The FiOS Finish Line


Verizon is nearing the end of its $23 billion FiOS buildout, on track to pass at least 18 million homes this year, as the company has said for the last several years.

Left out of the fiber ring: Boston and Baltimore, among other communities including Alexandria, Va.

At this point, Verizon will focus on building FiOS in cities where it has cable TV franchises, including New York City, Philadelphia and Washington, D.C., Verizon media relations director Bill Kula wrote in the telco’s blog last week, apparently responding to discussion touched off by a March 9 Washington Business Journal piece.

Does this mean FiOS is becoming a less potent competitor to cable?

Sanford Bernstein’s Craig Moffett thinks so, adding that AT&T’s U-verse expansion is slowing down as well: “As Verizon’s and AT&T’s fiber rollouts near completion, the competitive pressure posed by TelCo video on cable and satellite is likely to meaningfully subside,” he wrote in a note Wednesday.

True, FiOS TV’s growth slowed dramatically in the second half of 2009 (see FiOS Hits Brakes At End Of 2009). And Verizon CEO Ivan Seidenberg told investors in January the telco would focus on profitability instead of capturing share with FiOS: “[W]e have discovered the idea that if we focus a little bit better, we’re going to get the market without having to necessarily overheat the market at any point in time.”

So, easing up on the gas pedal just means FiOS won’t be packing on the subs using pricey customer-acquisition incentives (e.g., free HDTVs, which was one of the things that got Verizon into hot water with the state of New Jersey).

But the FiOS guys aren’t riding off into the sunset. The biggest charge of the light brigade might be over, but now Verizon will be settling in for years of hand-to-hand combat to maximize the revenue it squeezes from its expensive fiber infrastructure.