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Wireless Carriers' Conflicting Views on Copper Retirement
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U.S. wireless carriers — CenturyLink Inc. , Windstream Holdings Inc. , Verizon Communications Inc. (VZ - Free Report) — having conflicting opinions on the time period for copper retirement set by the FCC. This comes at a time when the present FCC (Federal Communications Commission) Chairman Ajit Pai is looking to reverse the rules set in place by his predecessor Tom Wheeler.
In the Technology Transitions Order passed in 2015, the FCC stated the time frame for the shut-down of copper facilities – wherein competitive carriers and businesses were given six months and residential customers got three months. ILECs (incumbent local exchange carriers) had to inform CLEC (competitive local exchange carrier) wholesale customers that use copper facilities to deliver voice and Ethernet over Copper (EoC) services to business customers about the shutdown.
At the meeting held in Apr 2017, FCC put forward its views to reform the pole attachment process and copper retirement — the two issues expected to create regulatory barriers in the growth of wireline broadband services. The commission further stated that these reforms will accelerate deployment of next-generation networks and services by removing barriers to infrastructure investment at the federal, state and local levels.
Conflicting Opinions on Copper Retirement/Replacement Span
CenturyLink and Verizon – two of the largest U.S.-based ILECs – claim that having a longer copper retirement period will delay their migrations from copper to fiber. They have objected to the extension of the 90-day replacement time to 180 days. CenturyLink claimed that such long durations sometimes to lead to work disruption and increase expenses. The money could rather be used more productively on the deployment of new or upgraded broadband facilities.
Verizon stated that by migrating more of its customers from copper to fiber, it has been able to reduce maintenance costs. To date, Verizon has filed notices with the FCC to retire copper at approximately 3.8 million locations across eight states. This is part of a broader program that Verizon had started in 2012 targeting the so-called “chronic” copper customers.
However, Windstream seems to stand on the reverse side and is in favor of the longer duration of copper replacement. Windstream is one such company that has been pioneering in copper retirement and special access services. In Jun 2016, Windstream sought permission from the U.S. telecom regulator Federal Communications Commission (FCC) to discontinue its operator assisted legacy voice services across its ILEC (incumbent local exchange carrier) and CLEC (competitive local exchange carrier) territories. This was followed by other companies such as AT&T Inc. (T - Free Report) , Verizon Communications and Level 3 Communications Inc. that had also applied to FCC for its permission to discontinue their legacy voice services.
Telecom service providers were found moving toward the IP-based network as enterprise customers are increasingly opting for IP-enabled cloud services.
Zacks Rank and Price Performance
The three companies in debate we have broadly stated above fall under the Zacks-categorized Wireless National industry. Let’s see how the companies’ price performance has varied with their sub-industry and how they are ranked under the Zacks classification.
Over the past three months, the share price of CenturyLink has climbed 4.40% while that of Verizon and Windstream has declined by 8.81% and 33.80%, respectively. The Zacks-categorized Wireless National industry has declined by 8.03% over the said time frame.
CenturyLink is the leading regional wireline service provider of communications and data services nationwide and offers hosting, cloud and information technology services in the U.S. Windstream is the leading local exchange carrier in the U.S. and Verizon is a domestic telecom behemoth.
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Wireless Carriers' Conflicting Views on Copper Retirement
U.S. wireless carriers — CenturyLink Inc. , Windstream Holdings Inc. , Verizon Communications Inc. (VZ - Free Report) — having conflicting opinions on the time period for copper retirement set by the FCC. This comes at a time when the present FCC (Federal Communications Commission) Chairman Ajit Pai is looking to reverse the rules set in place by his predecessor Tom Wheeler.
In the Technology Transitions Order passed in 2015, the FCC stated the time frame for the shut-down of copper facilities – wherein competitive carriers and businesses were given six months and residential customers got three months. ILECs (incumbent local exchange carriers) had to inform CLEC (competitive local exchange carrier) wholesale customers that use copper facilities to deliver voice and Ethernet over Copper (EoC) services to business customers about the shutdown.
At the meeting held in Apr 2017, FCC put forward its views to reform the pole attachment process and copper retirement — the two issues expected to create regulatory barriers in the growth of wireline broadband services. The commission further stated that these reforms will accelerate deployment of next-generation networks and services by removing barriers to infrastructure investment at the federal, state and local levels.
Conflicting Opinions on Copper Retirement/Replacement Span
CenturyLink and Verizon – two of the largest U.S.-based ILECs – claim that having a longer copper retirement period will delay their migrations from copper to fiber. They have objected to the extension of the 90-day replacement time to 180 days. CenturyLink claimed that such long durations sometimes to lead to work disruption and increase expenses. The money could rather be used more productively on the deployment of new or upgraded broadband facilities.
Verizon stated that by migrating more of its customers from copper to fiber, it has been able to reduce maintenance costs. To date, Verizon has filed notices with the FCC to retire copper at approximately 3.8 million locations across eight states. This is part of a broader program that Verizon had started in 2012 targeting the so-called “chronic” copper customers.
However, Windstream seems to stand on the reverse side and is in favor of the longer duration of copper replacement. Windstream is one such company that has been pioneering in copper retirement and special access services. In Jun 2016, Windstream sought permission from the U.S. telecom regulator Federal Communications Commission (FCC) to discontinue its operator assisted legacy voice services across its ILEC (incumbent local exchange carrier) and CLEC (competitive local exchange carrier) territories. This was followed by other companies such as AT&T Inc. (T - Free Report) , Verizon Communications and Level 3 Communications Inc. that had also applied to FCC for its permission to discontinue their legacy voice services.
Telecom service providers were found moving toward the IP-based network as enterprise customers are increasingly opting for IP-enabled cloud services.
Zacks Rank and Price Performance
The three companies in debate we have broadly stated above fall under the Zacks-categorized Wireless National industry. Let’s see how the companies’ price performance has varied with their sub-industry and how they are ranked under the Zacks classification.
Over the past three months, the share price of CenturyLink has climbed 4.40% while that of Verizon and Windstream has declined by 8.81% and 33.80%, respectively. The Zacks-categorized Wireless National industry has declined by 8.03% over the said time frame.
While Verizon currently carries a Zacks Rank #4 (Sell), both Windstream and CenturyLink carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CenturyLink is the leading regional wireline service provider of communications and data services nationwide and offers hosting, cloud and information technology services in the U.S. Windstream is the leading local exchange carrier in the U.S. and Verizon is a domestic telecom behemoth.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them? Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trade>>