Baby Bells Advance Fiber Plans

Verizon today announced the next six states in its
aggressive fiber-to-the-premises rollout.

The carrier will deploy the infrastructure — which can deliver high-speed
data, voice and video — in communities in Delaware, Maryland,
Massachusetts, New York, Pennsylvania and Virginia. It’s already offered to
consumers and small and medium businesses in parts of California, Florida
and Texas.

In recent years, broadband industry watchers have included FTTP among a
litany of emerging technologies that could one day replace copper-based DSL
and cable modems.

A small number of independent carriers, housing developers and
public/private partnerships have led the pack. Large carriers, wary of the
costs of buying and installing miles of fiber-optic cable, have proceeded
cautiously — until now.

Verizon currently sells FiOS broadband Internet access services to its early
FTTP customers, but a compelling reason for deploying FTTP is to beat out
cable rivals like Comcast for bundled communications
services.

“We will have video next year,” Bob Ingalls, president of Verizon’s
retail markets, said during a news conference this afternoon.

Verizon is negotiating with programming companies for content packages and
also plans to use FTTP to deliver more advanced services, such as
video-on-demand and high-definition, Ingalls said. He declined
to discuss pricing.

The company also said it will hire between 3,000 and 5,000 new employees by
the end of 2005 to help build the network. This is a change for the sector,
which has been axing jobs to cut costs. In all, the company’s FTTP capital
investment will hit $800 million this year.

Meanwhile, SBC Communications is testing video through
fiber, its executives said today.

“We will begin to put video in the terrestrial network as soon as we have
pieces in place,” Ed Whitacre, SBC’s CEO, said in a third-quarter
conference call with analysts. “We will not wait until we have it all in
place.”

The Baby Bell will hold a news conference on Nov. 11 to provide more details
about its video initiative. Today’s news comes a week after an FCC ruling prompted
SBC to accelerate
its fiber plans.

SBC will continue to offer a bundle of services that include satellite TV
through the DISH network until the fiber is ready. About 100,000 subscribers
signed up for DISH service through SBC in the third quarter. And because SBC
is phasing in fiber, satellite is not being discontinued anytime soon.

“We will continue to market and sell the DISH product outside of that
[fiber] footprint,” Rick Linder, SBC’s CFO, said during the conference call.

Linder said the fiber plan won’t bump the company’s capital expense budget
this year, but could increase it up to 10 percent in the next fiscal year.

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