According to Karl Bode of DSLReports, telecommunications giant Verizon is consciously killing off its DSL market share in order to kill off its unionized labor force and eventually raise prices.
Since April, when Verizon stopped selling DSL-only service thus forcing customers to purchase bundle deals that include costly and unnecessary landlines, it has had a clear mission of forcing rural users to opt for LTE while killing off copper in any market it can:
“Every place we have FiOS, we are going to kill the copper,” Verizon CEO Lowell McAdam recently told attendees of an investor conference. “We are going to just take it out of service. Areas that are more rural and more sparsely populated, we have got LTE built that will handle all of those services and so we are going to cut the copper off there.”
Why would Verizon knowingly push customers to its competitors? Since the FCC began to authorize its $3.8 billion agreement with the cable industry, Verizon has relaxed the landline front, where a majority of its union workforce resides, and pushed on with the high overhead of building its LTE network. The deal has drawn the inquisitive eyes of the Department of Justice (DOJ) which is concerned with the anti-competitive ramifications of such an agreement:
The Justice Department is skeptical about the marketing deals since they would mean collaboration between Verizon, the largest wireless company, and Comcast, the biggest cable company, according to one of the sources. The fear is that there will be less head-to-head competition which could mean higher Internet and wireless plan prices.
The hope had been that Verizon would use its FiOS service to more aggressively push into Internet and cable, and that Comcast and other companies would compete more heavily in wireless products. “They’re a problem,” said the source, who was not authorized to speak publicly, about the marketing agreements.
American union workers in the landline division are facing the prospect of seeing their union effectively busted through technological gamesmanship while the American public will be forced to pay more for less. And the plan to kill DSL is already working according to Verizon’s quarterly earnings. In the second quarter Verizon added a record 3.2 million LTE users in comparison to the 2,000 broadband customers it added.
Rural Americans are likely to be unhappy with the endgame of these decisions as they could face the possibility of being left without proper Internet access.
Rural areas could see the biggest impact from the shift, as Verizon pulls DSL and instead sells those users LTE services with at a high price point ($15 per gigabyte overages). Verizon then hopes to sell those users cap-gobbling video services via their upcoming Redbox streaming video joint venture. Expect there to be plenty of gaps where rural users suddenly lose landline and DSL connectivity but can’t get LTE. With Verizon and AT&T having killed off regulatory oversight in most states — you can expect nothing to be done about it, despite both companies having been given billions in subsidies over the years to get those users online.