Frontier Communications’ video business is experiencing an unexpected benefit from the carrier’s acquisition of Verizon and AT&T businesses in certain markets.
“The capabilities we’ve acquired over the last several years put us in a unique position to see everything we can do,” said Frontier CEO Dan McCarthy in a question-and-answer session at the Bernstein Annual Strategic Decisions Conference, a financial conference that was also webcast.
Multiple Frontier Video Platforms
Frontier acquired some FiOS lines from Verizon and some U-verse lines from AT&T, enabling it to compare the pros and cons of the two companies’ substantially different approaches to delivery video services. In addition, Frontier resells Dish satellite video and has been experimenting with a TiVo-based offering that provides a single interface for a combined broadcast television and Internet-delivered OTT video offering.
By studying its experiences with the various offerings, Frontier is well positioned to select “best-of-breed” approaches to the video business, McCarthy said. The best-of-breed solution sometimes varies from one service to another, however.
McCarthy noted, for example, that the Ericsson Mediaroom software chosen by AT&T is the best software solution for an offering like U-verse, but an offering such as FiOS is better off with a different solution.
“Keeping one [option] for copper and one for fiber is best,” McCarthy said.
CAF, SMEs and the Back Office
Other highlights from McCarthy’s question-and-answer session include:
- The annual $283 million that Frontier was offered through the FCC’s Connect America Fund is about $133 million more than the company has been collecting in frozen high-cost Universal Service support, McCarthy said. Echoing previous comments from Frontier, McCarthy said he expects Frontier to accept a large portion of the funding offered in exchange for agreeing to bring broadband to unserved areas of its territory. He also noted that in some cases the company’s previous middle-mile investment has put it in a position where the investment it must make to augment the CAF funding is a feasible amount.
- McCarthy sees big opportunities in the small and medium-size enterprise market in Frontier’s Tier 2 markets as enterprises seek to make technology transitions. He cited the example of Frontier’s Illinois markets, where the carrier may be the only company closer than Chicago that can consult with the enterprise about those transitions.
- When Frontier cuts over customers acquired from a carrier like AT&T or Verizon, it strives to cut the customers over to its own back office systems as soon as possible in order to get the customer onto Frontier’s cost structure, which according to McCarthy is lower than that of the Big Two.