That bi-monthly visit from your local utility’s meter reader may eventually be a thing of the past.

Verizon Communications is moving rapidly to establish itself as an “end to end smart grid solutions provider,” providing utility smart meters for gas, electric, and water service that communicate over Verizon Wireless’ cellular network.

“We’re in the midst of a pilot right now, and what we’re piloting is more than the meter data management — we have a meter-to-cash system that includes an advanced metering infrastructure partner as well,” said Ernie Lewis, industry partner with Verizon’s global energy and utility practice.

Verizon hopes to capitalize on forthcoming smart meter adoption, replacing current mechanical meters for natural gas, electricity and water with new electronic meters that have two-way wireless communications capability with the parent utility. Smart meters can offer customers time of day savings for running high consumption appliances during off-peak hours, automatically deliver meter readings to the utility without having to dispatch an army of meter readers to customers’ homes, and support pay-per-use billing that turns the power off when your prepaid account is depleted.

Verizon will manage the potential data demands of such services through cloud networks, potentially through its acquired subsidiary Terremark. Verizon already operates its own energy and utilities enterprise solutions business.

Before -and- After

Hopes for increased Canadian wireless competition were dashed last week when Industry Canada released an official list of approved spectrum auction bidders mostly filled with familiar names.

Fifteen Canadian participants including market-dominant Bell, Rogers and Telus each put down a refundable 5% deposit for the Jan. 14 auction. Most of the rest of the bidders are regional providers or suspected spectrum speculators hoping to sell any acquired spectrum at a profit.

It was good news for the three largest cell companies which feared the possibility of a well-funded new entrant like Verizon Wireless. Instead of facing the deep pockets of Verizon, the three cell companies will be competing against regional providers like Quebec’s Vidéotron, Bragg Communications’ EastLink which serves Atlantic Canada, and provincial telephone companies MTS in Manitoba and SaskTel in Saskatchewan.

Two private equity firms are also participating: a subsidiary of Birch Hill Equity Partners and Catalyst Capital which holds the debt for independent Wind Mobile. Wind Mobile’s owner Globalive Communications is also registered as a participant. Both could use the airwaves in the Wind Mobile business or sell them to another provider.

“Ultimately, what would have been great is to have a well-capitalized startup, a feisty competitor coming in,” telecom analyst Troy Crandall told the Canadian Press news agency. “That would have been the best thing for consumers.”

But Canada’s best hope for lower cell phone bills was never to be found from Verizon Wireless.

“I can assure our investors that we never have and never will be leading on price,” Lowell McAdam told investors at a conference last week.

Verizon’s moratorium on further expansion of its fiber to the home service will continue for “the next couple of years.”

Verizon FiOS won’t be coming soon to a home near you, unless that home is inside a community with a standing agreement with the phone company.

Verizon CEO Lowell McAdam made it clear to attendees at Tuesday’s Goldman Sachs 22^nd Annual Communacopia Conference his priority continues to be investing in the company’s highly profitable wireless business, while the company’s wired infrastructure is being targeted for more cost cutting, especially in areas designated to see existing copper infrastructure decommissioned. As for expanding FiOS into new communities, McAdam said he instead preferred to concentrate on improving market share and profits for the next few years in areas already getting the fiber optic service.

McAdam noted John Stratton, president of Verizon Enterprise Solutions, has been hard at work pruning Verizon’s wireline products and services targeted to business and government customers.

“I think [he] killed about 2,000 products this year, and we have taken 350 systems offline last year,” McAdam noted. “I think we are already at 250 this year. That sort of discipline gives you the ability to streamline your infrastructure.”

For residential customers, Verizon has two sets of offerings: one for customers served by FiOS fiber optics, the other for customers unlikely to see fiber upgrades indefinitely.

Inside Existing FiOS Service Areas

“We are doing some major technology shifts within FiOS to make it more efficient,” McAdam said. “We’re going to concentrate there for the next couple of years.”

McAdam’s signals to Wall Street were loud and clear: no more FiOS expansion into new communities for now.

