Verizon Wireless harvests AT&T residential customers stuck in broadband black holes

While big telcos AT&T and Verizon don’t compete on wireline-based broadband services and stay out of each other’s service areas, that anti-competitive strategy does not apply to wireless broadband.

In Northern California, for example, Verizon has expanded its wireless broadband footprint and AT&T announced this week it would counter with a $290 million expansion of its wireless system in Northern California and Reno, Nevada. Both are based on Third Generation (3G) wireless technology and are primarily targeted to mobile wireless customers rather than fixed residential users.

But some residential customers mired in AT&T’s large broadband black holes created by its incomplete wireline infrastructure are turning to Verizon’s wireless broadband plans offering advertised speeds of 600 Kbps to 1.4 Mbps for downloads and 500 Kbps to 800 Kbps for uploads. For them, it’s an easy choice over impractical early 1990s era dial up or substandard and costly satellite service.

AT&T isn’t likely to offer a superior alternative in terms of speed and usage caps (Verizon offers a 50Mb per month plan for $40 and a 5Gb plan for $50 with overage charges for exceeding the limit). Plus Verizon Wireless requires two-year contracts, which would dissuade subscribers from switching to AT&T.

If AT&T wants to protect its residential customers who don’t have wireline-based broadband from signing up with Verizon Wireless or convince them paying an early termination fee is worthwhile, it will have to do what it should have done years ago and expedite an upgrade and expansion of its wireline infrastructure to offer what the California Public Utilities Commission deems as true broadband providing minimum speeds of 3Mbs for downloads and 1Mbs uploads.

If on the other hand AT&T merely matches with a service at or slightly less comparable to Verizon Wireless Broadband without leveraging its wireline infrastructure to more widely offer true broadband service, it will once again be a day late and dollar short and leave unearned revenues on the table.