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Verizon Gets More Specific About Those FiOS Cutbacks
Millions of users trimmed from planned deployments...

We've already discussed at length about how Verizon's FiOS expansion is essentially over -- with the exception of markets where Verizon's already signed a franchise agreement. Verizon's interested at this point in focusing their efforts on marketing to already deployed markets, and they're pausing to see whether they can get some USF or stimulus funds in the process. Verizon has canceled deployments into some markets they had previously planned to reach, and Dave Burstein has a little more detail on the numbers behind those cutbacks:

quote:
Verizon recently confirmed they will add 3M FiOS homes in 2010 but have now cut that to 1M for budget reasons. They implicitly also confirmed they are cutting back future FiOS builds as well by 2-4M homes from the original plans of 80% of homes passed. Verizon to get a New York City and other franchises have promised 100% local deployment, so unless they breach the franchise agreements they will reach 18-19M in a few years.
Burstein doesn't note that many of those city franchise agreements that "guarantee" 100% city coverage have loopholes that allow Verizon to buy their way out of said obligations, or avoid fulfilling the obligations should they not see the kind of TV adoption rates they were hoping for. Meanwhile, Burstein directs our attention to the fact that Baltimore next week will be holding a hearing to try and figure out why they weren't FiOS worthy -- something Boston, Alexandria and a number of other markets are also wondering.

Meanwhile there's a touch of irony in that broadband stimulus plans designed to ramp up deployment are actually playing a role in slowing both AT&T U-Verse and Verizon FiOS deployments -- as both companies pause to see if they can get in on the USF and subsidy buffet.

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ddg4005
Premium Member
join:2001-08-22
Bronx, NY

1 edit

ddg4005

Premium Member

Verizon Gets More Specific About Those FiOS Cutbacks

I recently signed up for Optimum Online Boost and Optimum Voice (my installation and activation date is May 1) because I was tired of the games Verizon played with my DSL speeds. This just confirms I made the right choice.

aztecnology
O Rly?
Premium Member
join:2003-02-12
Murrieta, CA

aztecnology

Premium Member

Re: Verizon Gets More Specific About Those FiOS Cutbacks

I still say they are cutting back because they need the cash for LTE. Wireless drives the earnings for the company...

FFH5
Premium Member
join:2002-03-03
Tavistock NJ

FFH5

Premium Member

Re: Verizon Gets More Specific About Those FiOS Cutbacks

said by aztecnology:

I still say they are cutting back because they need the cash for LTE. Wireless drives the earnings for the company...
And they are waiting for the gov't to shower them with broadband plan money. Why spend your investors money if the gov't will give it to them for free.
mobbo
join:2005-04-13
Denton, TX

mobbo

Member

Re: Verizon Gets More Specific About Those FiOS Cutbacks

Does any of that stimulus money come with strings attached or is it just "here's a check. have fun!"?

Bill Dollar
join:2009-02-20
New York, NY

Bill Dollar to FFH5

Member

to FFH5
Well, there's no BTOP/BIP stimulus money for them, because the process has ended with the second NOFA.

They could be waiting for additional USF monies, but that's for rural areas they'd never bring FiOS to anyways.

Perhaps they are waiting to see what happens on broadcast spectrum reclamation, and are reserving cash for future auctions. But that is years off, if it ever happens.

So I am not really sure what "broadband plan money" they are waiting for.
patcat88
join:2002-04-05
Jamaica, NY

patcat88

Member

Re: Verizon Gets More Specific About Those FiOS Cutbacks

said by Bill Dollar:

They could be waiting for additional USF monies, but that's for rural areas they'd never bring FiOS to anyways.
...............................
So I am not really sure what "broadband plan money" they are waiting for.
USF money. Last I read a few years ago (mid-late 2000s), the USF uses the 1990 census for the determination of "rural". So many areas that were "rural" in 1990 are cul-de-sac suburbs today. Telcos laugh all the way to the bank. Im not sure if the FCC has updated and changed their USF subsidies to reflect the 2000s census by now. There was also the Hawaii "homestead" USF controversy, since the telco applied for massive USF subsidies, to build a FTTP network, using the population count before anyone moved into the subdivision. Because this hawaii telco was building in an indian reservation/native hawaiians, they could get away with murder since for the FCC to deny the application would have been white man oppression against indigenous americans.

