While fibeReality will never be an apologist for any corporation, the current attacks on Verizon regarding the reputed insufficient amount of Fiber To The Home (FTTH) activity in the city of New York are just unfair. Unlike Google, which currently appears to be concentrating more on making announcements on FTTH rather than actually deploying anything, no other firm other than Verizon has come close to spending the billions of dollars to connect fiber to residential customers in the United States. While Verizon will compete aggressively to protect its assets from competitors, the fact of the matter is that the city would probably have now have been at least a decade behind in getting fiber to homes without the service provider’s actions over the last several years.
As DSLReports points out, all of the critics seem to be ignoring the fact that Verizon was upfront about its intentions of not even coming close to providing fiber directly to all of the homes in NYC. At the same time, when it came to multi-dwelling units, the carrier went to the expense of putting an optical networking unit in every apartment, when it could have easily just stopped with fiber to the building. The deployment of FiOS also resulted in the CATV companies to become more competitive in offering broadband services to the metropolitan area.
For the US optical market as a whole, Verizon’s FiOS program has been debatably the only significant positive aberration to occur in what has been a quasi-depression for 15 years. It had a significant impact on technology development, such as the aggressive movement to GPON systems. The urgent requirement to substantially reduce costs resulted in factory fiber terminations rather than expensive splicing in the field.
As alluded to in our previous blog articles, Verizon took advantage of the change in FCC policy, which did not require unbundling, and concentrated its FiOS activity along the I-95 corridor from Boston to Richmond, making sure to pass all of the big enterprise customers, which would provide much higher margins than the residential space. Yet, with all of these major cities kind of top of one another geographically, there were economies achieved in providing consumer video services in sort of a straight shot. Also, there turned out to be extraordinary maintenance cost savings in shifting from copper to fiber to the home.
While AT&T was not as blessed with its geography in its incumbent territory, it could have done something similar to enable fiber to the business to finance FTTH. For example, it could have targeted the large cities along the California coast – and/or perhaps go for a Dallas-Houston-San Antonio triangle approach. Unfortunately, to this day, AT&T is simply not even close to being as entrepreneurial as Verizon.
Regarding Verizon itself, the nonsense regarding FiOS in NYC will undoubtedly make it even more determined to fully exit its residential line business even sooner.
[written by Mark Lutkowitz]
(To see our unique explanation for Verizon’s acquisition of AOL, please click here.)