McAdam

Instead, Verizon will focus on improving existing service in several key areas:

• Verizon has almost two million optical terminals that McAdam says were active at one point and are now sitting idle, suggesting FiOS has won and lost nearly two million customers since launching, either because the customer switched providers or moved away. McAdam said he wants to improve Verizon FiOS’ product set enough to attract those customers back. He noted with the terminals and cables already in place, the capital costs to win back a former customer are near zero;
• Verizon is introducing a new terminal this fall. Verizon’s FiOS Media Server “eliminates the requirement for coax, once you get into the optical terminal in the basement or wherever in the house,” McAdam said. “That slashes the installation time, and therefore makes the product a lot more profitable for us going forward. It eliminates set-top boxes, it is all IP-based going forward.”
• Verizon will continue to expand Verizon FiOS, particularly in New York City where it has a commitment to offer service.

Verizon FiOS has managed to build a much larger market share than its nearest neighbor, AT&T U-verse. McAdam claimed Verizon FiOS has achieved a 39 percent market share in broadband and around 34 percent on its television service so far. McAdam’s goal is to boost that to 45 percent. In areas of Texas where Verizon first introduced its FiOS fiber optic service, the company already has a penetration rate above 50 percent for broadband and 50 percent for television, demonstrating room to grow market share. AT&T’s U-verse TV penetration rate is 20.1 percent.

For Those Unserved by FiOS

Verizon’s 4G LTE Broadband Router with Voice

Except for Fire Island, N.Y., there are no significant announcements of FiOS expansion. Instead, Verizon has focused on investing to improve its wireless 4G LTE cell networks with the hope existing landline customers will consider switching to higher-profit wireless service. An attempted trial of Verizon Voice Link, intended to be an entry-level wireless replacement of landline service, failed badly on Fire Island due to an avalanche of complaints about poor quality reception, dropped and incomplete calls, and lack of support for data.

Now Verizon is back with a new offering, its 4G LTE Broadband Router with Voice ($49.99 2-yr contract with $175 early termination fee/$199.99 month-to-month).

“Securely connect wired and wireless devices to the 4G LTE network, and connect your landline phone to make calls,” Verizon’s website says. “Combine voice and data on a Share Everything Plan for added savings.”

The device can function as both a wireless landline replacement and router for data. The unit includes three Ethernet ports and Wi-Fi to share your connection. A landline phone or cordless phone base station can be plugged in as well.

Verizon charges an extra $20 a month for Home Service Monthly Line Access on Share Everything Plans, which covers your telephone service. Customers get unlimited local, long distance, call forwarding, call waiting, three-way calling, and voice mail. 911 is available, but Verizon disclaims any responsibility if you cannot reach an operator. The device also supports TTY-TTD calling.

Verizon claims users can expect 5-12Mbps downloading and 2-5Mbps uploading on Verizon’s 4G network, assuming there is solid coverage where you use the device. Usage caps apply. A backup battery keeps the service running for up to four hours of voice calling in the event of a power outage.

McAdam admitted the thing that keeps him up most at night are regulatory issues. He particularly called out Europe, which he believes is hostile for investment. But Europeans pay considerably less for wireless service than North Americans pay, and often have more choices due to competition and regulatory oversight.

“I think the beauty of the ’96 Telecom Act was that it was such a light touch on broadband and mobile,” said McAdam. “And that is — and I sit in Europe talking to investors all the time — that is the biggest difference between the U.S. and Europe.”

To head the FCC off from pursuing any additional regulatory oversight, McAdam claims he reluctantly approved Verizon’s lawsuit against the government on Net Neutrality.

“We have had to take some positions, frankly, that we didn’t want to take,” McAdam said of the lawsuit. “It opened the door for them to get into price regulation of broadband. And I think that is not their charter, and I think it would be a mistake for the U.S. economy and certainly the telecommunications ecosystem.”

[flv width=”488″ height=”300″]http://www.phillipdampier.com/video/Verizon 4G LTE Broadband Router with Voice 9-25-13.flv[/flv]

Verizon Wireless’ latest 4G LTE router supports wireless landline service and 4G data.  (1 minute)

Verizon Communications notified the New York Public Service Commission late Tuesday it was abandoning a request to replace damaged landlines anywhere in the state where the company’s facilities were substantially destroyed with a wireless service called Voice Link.

Verizon’s original tariff, if approved, would have allowed the company to drop landline service in areas of New York where it decided it was impractical to repair or replace heavily damaged wired infrastructure. Customers in these areas would no longer be able to obtain wired landline service or DSL broadband. Instead, under the original tariff request, Verizon would offer customers Voice Link as its sole service offering, providing voice-only service over existing telephones, assuming a good signal was available from a nearby Verizon Wireless cell tower.

