If You're Waiting on FiOS, You Could Be Waiting a While
30% of Verizon Customers May Wait Years for Upgrades
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:
“So what you’re going to see this year is a very strategic initiative, that we go out and we look at areas where there are chronic copper problems and we start to transform them onto our FiOS network. And 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."
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.
And the point of the story is? And what exactly is the news here?
Verizon said from day one, the plan was to abandon copper where FIOS was installed at the CO. They even have a 3/1 tier just for this reason.
Re: And the point of the story is? they'd just put new copper in.
Re: Noooooo don't take my copper line!
said by N3OGH:I won't speak to the quality of TV or IP connectivity with FiOS, just as you didn't speak to the reliability of FiOS telephone service. Apparently you didn't notice the person to whom you replied was referring to telephone service...
I've had Fios for almost 3 years now. Never an issue. Rock solid connection, speeds as advertised, awesome picture quality.
I have to go "off roding" a bit and call astroturfing on your part. The bulk of reviews here at BBR give Fios an above average grade.
I couldn't be happier with the service all around. It really is the best bang for the buck around here, and I recommend to anyone who asks.
I'm a very satisfied Fios customer.....
At any rate, we've found in a business environment that when our lines were delivered by FiOS to a particular branch location, we've had constant issues. Downtime is generally absent when service is delivered by copper, and repaired quickly when it is down. Unfortunately, there is no copper to the location, and we're in the process of trying to get Verizon to run a 25-pair cable to the SLC. It isn't clear why service was delivered via ONTs, when other business at the location in question receive dialtone via a SLC (and have no issues).
Maybe FiOS hates Centrex, or is generally less reliable than copper for POTS.
Was speaking about my negative experience astroturfing?
Re: If only DSL was that of EU and other countries
said by chgo_man99:Right -- Europe didn't have telephone until ADSL2+.
Simple, Europe had to start from scratch building phone system later than America so they got newer infrastructure capable of supporting adsl2+. Not many areas serve VDSL or FTTH.
Oh and remember that cable there has smaller footprint than in the US, limited mostly to cities with condos/blocks, mid-rise or highrise towers. If an area only has single family homes you wont find there cable. Of course it depends on a member country.
| |tobyTroy Mcclure
Re: If only DSL was that of EU and other countries
said by chgo_man99:They were too busy workin' darn' t' pit etc..
Many areas did not have telephone until 90's. Its especially true for central and eastern europe. Look the highest speeds you get are in Romania, Latvia, etc.
That sure is a funny impression of Europe that you have.
It makes sense I read through VZ financial statement. They reduced wireline capex by 50% (2 to 1 billion) which means that this is gravy for the next 40 years. Inherent in their strategy is offloading wireline for marginal areas (why upgrade to fibre and then sell). So they will eventually cover fringe areas that have low competition when the churn rate overtakes the FIOS additions (maybe 2013), and they convert legacy copper to fibre.
AT&T HFC model doesn't make LONG TERM sense because you have the last mile issue w/ copper, and that problem isnt going to go away, so in a few years that will bite them. So for areas w/ FTTH that will be a problem.
FTTH will allow VZ to have hybrid cell/fibre projects and then just bypass copper 100%. They need whitespace or LTE to be done first before they try it (this needs to be 100% IP first), and that will probably happen at the time of VoLTE rolls out (okay maybe 6 months later). Once they do that they can reclaim 3G (1xrtt first), then they can use spectrumco to blanket the big markets.
So the backhaul will be a combo to microwave, LTE, and fibre (depending upon market) and will be LTE/Fibre--that it.
The losers in all of this are going to be areas served by the offloading of the baby bells to the mini bells who have loads of debt and DSL (not that its bad). Economically speaking copper doesnt make sense. Maybe the new pres wakes up and directs all that USF to building FTTH to the people that big corps will never service. That is the ONLY way it will happen, because they are not going to mandate telco like the old days...
This is all very smart. AT&T has taken the more conservative approach approach to this, and is sort of lucky however wireless is where the gravy is so even the dimwitted survive. I have to give credit for iphone tho, it made them rich.
If VZ buys a CDN, then it makes sense to increase fibre. They probably will.
100% They should go to 100% with FIOS. The investors are a bunch of retards who don't understand that Verizon can either upgrade to FIOS or lose to cable.
PUC needs a kick There is still an upside-down base of DSL to FiOS.
Most are suburban (rural) or mid-urban (neighborhoods outside metro areas).
And major concern with the copper plant is they don't want to spend the money (no short term gains) thanks to the failing mentality of no investing in long term.
Near me, bad NIDs, bad splice containers and splitting trunks (we are talking trunk lines that have been hanging on poles since the late 40's and 50's). Water gets into the splices/trunks and NIDS and there goes the process called oxidation. And there are other conditions like "it wasn't designed for this".
We can all pray that some driver (no harm please) or act of mother nature takes out those lines so they have to replace with newer tech.
But like Karl kinda sums up, Telcos like Verizon care only about their bottom line and not the customer or communications future.