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Will Verizon's FiOS Deployment Freeze Ever Thaw?
Many Cities Still Waiting On Next FiOS Deployment Phase

Last year we discussed at length how with the exception of several major cities like New York, Washington DC and Philadephia, Verizon's FiOS expansion is essentially over for now. That left a significant number of markets suddenly wondering why they weren't good enough for consideration, including Boston, Alexandria, Virginia, Baltimore, Maryland and Wilmington, Delaware. A lot has been made (and in some cases made up) about how some municipalities make unreasonable demands on Verizon and thereby it's their fault they don't get next-generation broadband, but that's a two-way street, and Verizon uses FiOS deployment as leverage to stop cities from asking for even the smallest concessions.

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Keep in mind there is limited to no competition in many of these markets, and Verizon over the years has lobbied to pass more than a dozen state level bans that prevent cities from wiring themselves. Verizon knows if a city asks too much in Verizon's opinion (like say, Verizon actually paying property taxes like everybody else) Verizon can pull the plug knowing nobody else will deliver such speeds. That's a pretty potent negotiating position and, as the only major telco with the guts to re-invest this kind of money back into the network, it was earned.

In Wilmington they've yet to see FiOS in part because they wanted Verizon to offer service everywhere (something Verizon agreed to in NYC and DC), and to adhere to some basic consumer satisfaction standards. Verizon has rejected Wilmington's pleas over the last year, and negotiations really broke down when Wilmington raised concerns about cherry picking. Delaware Online quotes a Verizon executive who claimed several years ago that Verizon FiOS would arrive any day now:

quote:
Allan would not tip his hand about whether the company would agree to such a condition. But he expressed confidence that everything would work out. He noted that Dover, Newark and Middletown have timetables for how Verizon will provide service to all customers..."We plan on building out the city of Wilmington," Allan said. "Right now our engineers are looking at what is the most logical way to go about this. All I can say is: stay tuned. You may be surprised."
Nothing ever happened, which we suppose could be surprising. The company's FiOS pause was dictated by the top ROI locations in the first wave, but it was also paused in part due to other factors, including a sour economy, the hope that Verizon could get more USF subsidies (they are), and the fact their biggest FiOS fan and CEO Ivan Seidenberg is headed out the door this Spring. Verizon also wanted to pause to ramp up marketing and improve penetration in existing markets. The company is expanding into areas that they're obligated to under existing franchise agreements, but the company is telling residents of Diamond Bar, California that upgrades won't resume until late this year or even early next.

With the offload of 4.8 million residential lines to Frontier Communications last year, about 40-50% of Verizon's network currently remains un-upgraded. Verizon may continue to sell off rural networks they don't believe will deliver solid ROI, while other DSL markets appear to be getting ADSL2+ that tops out at 15 Mbps downstream. We likely won't see a new push anything like the first, though it remains likely that some of these cities overlooked in the first wave may finally see some movement late this year.

Update: The original version of this story briefly suggested the 2008 Delaware Online story linked above contained new information. That was quickly corrected, and for the record Verizon still hasn't wired Wilmington, Delaware with FiOS -- and apparently has no intention to anytime soon.