Friday, October 12, 2007

Fios is catching on in Dallas and nationwide, Verizon exec says

More than 150,000 Dallas-area homes are now plugged into Verizon's fiber-optic Internet service, Verizon's chief technology officer said Wednesday

And more than 100,000 subscribe to the company's fiber-optic television service, Mark Wegleitner said in an interview after his keynote speech at the Telephony Live conference in Dallas.

"Things are going very well down here with Fios," Mr. Wegleitner said.

But while Fios got its start in the Dallas area – Keller, specifically – the technology is quickly spreading nationwide.

Roughly 9 million American households will be able to sign up for Fios by the end of the year, and that number is expected to double by 2011.

The service is available to about 400,000 homes in the Dallas area.

Verizon had about 1.1 million Fios Internet customers nationwide as of June 30, an increase of 203,000 since the first quarter of the year.

Fios TV customers totaled more than 515,000 at the end of June, an increase of 167,000.

Verizon also announced Wednesday that it has applied to make its video service available to an additional 15,000 homes in Far North Dallas and North Grand Prairie.

Fios is one of Verizon's biggest bets, as the company is investing nearly $23 billion between 2004 and 2010 in creating an ultrahigh-speed network that is designed to last two decades or more.

For example, some employees are already testing in their homes Fios connections with download at speeds as fast as 100 megabits per second, whereas most home broadband Internet connections in the U.S. now are 5 megabits per second or less.

And it's a bet that, so far, other television, telephone and Internet providers have declined to copy by building their own to-the-home fiber networks, although AT&T may be coming closest with its U-Verse system.

Mr. Wegleitner said the investment will pay off, though, and said Verizon expects to benefit from laying the groundwork for the bandwidth-intensive applications of the future, from high-definition video to playing massive, online video and computer games.

Here are some excerpts from the interview.

Why is Fios important to Verizon?

"The consumer area is extremely important to us. The movement of that market to broadband at the current rate is unprecedented. What we've done with Fios is build a vehicle out there where we can provide services to feed that hunger for those broadband applications.

"It's a platform on which we can provide any number of services in the voice, video, data and wireless domain. That's why we picked Fios. It was a tough decision, because it's a lot of money. But on the other hand, it's the platform that can take us into the next decade."

With the download speeds currently available on Fios, is the goal to make the Fios TV offering eventually a pure IPTV technology, where consumers can just download any show they want at any time rather than having to adhere to a network schedule?

"I may be a bit of a contrarian on this, because it's very easy to jump on the bandwagon and say it's all going to be viewing on demand and time-shifted programming. But the fact of the matter is, there are still two very important things out there today that do have a time component to them, and that's news and sports. So if you're going to do news and sports, you're probably into something akin to broadcasting.

"The other thing is, and this is where my contrarian side probably kicks in, I think there are social events built around TV. This is just a cultural thing. When you get to the office on Friday morning, there are a number of people who probably want to talk about the show right then. They saw it as soon as it was available, and they're excited about what happened, and they want to discuss it around the water cooler."

Right now, the fastest available Fios Internet connection is 50 megabits per second in some cities (30 megabits per second in the Dallas area). When will see 100-megabit-per-second connections?

"We're already testing 100-megabit-per-second service to a couple of employees. It works fine. It doesn't mean we're going to go there right away [as a commercial offering], because there aren't very many applications out there right now that could use 100 megabits per second. But the nice thing about this technology is it gives us the headroom for the things we see coming."

Will the average consumer ever need that kind of speed?

"I think we're already seeing a demand for speed that is certainly greater than DSL. Ultimately, we would see applications that would push DSL beyond the limit. Fios investment is a minimum of a 15-year investment. We put in a technology that has a 15, 20, 25 year life, because we've got a broad number of things to do."

Do you encourage software makers to make online applications that need that kind of speed, such as a high-definition video download service?

"We have conversations with hundreds of different companies that are specializing in certain areas, and a whole group that is multimedia applications and service focused. But frankly, I don't think they're going to need a lot of stimulus from us. There is an engine that runs, which is that if you put the device and the network in place, the applications will show up, and vice versa."

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