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Are phone land lines fading?
Sunday, September 27, 2009

It's funny to read that Ivan Seidenberg has finally stopped worrying about when the number of telephone land lines (aka POTS, or plain old telephone service) would stop decreasing. But that's what Saul Hansell wrote on his New York Times blog. He was referring to remarks that Mr. Seidenberg made at a recent Goldman-Sachs investors conference.

Mr. Seidenberg's remarks are important, as he is the CEO of Verizon Communications, one of the nation's largest telephone and Internet firms, and majority owner of one of the largest cellular services. So he has a lot to lose and a lot to gain by the manner in which consumers and businesses purchase their communications lines.

He has been at the cutting edge of the communications business several times. As CEO of Nynex, the "baby Bell" that covered New York and most of New England, he worked with Ray Smith, of Bell Atlantic, to create a bigger Bell Atlantic, which controlled the world's most lucrative communications corridor -- across the Hudson River between Manhattan and New Jersey.

Then he orchestrated a merger with GTE to create Verizon and pushed for creation of huge cell phone carrier Verizon Wireless, owned by Verizon and Vodaphone. When Mr. Seidenberg works on an idea, it usually leads to huge results.

In January, it became apparent that the executive suite at Verizon had crossed some imaginary threshold when Verizon Wireless introduced the Hub phone, a home phone that has many of the characteristics of a cell phone, including the ability to send and receive SMS text messages, unlike anything any land line can do. More importantly, it was being offered to Verizon's standard user base, allowing them to use their Internet connections to make their home phone lines redundant.

With a Hub from Verizon Wireless attached to any Internet connection, the user would not need a land line. Since the Hub and its related service could be connected to a competing Internet connection, it was almost as if Verizon's executives, by allowing Verizon Wireless to introduce the Hub, were voting for letting the land line business die so the wireless business could thrive.

Now, with Seidenberg's remarks, we hear in the subtext that it's really a transformation. Your local phone company is becoming a video company with an Internet service provider attached. The traditional phone part will simply fade away. They'll accomplish that by changing out their copper wires for Verizon's fiber optic FIOS service. Some communities have been living with FIOS for several years and don't realize the service is not yet ubiquitous. It just seems that way.

Be looking to hear more about bundles with video, Internet and cell phone, instead of video, Internet and traditional phone lines. Be looking for more office buildings to be wired, allowing small companies to get rid of those old ISDN Internet lines. Last week, they finally started wiring FIOS into my office's building and my community has had FIOS since early 1997.

Mr. Hansell noted Mr. Seidenberg had finally relieved himself of the burden of the loss of land lines. I'd say he prepared for this for a long time.

Reach David Radin: www.megabyteminute.com. More articles by this author
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First published on September 27, 2009 at 12:00 am