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| Dave in DSLR Verizon's End 031210 |
| Friday, 12 March 2010 23:24 | ||
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So, Is This Where Verizon's FiOS Deployment Ends?
<50% served. Hopefully you got FiOS during the first deployment wave... http://www.dslreports.com/shownews/So-Is-This-Where-Verizons-FiOS-Deployment-Ends-107342 http://bit.ly/dwB6Fi
03:24PM Friday Mar 12 2010 by Karl Bode
Verizon's $23 billion investment into fiber to the home was frankly a bold and brilliant decision, spearheaded by CEO Ivan Seidenberg. Seidenberg understood that he needed to look past the myopic, short-term fears of investors and pour some serious money back into the network if Verizon truly wanted to be considered a next-generation broadband company over the next several decades. Because of that, a significant chunk of Verizon's network is now capable of providing 100 Mbps last mile residential connections -- and beyond. That said, we've always wondered where Verizon's investment would end.tags: Fiber · competition · coverage · business · alternatives · bandwidth · cable · telco · networking
But according to long-time industry analyst Dave Burstein, Verizon's essentially cutting and running on additional deployment plans, leaving a very large chunk of their footprint on last-generation DSL and copper-based voice networks. Burstein tells Broadband Reports that he doesn't see Verizon expanding any further (with the exception of major cities where they've signed franchise agreements) unless they get money from Uncle Sam (aka, taxpayers). "They want to get on the gravy train, although I think the new, less competitive leadership is the primary explanation," says Burstein when asked why Verizon's shifting tactics. Seidenberg, the driving force behind the first wave of FiOS, is on his way out -- and his replacements aren't quite as bullish on angering investors for the sake of this whole "future" thing. Verizon's FiOS fact sheet states their FiOS build "passes" (and that means fiber gets close to, but doesn't always necessarily serve) 15.4 million customers, or roughly 48 percent of total Verizon households. Considering the nebulous use of the word "pass," the actual number of Verizon homes capable of getting FiOS could be considerably less. "They've been talking for years about going to 75-80%, and they just threw that out," Burstein says. In his latest industry newsletter, he notes how the city of Alexandria was actually previously on Verizon's install agenda, having been told construction would begin several months ago. Verizon has buildout commitments to New York and other cities that will keep some crews working, but had already suggested they might cut FiOS builds by 2/3rds in 2011. This is now a further cutback, canceling areas that for years they had been promising to serve. Verizon's Harry Mitchell sends their perspective. "The bottom line is that Verizon said in 2004 we’d build to pass about 18 million homes by year-end 2010, and we’re on track to do that with the franchises we currently have. Of course, we will also meet any buildout commitments we made in individual jurisdictions beyond 2010." People in Philadelphia, Washington DC, or New York City (where Verizon has signed new franchise agreements) should still be seeing new FiOS deployments. In New York, Verizon's agreed to wire 100% of the city by 2014, but as with most of these agreements, there's ample fine print that gives Verizon the ability to wiggle out of obligations if they're not seeing the kind of video subscriber uptake they'd like. These city builds should push Verizon households covered past 50% or even to 60%, though that still leaves a lot of Verizon customers left un-upgraded. Verizon did not respond to a request for comment on what happens next. Perhaps Burnstein is right and this is where the FiOS build ends. Though it's possible that Verizon wants to use LTE wireless service as their primary play for markets they don't believe are profitable enough for FiOS. If you're in more rural markets, or second and third tier cities, you may be waiting for a while if you're stuck on last-generation Verizon DSL. Given that many cable operators are only upgrading to faster DOCSIS 3.0 speeds if there's FiOS competition in their local market, that could be bad news on the next-generation broadband competition front for a significant number of markets. |
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