US Telcos Continue To Embrace Apathy As A Business Model

Broadband

from the blatant-disinterest-isn't-a-strategy dept

For more than a decade we’ve noted how the US broadband industry’s biggest problem is a lack of healthy competition. In countless markets consumers either have the choice of a terrible phone company or a cable giant. The nation’s phone companies have spent the last decade refusing to upgrade (or in some cases even repair) their aging DSL lines, because they don’t see residential broadband as worth their while. That, in turn, is giving giants like Comcast and Spectrum an ever greater monopoly in many markets, reducing the already muted incentive to compete on price or shore up comically terrible customer service.

While that may be great for cable companies, execs, and investors, it’s not so great for consumers whose only choice of broadband is aging DSL from an apathetic telco. Instead of upgrading its customers to fiber across more than 20 states, US telco CenturyLink (recently rebranded “Lumen”) announced it would be selling much of the company’s copper DSL and phone network to private equity firm Apollo. Under the $7.5 billion dollar deal CenturyLink will keep the customers it actually cares about, then throw the (mostly rural) customers it doesn’t care about at a private equity firm that isn’t likely to upgrade them either.

Apollo, primarily famous for acquiring old newspapers, lobotomizing them, then stripping them for parts, claims it will upgrade many of these users to fiber. But that doesn’t seem particularly likely given their track record, or the track record of similar deals like this, which basically involves shuffling ownership of aging DSL lines nobody wants to actually upgrade, then milking the assets until the next sale. Many of these customers have been stuck on expensive, slow DSL for the better part of fifteen years as they get shuffled from disinterested owner to disinterested owner:

“It will be interesting to see if Apollo can do better than other past forays with buying copper networks. I can?t think of one of these mega-deals where buying copper networks has gone well. I think back on the purchases by Frontier, Fairpoint, Iowa Telephone, Windstream, Citizens, and others that never panned out ? and those deals were for copper that wasn’t as ancient as is coming in this sale. Some of the rural customers in this sale have seen the name of the incumbent telco change several times ? but they haven?t seen improvements in copper for decades.”

The cycle of apathy is directly responsible for the surging interest in local community and municipal broadband networks, often run by people who actually give two flying shits about the communities they’re dealing with. Of course instead of embracing those alternatives as a productive way to shore up overall broadband access (during a plague, no less), many US policymakers have instead demonized and tried to ban them.

Filed Under: broadband, competition, dsl, rural broadband, upgrades
Companies: centurylink, lumen