Comcast will have a clear competitive edge in at least three key markets where Verizon Communications is selling landline operations to Frontier Communications, according to a telecommunications industry analyst.
Frontier said there will be no changes in service for Verizon customers before the deal closes - expected within the next nine to 12 months - in the 14 states covered under the $5.3 billion deal.
But as the deal goes through regulatory approvals and other steps related to the closing, "Verizon has no real incentive to continue to invest more capital in these markets," D.A. Davidson & Co. senior research analyst Donna Jaegers said.
"In that one-year window, the cable competitors have an easy sales pitch," she said. "They can say, ‘Hey look, Verizon is already neglecting you -- and for the next year they'll have even more reason to neglect you.' "
Comcast is the primary cable provider in the Indiana, Oregon and Washington markets, where Verizon has deployed the FiOS fiber-to-the-premises network.
In December 2008, Comcast launched DOCSIS 3.0 "wideband" service in Fort Wayne, Ind., Portland, Ore., and Seattle. With the next-generation cable-modem technology, Comcast offers up to 50-Mbps downstream, matching the top tier of Verizon's FiOS Internet.
"They should certainly emphasize that in comparison to Verizon," Jaegers said. "They should be jumping all over this."
Mark Apple, vice president of communications and public affairs for Comcast Indianapolis and Fort Wayne, said that "obviously we've always done competitive marketing, even prior to this announcement. It's a very competitive market, and will continue to be so regardless of who the telco competitor is."
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