. Signatories include Access Humboldt, Access Point Inc., Blue Casa Telephone, Consumers Union, Future of Music Coalition, Institute for Self-Reliance, Lightyear Network Solutions, Lingo Inc., Media Working Group, Mountain Area Information Network, National Alliance for Media Arts & Culture, National Association of State Utility Consumer Advocates, Primus Telecommunications, Public Knowledge, Vonage, Women in Media & News, and Writers Guild of America, West.
The consumer advocates note that the FCC once took on the task of examining “the competitive consequences when providers bundle their legacy service with new services, or ‘tie’ such services together such that the services are not available independent from one another to end users”…but the docket has been idle since 2005. In light of Verizon’s new policy, the consumer advocates believe it is time for the FCC to refresh the record and at least “work with Verizon to explore its planned discontinuance of standalone DSL, and, if possible, to delay the implementation of a policy that would further reduce the affordability and availability of broadband services to consumers.” They are also concerned about what Verizon’s standalone DSL ditching might mean for number portability, wholesale broadband access, and the competitive OTT voice market.
The letter explains that an estimated 385k customers, or 10% of Verizon’s DSL subscribers, might be impacted by Verizon’s new policy. What’s interesting is that Verizon is on one hand trying to force cord-cutter customers to take back a landline, while simultaneously sending other market signals indicating that Verizon wants out of the landline—and copper loop—business. The Hill’s Hillicon Valley quoted Public Knowledge spokesman Art Brodsky as saying that Verizon’s plan to force standalone DSL customers back to POTS is actually “further evidence that Verizon is bailing on the landline side of the telecommunications business.” Verizon is also reportedly trying to push DSL customers to FiOS in areas where FiOS is available…and then we also have the business of large ILECs (namely AT&T, but Verizon too) trying to strong-arm state legislators to end Carrier of Last Resort obligations.
It all amounts to quite the conundrum—Verizon wants to boost its bottom line by making people bundle broadband and landline, yet they also want to move customers away from DSL and possibly abandon landline service completely in some places. I’m personally no stranger to Verizon’s distaste for dry DSL customers. I wanted to upgrade my blazing-slow 756kbps dry DSL connection several months ago, and Verizon only allowed me to upgrade if I also opened a landline phone account—which I had previously dumped in 2006. Even with the landline, I can only get 3 Mbps DSL in downtown DC (my inability to switch to Comcast for broadband is a tale of woe for another time, perhaps).
Verizon’s recent business decisions impact consumer choice and the competitive marketplace, which the consumer advocates rightly observe. But what is the FCC’s role in the situation? Should the FCC dictate whether or not Verizon (or any broadband provider) must offer standalone broadband service? It might be interesting if the 2005 docket is refreshed, but one probably shouldn’t expect any swift action.