News

Verizon: Big-Fiber Triple Play’s On the Way

5/30/2004 8:00 PM Eastern

Verizon Communications Inc. said it’s throwing a fiber loop around video, voice and high-speed data in a big way — after a relatively small start.

The regional phone giant said it is beginning what will be a wide rollout of a bundle of high-speed Internet at various speeds, Internet protocol-based video and telephony services this summer in the North Central Texas town of Keller.

Verizon executives said that by year’s end, the telco intends to link 1 million homes in nine states to its fiber-to-the-home plant.

They did not name other markets where the architecture may be deployed, but telecom analysts said Teaneck, N.J.; Tampa, Fla., and suburban Washington, D.C., are other possible FTTP deployment locations this year.

The company has already installed 420,000 feet of fiber optics in Keller (population 19,200) — about one-third of what’s needed to cover the community.

Verizon will spend $15 million just on the Keller project, said Paul Lacouture, president of the network-services group.

GOLD NO MORE

Fiber-to-the-home architecture was once considered the equivalent of gold-plated infrastructure. Its cost had been the downfall of some cable overbuilders.

But component prices are slowly coming down, according to analysts. And while Verizon and other regional phone companies have announced past plans to replace vast amounts of their copper lines with fiber, only to back away, analysts seem more persuaded the effort will bear fruit this time.

“It’s just something they have to do,” said analyst Patrick Comack of Guzman & Co. “The prices are going down gradually and the copper will get thrown away. It’s garbage.”

Verizon said plans call for a total of 2 million homes to be passed by the end of 2005. Verizon will open a 50-employee technical support center in Dallas to support FTTP in Keller, as well as other cities to be determined this year.

Executives declined to discuss specific pricing or programming strategies at a May 18 press conference, which took place at a homeowner’s association clubhouse in the Texas city.

Bob Ingalls, president of the retail marketing division for Verizon Networks, did refer to the current 150-channel video environment. “We’ll offer 10 times that,” he said.

Using TV-over-Internet protocol, the company will be able to greatly expand programming access, letting a viewer tune in to programs originating from Ireland or India, he said.

HTDV signals are in the future plans, too, he added.

The company will offer data services for the casual user, at 5 Megabits per second downstream and 2 Mbps upstream. The fastest service will be 30 Mbps down and 5 Mbps up.

That maximum speed will increase to 100 Mbps next year.

Verizon executives wouldn’t discuss pricing, but said charges would be comparable to the current price for 1.5 Mbps of downstream capacity.

The service was welcomed by state and city officials.

City manager Lyle Dresher said he gets calls every week complaining about the lack of high-speed data service.

“Obviously, [Verizon’s] invested its future right square in the center of Keller,” Mayor Julie Tandy said at the press conference, which was also presented over the telephone for the benefit of out-of-town press and analysts.

Charter Communications Inc. serves Keller. MSO spokesman Dave Mack said Charter already has competition in the market, from direct-broadcast satellite providers to other telephone companies that provide high-speed data. “So the Verizon product is just more of the same,” he said, adding that Charter plans on winning the competitive battle with “superior products and an exceptional customer experience.”

State officials lauded the project. In a letter read by Verizon officials, the local legislator praised the telco for “leading the broadband charge.”

CABLE DATA IN TEXAS

Texas Cable & Telecommunications Association president and chief operating officer Amanda Batson said the trade group’s members have already invested $1.8 billion to upgrade the state’s cable systems and provide high-speed data service.

Cable modems are now marketed in 530 Texas cities, covering 65% of the state.

Analysts said the Verizon project and others would not have an immediate effect on cable competitors. It will be at least 2005 before telcos can widely offer video competition, they said.

“Cable’s getting into telephony much faster than telephone companies will be able to get into the video business,” said Comack.

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