Three claps and a huzzah for Verizon (NYSE: VZ): The telco is trying to take advantage of Time Warner Cable's (NYSE: TWC) ongoing feud with CBS (NYSE: CBS) to poach customers for its FiOS service. The problem, of course, is that this competitive push is limited to areas where the two compete, basically pinpoints on a national map.
Still, it's a breath of fresh air in the all-too-collaborative pay TV service provider space. Generally, when a multichannel video programming distributor (MVPD) player gets into a snit with a content provider, fellow MVPDs stand on the sidelines and watch, hoping that this sort of thing is not in their immediate future. Some, such as DirecTV (Nasdaq: DTV) in this most recent battle, even take sides with the embattled party. Rarely, if ever, does a competing MVPD actually recruit subscribers away from a wounded colleague.
Verizon's gone a different route. It's flat-out working to bring TWC subs into its FiOS fold via enticements that include special discounts for CBS employees caught without access to their own network's programming. From a consumer standpoint, this deserves a huzzah because, real or perceived, it smacks of competition.
The problem is, it's limited competition, and limited competition has been around for as long as there have been wires in the air and in the ground and satellites in the skies.
Over the years overbuilders have applied pressure--and caused prices to plummet--as they brought in their own brand of competition. Back in the mid-1990s, Verizon predecessor Bell Atlantic actually set up a fiber-fed digital service in an Adelphia franchise area in Toms River, N.J., forcing the cable operator to lower prices and improve service. Today, similar competition is being spearheaded by Google Fiber (Nasdaq: GOOG), which is pushing incumbent providers to deliver faster, cheaper broadband speeds.
That kind of competition makes good press, but little else. Toms River didn't suddenly experience exponential residential growth just because Bell Atlantic challenged Adelphia, and no one seems to be pulling up stakes and moving to Provo, Kansas City (except for Andy Reid) or Austin to get Google Fiber. For most consumers, competition is something happens somewhere else: read about it in the newspapers, or, more likely, on the Internet.
The FiOS grab sounds really good except for the necessary small print: it's only in FiOS areas and, as the people in Baltimore can attest, FiOS isn't everywhere.
So, there are some congratulations in order for Verizon. It's broken ranks with other service providers and is actually trying to enroll subscribers from a wounded colleague. But it would be so much more interesting--and so much more valuable--if the battlefield was actually expanded to the whole country and everyone, not just those in selected markets, got the same opportunity.--Jim