Shaking off the wires
A few weeks ago, Verizon, the #2 US telephone company, took a dramatic step. It finalized the sell-off of its wired telephone lines and its high speed Internet service in northern New England (Maine, Vermont, and New Hampshire). The buyer was a company called FairPoint Communications, which bought the land lines for $2.3 billion.
The deal is part of a process of Verizon shedding less profitable operations. The company also recently sold off its Hawaii landlines operation (Hawaiian Telecom) to private equity. It has also sold off its yellow pages operations. Two years ago, it sold its Latin American landline opetaions.
The deal propels FairPoint, which now has rural telephone operations in some 20 states, the 8th largest phone company in the US, no great claim since most of the competition has been swallowed by the Verizon and AT&T juggernauts. But it does signify the way in which land lines are increasingly becoming a liability for high-flying firms like Verizon and AT&T that make much more money selling cell phone service, which requires far lower cost in terms of infrastructure maintenance. It also can sell at profit cable TV and Internet services where populations live close t together.
A Bloomberg News story from earlier this year ("Verizon Sales Miss Estimates as Home-Phone Users Fall ", 1/28/08) documents the decline of land line telephone service: "Verizon lost 875,000 phone lines in the quarter [end of 2007], including 476,000 primary home-phone lines, as customers switched to cable voice plans or began using wireless service exclusively."
Alltel and Sprint have sold and spun off their landline operations over the past few years. Can AT&T be next?
9:47:49 PM 
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