tim_k
Buttons, Bows, Beamer, Shadow, Kasey
Premium Member
join:2002-02-02
Stewartstown, PA

tim_k to aztecnology

Premium Member

to aztecnology
said by aztecnology:

I still say they are cutting back because they need the cash for LTE. Wireless drives the earnings for the company...
Typical short sighted planning by greedy top exects. They see the profit margins of wireless and figure, 'why have any landline at all?'. I guess they think all those customers with $20 DSL who they've been screwing over are all going to suddenly switch to $50-70 4G when it's deployed. Also, Ivan is leaving so I bet he's trying to make the short term balance sheet look great so he can cash in before he jumps ship.

unother
join:2005-03-23
Brooklyn, NY

unother

Member

Re: Verizon Gets More Specific About Those FiOS Cutbacks

said by tim_k:

Typical short sighted planning by greedy top exects. They see the profit margins of wireless and figure, 'why have any landline at all?'
Oh, come on! OP was not saying that they expected people to use 4G *instead of* FTTH. Priorities need to be set, and at the margins, profitability shrinks.

This is *why* the FCC enforces "universal access" provisions--after a certain point there is a small margin to be gained as you build out progressively more infrastructure to progressively sparser and/or poorer areas...

And finally: let's not forget that not everyone *really cares* about FTTH...

tim_k
Buttons, Bows, Beamer, Shadow, Kasey
Premium Member
join:2002-02-02
Stewartstown, PA

tim_k

Premium Member

Re: Verizon Gets More Specific About Those FiOS Cutbacks

said by unother:
said by tim_k:

Typical short sighted planning by greedy top exects. They see the profit margins of wireless and figure, 'why have any landline at all?'
Oh, come on! OP was not saying that they expected people to use 4G *instead of* FTTH.
And neither did I. I said Verizon is switching priority to wireless from landline (copper & fiber) because they see higher profit margins with wireless. It is a fact that Verizon is neglecting copper plant and holding off on expanding FIOS. It's also a fact that they are pushing their latest brainstorm, LTE. So what would you conclude? If they deploy LTE in areas they are selling off then the only conclusion can be that they expect landline customers to switch to LTE.Corporations are always trying to get bigger. Selling off huge areas doesn't make sense unless Verizon feels they can capture those same customers they sold off by having them sign onto a higher profit margin service.

Murdoc49
Premium Member
join:2009-02-08
Manitowoc, WI

Murdoc49

Premium Member

use that 1.99 phantom fee....

if your pockets are really that empty. Or maybe quit lobbying for a while.
daslog
join:2002-04-10
Milford, NH

daslog

Member

It's just simple Math...

FIOS costs too much to Deploy. Verizon needs to see more return on their investment before they can fund further expansions.

pogo_TX
@sbcglobal.net

pogo_TX

Anon

Re: It's just simple Math...

Agreed. It costs Verizon $650+ to pass a home with FiOS, while MSOs spend only ~$20 to pass a home with DOCSIS 3.0.

I'm not sure the telcos can afford FTTH (or FTTN for that matter) when the MSOs have such a low investment. MSO's will get almost immediate ROI. Conversely, NTT's FTTH network is still not profitable 10 years after it launched and they have very little cable competition compared to North American telcos.

RARPSL
join:1999-12-08
Suffern, NY

RARPSL

Member

Re: It's just simple Math...

said by pogo_TX :

Agreed. It costs Verizon $650+ to pass a home with FiOS, while MSOs spend only ~$20 to pass a home with DOCSIS 3.0.
The low cost for MSOs is due to the cable to the home ALREADY being there. All that is needed is to upgrade the Head-End equipment and the customer's modem. FIOS actually requires that the fiber be run and connected to the user's home. A better comparison would be if the fiber were already installed to the user and all that was needed was to replace the connection equipment (ie: Go from BPON to GPON for example).
patcat88
join:2002-04-05
Jamaica, NY

patcat88 to pogo_TX

Member

to pogo_TX
Better question, did MSOs ever get their ROI from installed Cable in the first place, IE 1970s 1980s?

cpayne5
Premium Member
join:2004-01-06

1 edit

cpayne5

Premium Member

Take this with a grain of salt if you like...

