More powerful Verizon Wireless could doom FiOS

Jim Barthold, FierceIPTV

The difference between a pessimist and a realist is that a pessimist looks at every situation and sees the worst; a realist looks at every situation and knows that the worst will happen, and then predicts a timeline for when it will occur.

Thus, to my realistic eyes, when Verizon (NYSE: VZ) acquired Vodafone's stake in Verizon Wireless, it marked the beginning of the end for FiOS as a competitive wireline tool.

Verizon and AT&T (NYSE: T) are tunnel-focused on wireless and have been for some time. Even as AT&T rolls out its much-vaunted Project VIP, nearly every press release discusses the benefits the investment brings to wireless subscribers and pushes wireline U-verse subs to the back of the broadband bus.

As someone who must sift through quarterly earnings to find the nuggets about carriers' wireline business and specifically wireline IPTV--which frankly takes about a tenth of all the presentation and even less of analyst questions--I can't see anything positive happening wireline-wise, and especially FiOS-wise, when Verizon becomes a more complete wireless company.

That's a shame. Despite the ongoing love affair with all things wireless, wireline has much to recommend it when it comes to video delivery, as anyone who has struggled with a home Wi-Fi network can attest. That's why cable continues dominate the video entertainment space and why so many rejoiced at the thought that Verizon would bring FiOS to their neighborhoods to compete with cable operators.

Those neighborhood cheers turned to sighs when Verizon said it wasn't going to pursue any more FiOS rollouts. They turned to raspberries when Verizon said it would collaborate with cable operators in non-FiOS markets with Verizon Wireless marketing cable and cable operators marketing Verizon Wireless.

There is the possibility that a more powerful, more dedicated Verizon Wireless could mean new life for FiOS. There have long been whispers that Verizon would build neighborhood hubs to feed video entertainment to hungry customers via high-speed 4G LTE connections. As quickly as those whispers gained volume--and I even heard them in Verizon Wireless stores--they were stifled. Perhaps a newly-focused Verizon Wireless will push these plans forward as part of the new wireless utopia.

Realistically, of course, wireline entertainment is going the way of vinyl records; in the end, like digital media, wireless--whether 4G or Wi-Fi--is just too convenient. Despite continued surveys that say video aggregators (read: pay TV providers) can still hold sway in the new video entertainment space, the reality is that more consumers will get their content via IP than via paid TV service plans, and a lot of IP is now going over broadband wireless networks.

This does not mean cords are unimportant. Most consumers still have at least one cord stuck to the residence just to get high-speed data. For the most part, that cord is provided by a cable company because cable operators wisely pushed faster and faster speeds via DOCSIS while telecom players dithered with old copper infrastructure and DSL.

Perhaps a more powerful Verizon Wireless will offer up a 4G wireless "cord" that delivers a competitive high-speed data service. More likely, though, if FiOS goes away, so does any relevant broadband competition.

So yeah, realistically speaking, a consolidated Verizon Wireless is a reason to worry about the future of FiOS. -Jim