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Verizon Communications is on the defensive these days, denying persistent rumors of a Digital Subscriber Line deployment slowdown caused by a summer telecommunications union strike and the merger of its DSL operations with nationwide competitive DSL carrier NorthPoint Communications Group Inc.
Verizon says it largely has caught up with the backlog stemming from the strike, which ended in late August. As for any lull caused by Verizon's integration of its DSL business with that of NorthPoint, spokesman Larry Plumb points out that deal won't even close until the second or third quarter of 2001.
Verizon is, however, working on creating a separate competitive data carrier subsidiary, part of the requirements for the merger between Bell Atlantic Corp. and GTE Corp. That spinoff has already started up service in New York, and by the end of the year it will be operating throughout Verizon territory, Plumb says.
The DLEC will eventually be folded in with NorthPoint some time after that merger. Though the NorthPoint merger deal pounded Verizon's stock prices-the former Baby Bell's share value fell from nearly $80 per share in August and have hovered between $40 and $50 through September and October-company officials say the deal is a forward step, merging NorthPoint's wholesale and Verizon's commercial businesses.
"At the end of the day NorthPoint really is focusing on the wholesale, and one of its customers will be Verizon Online, which will bring in Verizon's direct consumer business," Plumb says.
Another muttering among industry watchers is that the merger with NorthPoint was the equivalent of a high-speed data retreat. Not so, Plumb says. In fact, Verizon will extend its DSL reach outside its territory, offering service to two in five U.S. customers.
"Some people have the misimpression we are exiting the DSL business by merging with NorthPoint," he says. "But it is exactly the opposite-we are going to have a greater market presence." Verizon sees DSL as "the future-that is the bottom line," Plumb adds. "It is a growth platform."
But some analysts see things a bit differently. Jonathan Atkin, an analyst with Dain Rauscher Wessels, agrees it is way too early to see any impact from integrating Verizon and NorthPoint's DSL divisions. "What I can tell you is Verizon is not back up to its pre-strike levels in provisioning of other carriers," he says. "As a result of the strike the management has also uncovered procedures that needed improvement, and at the end of the day Verizon might become a more efficient provider. But there are some backlogs to work through."
"The management now has a clear handle on the DSL installation process," Atkin adds.
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