My cousin was a fiber tech in the northern Virginia area with Verizon. He would go and splice the fiber after the contractors put it in the ground in preparation for FIOS. He was one of 300 (I think) fiber techs let go back in February. He said that at their height, they were passing 5000 houses a month and that he was told they may pass as many as 5000 houses a year going forward. It certainly sounds like FIOS deployment has come to screeching halt. But like I said, don't take this as gospel, it's just what I've heard.

aaronwt
Premium Member
join:2004-11-07
Woodbridge, VA
Asus RT-AX89

aaronwt

Premium Member

Re: Take this with a grain of salt if you like...

said by cpayne5:

My cousin was a fiber tech in the northern Virginia area with Verizon. He would go and splice the fiber after the contractors put it in the ground in preparation for FIOS. He was one of 300 (I think) fiber techs let go back in February. He said that at their height, they were passing 5000 houses a month and that he was told they may pass as many as 5000 houses a year going forward. It certainly sounds like FIOS deployment has come to creeching halt. But like I said, don't take this as gospel, it's just what I've heard.
WOW!! I'm glad I got my FiOS service back in 2007.

Gary A
join:2008-03-02
Odessa, FL

Gary A

Member

Re: Take this with a grain of salt if you like...

said by aaronwt:

said by cpayne5:

My cousin was a fiber tech in the northern Virginia area with Verizon. He would go and splice the fiber after the contractors put it in the ground in preparation for FIOS. He was one of 300 (I think) fiber techs let go back in February. He said that at their height, they were passing 5000 houses a month and that he was told they may pass as many as 5000 houses a year going forward. It certainly sounds like FIOS deployment has come to creeching halt. But like I said, don't take this as gospel, it's just what I've heard.
WOW!! I'm glad I got my FiOS service back in 2007.
Me too (Sept. 17, 2007)!!!!
Mark F1
join:2007-08-01
Fort Wayne, IN

Mark F1

Member

Re: Take this with a grain of salt if you like...

August 2007. Too bad we will lose it, after almost 3 years, when we are sold off this summer. FIOS we hardly knew ye.
Mark F

Morac
Cat god
join:2001-08-30
Riverside, NJ

Morac

Member

Verizon finished cherry picking

Verizon has always cherry picked where they deployed FIOS, they probably just finished all the high profile areas. They were always losing money on FIOS deployments so I don't see how now is any different.

It has little to do with franchise agreements since FIOS lobbied for and got a state-wide franchise agreement to deploy FIOS in NJ. That was a few years ago and at the time I saw Verizon trucks wiring the polls near my development, but they never deployed there, they simply passed on to the next town.

I don't expect to see FIOS in my area for 10 years or so.
Mark F1
join:2007-08-01
Fort Wayne, IN

Mark F1

Member

Re: Verizon finished cherry picking

Now they are cherry picking who to continue serving and who to sell off. Someone estimated that in a number of years, FIOS TV and internet will be available only in the Northeast. Everyone else, who now has FIOS, will have to settle getting less from another company- fewer channels and poor PQ from Comcrap, outrageous internet caps and lousy overall service from Frontier, etc.
Mark F
iansltx
join:2007-02-19
Austin, TX

iansltx

Member

Time for competitors to step up

Now that Verizon has drawn the line in the sand, the rest of the country is up for grabs, since they won't be deploying FiOS to compete with whatever another operator will do.

In central TX two telephone cooperatives have overbuilt, or are overbuilding, Verizon with fiber. One offers 40/10 (GVTC). One isn't as fast, but could offer some nice speeds eventually. These areas will never see FiOS, so they'll be the only fiber in town.

Sure, it's going to take a triple play or business connectivity to pay down a fiber build, but just because VZ isn't doing it doesn't mean that no one else can.

en102
Canadian, eh?
join:2001-01-26
Valencia, CA

en102

Member

Re: Time for competitors to step up

I almost wouldn't be surprised though - to have VZW (or CableCo) finding ways to make it hard for the overbuilders to do business.