Yesterday, Stop the Cap! reported a well-placed source in Albany indicated Verizon was unlikely to win approval of its tariff request after a summer of real-world experiences with Voice Link service on Fire Island. Customers overwhelmingly rejected the service, complaining about dropped and missed calls, poor voice quality, and the lack of an affordable broadband option. Yesterday, Verizon separately announced it was reversing an earlier decision and would now install its fiber network FiOS on Fire Island, offering customers the option of keeping Voice Link or switching to FiOS for telephone and/or broadband service.

Accordingly, Verizon today requested the PSC abandon proceedings regarding its request, calling the issue “moot,” and for now will no longer pursue an effort to drop landline service in New York. Verizon will continue to offer Voice Link in the state as an optional service, but will also provide traditional landline and DSL service (where available).

Verizon has not said whether it will continue to pursue regulators for permission to supply Voice Link as its sole service offering in part of New Jersey and Pennsylvania where the company’s landline networks were damaged by last year’s Hurricane Sandy.

Verizon FiOS is coming to Fire Island.

Verizon Communications has thrown in the beach towel attempting to convince residents of popular tourist destination Fire Island to accept its wireless landline replacement Voice Link as the company’s sole landline service option.

After telling customers for months it did not make financial sense to restore copper service or bring its fiber optic network FiOS to Fire Island, Verizon senior vice president of national operations support Tom Maguire today reversed course.

“In today’s competitive marketplace it’s all about making sure you can take care of customers because if you don’t they can go someplace else,” Maguire told Newsday. “Interestingly on Fire Island, there is no place else, so we listened to our customers. It was pretty apparent that we wanted to do something beyond Voice Link and the wireless network, so we think that fiber is the best course.”

Verizon customers on Fire Island have told Stop the Cap! all summer they felt abandoned by Verizon, stuck using a wireless landline replacement service they claimed worked poorly or not at all at times. Customers also loudly complained that Verizon was effectively forcing broadband customers who depended on Verizon DSL to the much more expensive Verizon Wireless broadband service with a very small usage cap. Many attended meetings sponsored by elected officials or the Public Service Commission to decry Voice Link and demand Verizon offer the same quality service its landline network used to provide.

Maguire told the newspaper the company will now deploy its fiber network FiOS on Fire Island, offering residents new options for telephone and broadband service. The 600 customers on Fire Island with Voice Link will be able to keep the wireless service or switch to FiOS fiber.

Reached for comment, Verizon tells Stop the Cap! its fiber service will not include FiOS TV because Verizon does not have franchise agreements with the many municipalities on Fire Island, and their primary concern is getting the fiber network engineered and constructed.

Schumer

Fire Island residents have made it clear to Verizon their biggest concern is Internet access, not television, and Verizon FiOS will be able to deliver faster Internet speeds unavailable from DSL.

Verizon expects to begin construction in October, although it has already started preliminary design work for the new fiber network. Verizon expects to have the fiber build complete by the beginning of the 2014 summer season on the island.

Sen. Charles Schumer (D-N.Y.), who has been carefully monitoring the Voice Link issue, released a statement welcoming Verizon’s decision.

“By installing fiber-optic cables on the island, Verizon will not only make the system as good as it was before, it will be making it better,” said Schumer. “Fire Island residents will now have greater access to high-speed Internet – a necessity in the modern age – and reliable voice service. Verizon deserves credit for listening to our concerns and changing course.”

In a June guest article written for publication on Stop the Cap!, Maguire wrote it would cost Verizon from $4.8 million to more than $6 million to restore landline service. Maguire argued it made no economic sense to commit to a multimillion dollar investment with no guarantee that residents of the island will sign up for Verizon service.

“That’s probably why Verizon is the sole provider on the island,” Maguire noted in the piece. “None of the companies we compete with in other parts of New York offer services on the island.”

Today’s decision represents a complete reversal of the company’s earlier views, but one that is welcomed nonetheless by residents on Fire Island reached by Stop the Cap! this afternoon.

“We’re very glad this is now over and behind us,” said Verizon customer Shari who has toughed out the summer with cellphone-only service.

“I can’t wait to return Voice Link, which has been a real pain,” said Thom.

Both customers tell Stop the Cap! they intend to sign up for Verizon FiOS the moment it becomes available.