We've noted often how with the exception of a few major existing franchise obligations, Verizon's FiOS upgrades are essentially over. That means around 40% of Verizon's broadband customers on slower DSL and in a lot of major cities (Boston, Baltimore, Buffalo) are still waiting for next-generation upgrades. The company is now focused on far more profitable wireless ventures (read: no unions, no pensions), and if you're currently stuck on DSL the understanding has been that you can expect it to stay that way -- assuming your market isn't sold off to a smaller phone company.

Verizon's still a little murky on exactly what the next phase of FiOS entails (if there is a next phase). Stacey Higginbotham at GigaOM noticed a few interesting new comments made by Verizon CFO Frank Shammo during today's earnings conference call. According to Shammo, there is going to be a concerted effort this year to upgrade people to FiOS if they're dealing with highly problematic copper lines. Said Shammo on the conference call:Shammo's comments could give the impression that Verizon wants to single out any and all costly copper repair markets and upgrade those users for cost efficiency's sake, but in a follow up conversation with Verizon we found that's not entirely the case. We're told Shammo was simply saying that in markets where a customer has the choice of both FiOS and DSL, Verizon's going to auto-upgrade DSL users who've had particularly troublesome lines. Shammo's not saying that if you're just out of range that Verizon will try to upgrade you, even if the economics of running fiber are cheaper than copper.

The math would say if there is a chronic problem that we have to visit more than two times a year, the actual financial benefit of us transforming that to FiOS pays for itself within that year. -Verizon CFO Fran Shammo

"We're leveraging our multi-billion investment in fiber optics, at no additional cost to the consumer, as we begin transitioning customers who've had chronic problems with their copper-based services over to FiOS," Verizon's Bill Kula tells Broadband Reports. According to Kula, as of the end of 2011 Verizon passed (not necessarily served, customers may be just out of range) 16.5 million households with fiber.

The last available statistics show that after selling off a significant chunk of their DSL and landline networks to Frontier, roughly 60% of Verizon's existing broadband footprint is covered by FiOS. That still 40% of Verizon broadband users on DSL at a time when investors are unwilling to wait for the long term returns of further upgrades. Verizon says their goal is to have 70% of their overall broadband footprint covered with FiOS as they reach 18 million homes passed.

The majority of the users that will bump the hopes passed total from 16.5 to 18 million will come from ongoing obligation builds in New York, DC, Philadelphia, and other cities that have signed franchise agreements. However, not all of those users can expect coverage, either. In New York City Verizon's franchise agreement promises they'll cover 100% of the city by 2014, but the agreement fine print allows Verizon to buy or wiggle their way out of that agreement if they're not seeing the kind of TV subscription uptake they'd like.

That still leaves about 30% of Verizon's broadband customers without upgrades, and it remains unclear what happens to them. You still get the sense that Verizon certainly wouldn't be opposed to offloading a few more undesirable markets like they did with Fairpoint and Frontier, though criticism about the more under-handed nature of those slick deals has grown a little loud. Between selling off some additional smaller markets and making piecemeal upgrades, progress for those remaining users may be glacial. If you're in a city like New York where there are franchise obligations

Keep in mind there continues to be concerns that Verizon's new wireless deal with the cable industry includes a gentlemen's agreement that Verizon won't push FiOS into any new cable partner markets beyond their already scheduled build. There has also been some pressure recently by Wall Street for Verizon to fuse with Verizon Wireless and get out of wireline completely, given the higher costs associated with workers who unionize to protect their rights. Whatever happens one thing remains clear: about 30% of Verizon's customer base could be waiting a long time for upgrades.