Rule 1:

Find a way to have someone else pay for it (i.e. government or customer)

Rule 2:

Protect my investments - via lobbiests or other means (even though I may not build out... I don't want anyone else to either)

Rule 3:

If I'm the only show in town...I don't have to compete.
iansltx
join:2007-02-19
Austin, TX

iansltx

Member

Re: Time for competitors to step up

On rule 3, for a city f any size that's a soft target for a competitor. Especiqally if Verizon doesn't plan to do FiOS in the area...wireless techs can beat 7/768 these days (or, more likely, 3/768).
patcat88
join:2002-04-05
Jamaica, NY

patcat88 to en102

Member

to en102
Make the ROW/poles/conduit unaffordable. Demand that a VZ tech, at $90 per hour, 4 hours minimum, watch the overbuilders techs to make sure no damage happens to VZ plant. Declare 90% of the poles too damaged and must be replaced, at overbuilders expense (different standards for VZ self replacement vs attachment lease replacement). Install poles too short for anyone except power co, telco, and cable co (cable co paid to replace all the poles with 1 foot taller poles 25 years ago). Have municipality pass ordinance that only off duty police officers can "manage traffic" or place a cone on a public road or side walk ($100 per hour for first 2 hours, $50 per hour after that, minimum 4 hours, in my town, for ANY utility work). Have municipality create "street embargos" ordinence for new or recently paved roads (5 years), so only "emergency" penetrations can take place. No overbuilders then!!!
margaf
join:2000-12-22
Las Vegas, NV

margaf

Member

Is anyone surprised...

at the shortsightedness of VZ? Fiber is the future and FIOS was/is a great way to be a step ahead years down the road, yet the quest for short term profits is put ahead of long term real growth.

Mahalo
join:2000-12-20
united state

Mahalo

Member

Re: Is anyone surprised...

What would you do if you were the CEO? Keep burning through the money and not make a profit? Where would that leave you...with nothing. It is not the government or a non-profit organization, they have to make money to pay the bills as well.
sonicmerlin
join:2009-05-24
Cleveland, OH

sonicmerlin

Member

Re: Is anyone surprised...

said by Mahalo:

What would you do if you were the CEO? Keep burning through the money and not make a profit? Where would that leave you...with nothing. It is not the government or a non-profit organization, they have to make money to pay the bills as well.
What makes you think they weren't making a profit? Their financial report indicates a different story. They sell their fiber service at hugely inflated prices and still manage respectable uptake rates. They'll make back their investments relatively quickly.

The only reason they stopped deploying FIOS is because Seidenberg's heading out and no one else in the company wants to compete with cable.

Mahalo
join:2000-12-20
united state

Mahalo

Member

Re: Is anyone surprised...

Yep, they are making a profit with the areas they cover currently. I'm taking it that you want them to continue the expansion. That was a billion dollar expense they put out to get that ball rolling and yes, they are making a profit... to help regain some of that expense. BTW, I never said they were not making a profit. I asked you what you would do and you didnt answer the question. Play CEO for a day.
sonicmerlin
join:2009-05-24
Cleveland, OH

sonicmerlin

Member

Re: Is anyone surprised...

said by Mahalo:

Yep, they are making a profit with the areas they cover currently. I'm taking it that you want them to continue the expansion. That was a billion dollar expense they put out to get that ball rolling and yes, they are making a profit... to help regain some of that expense. BTW, I never said they were not making a profit. I asked you what you would do and you didnt answer the question. Play CEO for a day.
I would be just like Ivan, a CEO, who realized the necessity of future-proofing their landline service in the face of cable's DOCSIS 3 onslaught.
BosstonesOwn
join:2002-12-15
Wakefield, MA

BosstonesOwn to Mahalo

Member

to Mahalo
play Ceo for a day , a week , hell how about 5 years ?

What do you do ?

It's real easy what we do. We evolve or become obsolete. Ivan grew up in the VZ system he has an eye for the future. He is being forced out by greed.

He knows that they need to evolve.

In my view. Real easy.

Think of it as a poker game. Right now we drew a couple bad cards. Either we need to double down while it's cheap and try and take this pot , or we need to fold and lose what we put in.

