Tag Archives: CenturyLink

More than a coincidence? HB60 would kill access to UTOPIA as CenturyLink preps business gigabit

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We’d like to think that incumbents are a well-oiled lobbying machine, but they often do things so ham-fisted and amateurish that you’re left wondering if Gomer Pyle is in charge. This week is proving no different. After getting a legislator who took their money to propose cutting off UTOPIA at the kneecaps, CenturyLink announced that they would be offering gigabit service to office parks along the Wasatch Front. You know, the same ones that HB60 really wants to keep UTOPIA from providing service to.

So let’s recap our timeline here:

  • CenturyLink sends campaign cash to a legislator.
  • Said legislator runs a bill to kick UTOPIA out of business parks that paid to have the service built to them.
  • CenturyLink comes in behind that and sells their own service, most likely at a much higher cost. This includes state agencies such as UDOT, UEN, and UTA.

Could it be any more obvious as to what’s going on around here? CenturyLink has convinced a legislator, Rep Curt Webb, to run a bill to kick their competition out so that they can take those customers. I’m furious about that arrangement. You should be too. It’s time to yell about this one from the rooftops.

Is CenturyLink About to Ditch Copper?

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CenturyLinkIt’s no small secret that Verizon has been working really, really hard to ditch copper access lines. In areas where they haven’t rolled out FIOS, they’re letting older copper plants rot on the vine, ceding the wired space in those communities to the local cable companies. In areas of New York where Hurricane Sandy wiped out the copper plant, they’re flat-out refusing to rebuild any landlines, instead offering a high-margin fixed wireless service.

AT&T hasn’t been too much better. Their anemic speeds on FTTN constantly lag behind their cable counterparts. Like Verizon, most of their money comes from wireless operations, so that’s where their efforts have been focused. In fact, when was the last time you heard anything about U-Verse in the news?

It seems to me that CenturyLink is ready to follow suit. They recently announced that they would be building fiber to 19-20K cell towers in their service areas. I can’t say I blame them. This is a highly profitable business, one that I wish UTOPIA or its providers could crack. Given the slow and steady loss of both landlines and broadband customers (the latter due to a lack of network upgrades), I’m sure they’re looking at whatever boosts the bottom line.

You’ll note, however, that upgrading DSL users to ADSL2+, their FTTN solution, is a footnote. Their CFO and SVP more-or-less states it outright:

“We try to design the routes to bring fiber to the towers to where they can serve other needs that we have to in terms of providing fiber closer to business customers and closer to residential customers to provide some of the higher bandwidth services,” Ewing said.

That’s right: CenturyLink is stating rather plainly that their main concern is to get fiber to those cell towers, then, if it’s “feasible” (read: dirt cheap), you can have the leftover table scraps. Cable companies (and most other phone companies) have posted subscriber gains in broadband, yet CenturyLink, who hasn’t upgraded speeds past 40Mbps since 2009, is losing thousands of customers per quarter. Odds are good that any areas getting this fiber will just now be moving off of vanilla DSL to the same 40Mbps speed (or lower) that they’ve been pushing for the last four years. When Comcast is pushing 105Mbps and UTOPIA and Google Fiber are doing gigabit, how is it anything but a giant middle finger to current and potential customers?

CenturyLink is choosing to let copper customers loose for the same reasons that Verizon and AT&T are: it’s expensive to provide service, and they can make the same or more money from wireless (albeit on different ends) with lower costs and a lot less competition. The copper network has paid for itself many times over, so writing it off as it continues to degrade is no big deal. The money they invest in cell towers has a much better ROI than investing in wireline services, so what limited funds they have will be going there.

This isn’t just a problem for CenturyLink customers. As they slowly back away from consumers and shift their core business to wholesale transport for other businesses, most users in Utah will be left with just the cable company, Comcast, to fill the void. With only a single wireline provider in most of the state, speeds will stagnate, prices will rise, and service will worsen. When there’s no incentive to compete, why would you?

Is CenturyLink doing fiber-to-the-home or fiber-to-the-press release?

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Before I could publish this, Chris Mitchell at MuniNetworks.org did a much more in-depth version of what I wrote here. I highly recommend reading his article for the nitty gritty details. Unsurprisingly, we both reached the same conclusion.

When Google announced they would be building a gigabit network in Austin, AT&T wasted no time trying to jump on that bandwagon for damage control. Of course, nobody believed it. How could a company who has shown no interest in network investment suddenly decide that they might want to get on that? I find myself in the same position with CenturyLink’s announcement of an FTTH testbed in Omaha. Moreso, they’re not even equipped to do it.

