More bad news for customers outside of cities: Verizon will lose 1.6m phone lines, 234,000 data customers, and 600,000 long-distance customers in Maine, Vermont, and New Hampshire, and own 60 percent in the new venture formed with FairPoint. FairPoint operates just 308,000 phone lines today, and is generally the incumbent local exchange carrier in these mostly tiny exchanges of less than 2,500 phone lines. By spinning these lines off, Verizon gets to take some of the cost of operating rural exchanges off its books, and the new entity may benefit from universal service fund fees, which provide significant revenue to rural exchanges.
Sprint Nextel spun off its access lines into a company called Embarq last year, as did smaller telco Alltel, which sold its lines to Valor Communications, which operates the new entity as Windstream. FairPoint, Embarq, Windstream, and a fourth firm, CenturyTel (a previous buyer of rural Verizon lines) represent a large, consolidated hunk of rural callers.
These markets may be ripe for more wireless, as wireline services have enormously lagged in these areas compared with the rest of the US. (Remember that the FCC counts broadband as 200 Kbps in either direction, and it counts a Zip code as having broadband service if there's a single provisioned line and a single customer for that line.
Sprint Nextel and Clearwire have licenses that likely cover a large rural area, and the question will be whether they can find it cost effective and efficacious to deploy for those underserved residents.