I don't know about you , but it's cheap to try and buy the win right now. I'd take the risk knowing I have VZW profits and an Iphone due out soon to help prop up the deployments.

Right now, we need to put it on the line and try and come out of the down turn a stronger company.
margaf
join:2000-12-22
Las Vegas, NV

margaf to Mahalo

Member

to Mahalo
They are making a profit and if they werent so shortsighted they would wind up ahead of cable in the long term.
sonicmerlin
join:2009-05-24
Cleveland, OH

sonicmerlin

Member

Verizon is Redlining: From Burstein's Article

Baltimore, with a large minority population, is not getting fiber while Maryland suburbs are. Baltimore is literally demonstrating in the street about that. The pattern is repeated, with inner cities and poorer rural areas getting inferior service. Verizon says they are not red-lining based on income but that's the practical effect of their plans. I've asked for, but haven't been given, the demographics of FiOS vs. non-FiOS territories. Unless they release that data, I'm going with Congressman Waxman's analysis they are providing inferior service - literally a tenth the speed - to the poor.

••••••••

bcronin
Premium Member
join:2004-03-27
Hyde Park, NY

bcronin

Premium Member

Opinions?

So, do you think that if VZW ran fiber throughout my town last year, but stopped short of installing the boxes and making the service available that we're SOL? I was hoping that his year they'd finish the job. It's maddening to see all that fiber up there on the poles and not being able to order the service.

•••••
nowayout
join:2009-06-22
Allentown, PA

1 edit

nowayout

Member

Local advertising - what a concept!

If they're looking for Fios subs, they might, y'know, try letting people in my city know it's available.

Generally we hear about people getting postcards in the mail stating "Fios is Coming!" and things like that. But my area, despite Fios availability, hasn't gotten them. I even signed up online to be notified when Fios is available. I'm still waiting for that notification.

If I wasn't already anxiously awaiting Fios and obsessively checking every week for availability, I'd have no idea it was available. There has been zero local effort.

We're considered part of the "Philly" market, but Philly is 60 miles away. We've long grown to expect that 9 times out of 10, Philly ads don't apply to us. They need to market directly to us to let us know about the service. They can't stick us in with Philly and expect results.
Warren968
join:2009-11-13
Brooklyn, NY

Warren968

Member

Still waiting for FiOS in 11208 Brooklyn....

... probably for a few decades..

Just like when cable was announced for Brooklyn in 1970 and arrived in this zip code in the mid 1990s.
moonpuppy (banned)
join:2000-08-21
Glen Burnie, MD

moonpuppy (banned)

Member

There are a few reason why Baltimore City will not get FIOS

I lived in the city for over 20 years and know the variety of reasons they will not get FIOS anytime soon.

1) Baltimore City tried for years to get a cable company into the city. Every time they thought they had an agreement, the city would come in with another unreasonable demand (like 2 public access channels.) While every county around the city had cable, the city didn't get one until 1984.

2) When United Cable finally came in, they were told to get the city wired in 4 years with 100% coverage. I know a friend who lived in the last area that was told they were not getting cable service because their block was too difficult to wire. It wasn't until a local resident (who happened to be a lawyer) filed a lawsuit at 4:50PM on a Friday against the cable company did the trucks start rolling.

3) When cable service first started, they all used the old boxes that everyone needed. "Poor people" were signing up for the service and then not paying the bills and were taking the boxes with them. Turns out after a year, people had to wait for service because so many boxes were stolen that United Cable had to order a couple of tractor trailers full of converter boxes. They had a VERY HIGH number of deadbeats not paying for cable and many times, one person would order it for their house and splice it to a few other houses on the block.

As for Councilman William H. Cole IV, he lives in Otterbien. That area is yuppie-ville and they complain all the time. High priced housing surrounded by trash. They need to be more worried about the crime and the massive $120 million deficit they managed to get themselves into than worrying about why Verizon won't deploy to the city.

Silver_2000
Premium Member
join:2005-12-12
Carrollton, TX

Silver_2000

Premium Member

no growth = continued decline

Its safe to assume that with no FIOS growth the Support, billing and infrastructure will continue its downward spiral into the sewer. With no growth there will be no $$ to spend on improvements