Bear in mind that this is going to be a very small deployment, just 48,000 homes. It’s focused on an area where CenturyLink provides TV service, a product they haven’t even put into trial in most markets after shutting it down and starting it back up again. This makes some sense as most fiber networks need multiple product offerings to make the network achieve the desired revenue goals. That also means that areas without TV trials are probably not likely to see the service anytime soon.

Then there’s the matter of money. CenturyLink is a cash-poor, debt-heavy behemoth that’s been shedding voice customers to cell carriers and broadband customers to anything that isn’t them. When was the last time they did a new ADSL2+ footprint anywhere in Utah? It’s been several years now with not a red cent of network improvement. Omaha is a testbed not because they don’t sorely need to upgrade their entire network, but because that’s likely all the money they can afford to spend. Without a highly profitable wireless business or a lead against their cable competitors, it doesn’t look like the picture is going to improve anytime soon either. Investors don’t seem to think so.

I’m sure CenturyLink will build out their “testbed” in Omaha. Heck, they’ll probably even expand it to the surrounding suburbs. But will they pick up enough steam to push it nationwide? I wouldn’t put money on it.

Does Windstream’s Acquisition of PAETEC Spell ILEC Wars?

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A week and a half ago, ILEC Windstream Communications announced that it would be acquiring business telecommunications company PAETEC, a current UTOPIA provider. As of yet, nothing has been said as to if that arrangement on the network will continue. As you may recall, AT&T had planned to join UTOPIA as the flagship provider until SBC purchased the company in 2005. That got called off because incumbent providers, both in the telco and cableco space, have a long-standing gentleman’s agreement to stay out of each other’s territories. While Verizon and AT&T fired a few shots in some Texas suburbs a few years ago, this arrangement has continued to stand for decades. The question now is if Windstream is willing to risk competition in its own backyard to keep access to UTOPIA.

I think the answer might be yes. Business telephone companies regularly both compete with and buy wholesale services from incumbent providers. Veracity, for instance, does this all the time. This would be a rare occurrence that a company is both, and I find it highly unlikely that CenturyLink would set up shop in Windstream’s backyard (mostly because they don’t have the money, but I digress). Even with what I assume are relatively few accounts on UTOPIA, Windstream may be ready to make the calculated decision to open up an ILEC-on-ILEC war right here in Utah. It may even expand to the residential market now that the merged company is no longer focused on business accounts.

The implications are huge. If Windstream pulls it off, Verizon and AT&T, both of whom are cash-rich, may decide to start picking off bits of CenturyLink’s business. Before long, incumbent territory won’t matter anymore. UTOPIA’s open access model would be ideally positioned to capitalize on the willingness to cross the anti-competitive artificial boundaries and provide quick market access.

The Coming of a New Duopoly

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For a very long time, detractors of UTOPIA have pointed to the wireless market as a shining example of how the private sector provides superior competitive choice and great consumer benefit. Now we’re watching as that example starts to look a whole lot like the wireline business, locked up in relatively few choices with little product differentiation between them. Once AT&T completes its purchase of T-Mobile (and nobody seriously expects the deal to fall through), two companies will control over 65% of wireless lines in the United States, both of which are nasty players in the wireline duopoly business. This is just the beginning.

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After much searching, Qwest finds the right shade of lipstick for the pig

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In quite the surprise announcement today, Qwest announced that its efforts to dress the company up for sale over the last decade have finally paid off. CenturyLink, the result of a merger between ILECs CenturyTel and Embarq, is buying the company in an all-stock transaction. This comes not even a year after the merger that created CenturyLink, one in which CenturyTel purchased Embarq.

What remains to be seen is if this will improve Qwest’s long-ailing fortunes and legendary reputation for horrible customer service. I used to be a customer of Sprint Local in Las Vegas before it was spun off into Embarq and was always impressed with the service quality. The only reason I discontinued service was because Vonage was offering a very compelling feature set at a  more attractive price. I don’t know how much of Embarq has rubbed off on CenturyTel (or even what CenturyTel’s reputation is), but any amount of it would help.

That said, I wonder if the new company will have the billions of dollars required to update badly-neglected infrastructure. It’s no secret that Qwest carries a very heavy debt load and hasn’t exactly been speedy with the rollout of ADSL2+ services. They also have no wireless or video revenues to cross-subsidize construction… and neither does CenturyLink. As land lines continue to death spiral and cable turns up the DOCSIS 3.0 heat, I’m left wondering how the new company will fare too much better than the old one.

Good luck, guys. You need as much of it as you can get.