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It’ll take more than my recent experience with FIOS (here, here and here) to sour me on Verizon. I love Verizon . . . to the tune of $340 a month for five accounts (aka phone numbers). In addition, I pay $29 a month for my Autonet Mobile Router for Autonet’s use of Verizon’s network. Plus my wife’s phone, paid through her business, is Verizon too.

By the way, I have no portfolio against Verizon technicians either. They’re usually skilled, informed, ernest, and hard-working! They’re also skeptical of and knowledgeable about their employer, in my experience.

This morning there are two recent reports that have me pondering Verizon’s future. The first says that Apple is working on a CDMA iPhone. The second says that Verizon is no longer seeking new FIOS TV franchises.

The CDMA iPhone story leans heavily on the fact that Verizon’s mobile network is CDMA. (AT&T, like most of the world, is GSM rather than CDMA.) In the US, both Sprint and Verizon use CDMA. In the rest of the world, the only other place where CDMA rules is South Korea.

The AT&T U.S. exclusive on iPhone has been a life raft. iPhone has been approximately the largest (and maybe the only current) source of AT&T’s growth. in 4Q09, AT&T gained 2.7 million new customers but activated 3.1 million new iPhones [source].

Now Verizon might be getting the iPhone. All these years AT&T has been saying, “Competition, not regulation.” Hmmm. Arguably, here comes competition. If the article is right, *when* Verizon gets the iPhone is still an open question.

The clear winner in an iPhone duopoly will be Apple. Once iPhone users find that the same beautiful iPhone multi-touch gestures transfer to the iPad, the iTouch and future products, Apple will have earned the loyalty of a couple or three generations. Put another way, the map battle between Verizon and AT&T won’t be near as important as the app map in users’ hands.

Speaking of maps, AT&T reminds me of the guy in a hole who chooses the shovel instead of the ladder. AT&T coverage, in terms of square miles, doesn’t measure up to Verizon’s. AT&T has suffered a beating for network problems related to the iPhone. So what is AT&T doing? It will sell its femtocell for $150. Really. It will take a device that could keep customers locked into AT&T monthly service while off-loading traffic from AT&T’s flaky wireless network to whatever broadband network the femto is hooked to, and charge to own it. It will charge more than a wi-fi hotspot. AT&T should be giving femtocells away. Repeat: AT&T should be giving femtocells away. The more AT&T femtos are in the field, the better it will be for AT&T.

Wi-fi is the wild card in all these plans. The simplest scenario would be this: Apple makes wi-fi the default network for the iPhone, with licensed mobile spectrum the fall-back (if the device owner has an account). Presto. Change-o. iPhone-based lucre for AT&T and Verizon . . . pffft.

Under this scenario, using licensed spectrum would be like smoking. First you wouldn’t use it in stores and restaurants. Then you wouldn’t use it in your house. Soon, there will be no need to do it on trains, planes or busses. You’ll only do it in your car, or if you’re walking. Winner: Apple.

(Are there any scenarios in which Apple loses? The only two I can think of are (a) a new, totally awesome device maker appears or (b) a newly-draconian regulator short-circuits wi-fi’s potential and strengthens the carrier-device bond. Neither seems imminent.)

So, now, what about Verizon’s move away from new FIOS TV franchises? Maybe FIOS TV has not panned out for Verizon. We know that entering brand-new businesses is not a big telco forte. We know that building a head-end is one of the most expensive parts of a triple-play fiber network. We know that acquiring “content” — programs — is a battle. We know that gaining TV franchises city-by-city or state-by-state isn’t cheap or easy — so many local officials to (. . . cough, err, cough, sniff, um, errr . . . ) convince.

One source says that of the 15 million plus homes that Verizon has passed so far on its way to 18 million, it has only signed up about 3.4 million Internet customers. That’s a take rate of between 19 and 23%. Michael Render, at Render Vanderslice Associates, who studies these things for the FTTH Council, pegs the ILEC take rate on FTTH at closer to 30%. The difference between 23% and 30% could well be the difference between unsustainable and sustainable. My glimpse inside the Verizon FTTH splitter box in my neighborhood reveals a take rate closer to 10 or 15%.

Compare Michael Render’s non-ILEC FTTH take rate of about 53%. My own work earlier this year at the FCC shows clearly that a non-ILEC FTTH effort can achieve take rates much, much higher than Verizon’s even with reasonable DSL and cable TV triple-play competitors present. One example is Bristol Virginia Utilities, with incumbent telco and cableco competition, but with FTTH take rates of 64.8%, 69.9% and 74.5% for data, phone and TV.

We also know that Verizon’s move away from FIOS TV is in the context of Verizon’s disinvestment in landline ops in many rural states, beginning with Hawaii, and northern New England, with a deal for 14 other rural states in the works.

I wonder, from Verizon’s point of view, if FIOS looks to be an unsustainable, perhaps marginal business. Maybe Verizon fears FIOS will be disruptive to its main business. Maybe Verizon sees its own inability to convert existing customers to FIOS as an indicator that the future of FIOS is weak. Maybe Verizon is ambivalent about marketing FIOS to its existing customers. Maybe Verizon sees the likelihood that it will run two parallel networks, one fiber and one copper, as a future it doesn’t want to live in. Maybe, in other words, Verizon is reaching its day of reckoning with a disruptive technology.

Verizon’s (hypothetical) view is that the iPhone is Verizon’s future, while the FTTH business (and perhaps the whole landline business) is dead. This *could* be exactly backwards. One move by Apple or the FCC might make the iPhone business a lot less attractive. On the other hand, the current FIOS business, played correctly, could boom. I’m not saying either of these things will happen. I’m only saying that Verizon should be aware of its own cultural blinders. (Every organization wears them.) And maybe Ivan Seidenberg should dust off his copy of The Innovator’s Dilemma and throw it in his briefcase for his next business trip.

Technorati Tags: Apple, AT&T, DisruptiveTechnology, FTTH, ScenarioPlanning, Verizon