Frank,
IMHO they have a plan. The plan is to be able to offer as many clients as possible end-to-end bandwidth. To get the last mile you need either your own infrastructure, or that of a CLEC, or that of an ILEC. The ILEC cannot sell long distance until the FCC says there is a competitive environment in its region. CLECs are too leveraged to buy anything big, and that's why they are getting bought. Bob has bought the future rights to the last mile, and with this deal USW will have a reason to speed up the certification process which will allow them to offer long distance. Cause then USW-GLBX-FRO will be all the same owner, and the USW part won't be looking backward to slow down the neighborhood CLECs in question, but rather looking forward to selling bandwidth. Of course, this strategy will also help the CLECs in the short term, since their complaints with the ILEC will have to go away (or else the FCC won't certify USW) but who cares - they will have to deal with some long distance carrier anyway for all but local traffic. Said long distance carrier might also be GBLX, to the extent that antitrust will allow. So Bob is pushing the envelope, just looking a bit out into the future. If he were to wait, wait until USW passed the FCC checklist, he would have a much more expensive acquisition on his hands, cost-per-line speaking. This market is used to quick hits and 100%'s every 3 months. With this deal the combined company gets a chance at end-to-end service for a significant number of customers in a rich and growing part of the US (US West is not rural America, as someone has said), gets customer support systems and experience for the support of end users (the phone company isn't all crap ... many years ago I did some consulting work exactly for USW on customer support systems and not that they are any better than the others but the systems are in place, are highly complex, and GBLX can use that expertise.) The market may put Bob under a bit of pressure to keep the deal going but I think he'll pull it off. Long enough post. Bye bye. |
