Despite claims that consumer internet access competition is about to be snuffed out, competition actually is poised to grow in a big way: far more extensively than independent internet service providers might hope to provide in the way of competition.
In large part, that is because Verizon seems poised to become a major out-of-region fixed network ISP, competing directly with Comcast, AT&T, CenturyLink and Charter Communications.
As consumer fixed network communications is a scale business, new market entry by scale providers matters quite a lot. No matter how successful small ISP providers might be, they do not have the scale to tip market share figures on a national scale.
Will Verizon build on its XO Communications metro assets to build small cell and fixed wireless networks in major metro areas outside its core Northeast U.S. footprint? It appears certain.
When 5G-based fixed wireless is launched in the U.S. market by Verizon starting in 2018, it is likely to be heavily deployed out of region by Verizon, for the simple reason that Verizon’s fixed network is limited to the Northeast United States, while the millimeter wave spectrum assets cover population centers across the United States.
Also, compared to building in-region, in some cases, the path to gaining revenue and market share is stronger out of region. As cable TV operators were able to grow market share in voice by taking market share from the incumbents, so Verizon will be able to grow revenue by taking market share from incumbents out of region.
After selling assets in California, Texas and Florida to Frontier Communications, Verizon is a firm with fixed network assets in the Northeast and Mid-Atlantic U.S. only. If one assumes a small cell network eventually will be build out in population centers nationwide, that means Verizon has to create new backhaul networks in most of the larger markets of the United States.
When that happens, the backhaul infrastructure is likely to build on the metro assets obtained when Verizon purchased XO Communications.
The first announced market--Sacramento, Calif.--is an AT&T fixed network region, for example, and is a market served by the former XO Communications.
If you look at the areas where Verizon has millimeter wave spectrum ready to use (purple shaded areas on map below), you can see that Verizon has many opportunities both inside and outside its fixed network footprint.
By definition (there are only two other significant former Bell system fixed network operators remaining), it would compete against either AT&T or CenturyLink out of region.
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