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Verizon is slowly but surely working to get FiOS into densely populated major cities
March 28, 2007
If you live in Verizon Communications Inc. (NYSE: VZ)'s footprint, a TV commercial asks why you'd consider hooking up a fancy new TV to an old-fashioned technology, like cable.
The simple answer: Sometimes cable's all you've got.
Residents of metropolitan New York, Boston, and other major cities in Verizon's footprint are still relying on cable as their only triple-play option. In New York, only Staten Island has widespread access to FiOS, and it's the least populated, most suburban of the five boroughs. And even there, FiOS is not available in most multi-dwelling units (MDUs), such as apartment complexes.
Getting FiOS into MDUs is crucial to Verizon's goal of being the No. 4 video provider in the country. MDUs make up 25 percent of the company's footprint -- a resource that will undoubtedly need to be tapped to achieve this goal. And making this happen is no easy task.
In suburban areas, Verizon can simply run the fiber lines past housing units, and when a customer subscribes to the service, a technician comes in and makes the connection. In these areas, Verizon can control its own destiny. To reach an MDU however, Verizon has been negotiating deals with the landlords of each building, one by one. (See Verizon Brings FiOS to Wall Street.)
Eric Cevis, vice president of Verizon Enhanced Communities, is largely responsible for negotiating these deals. "A lot of the deals that I am negotiating are seven-year deals. For example, we're negotiating now for one of the Trump properties," he says. In these newer developments, Verizon is also employing some aggressive marketing tactics. "We negotiate marketing rights. Once the facility is in, I have the right to be the only company marketing in that building," says Cevis.
In New York –- a mandatory access state -– Cevis cannot negotiate Verizon being the exclusive provider in any building, but he can be the only one advertising in a building. "Let competition prevail. When people see the product, it pretty much sells itself," he says.
In every single-dwelling home in which Verizon installs FiOS, an optical network terminal (ONT) is placed on or in the dwelling unit to connect the home to the network. In small, garden-style apartments and duplexes, Verizon has been successful doing the same thing. But in the Manhattan high rises, this is simply not feasible.
"We realize we can't pull fiber into the living unit every time," says Brian Whitton, executive director of Access Network Design and Integration with Verizon. In those cases, Verizon installs a special MDU ONT in the basement of the building that serves multiple units. The last few feet are usually covered by the building's coax wiring. In instances where this can't be done, Verizon uses VDSL.
How much the network performance is compromised depends on the unit's distance from the ONT and the type of wiring used. "We've done testing in the Empire State Building. With VDSL1, we can deliver 30 Mbit/s and with VDSL2 we can deliver 75 Mbit/s," says Whitton.
That's a good bit faster than what most consumers get today and, depending on Verizon's timing, the company might not feel too big a bandwidth pinch when high-rise dwellers start demanding multiple rooms of HDTV. "The general consensus is that bit rates of 1.5 Mbit/s for SDTV and 4 to 7 Mbit/s for HDTV would be achieved within 18 months to two years," writes Heavy Reading's Simon Stanley in his latest report. (See MPEG-4: DSL's HDTV Dilemma.)
As far as getting the actual fiber to each of the apartment buildings, Verizon doesn't anticipate that it'll be tearing apart Fifth Avenue, due to the massive network of conduits that already exists under the city streets.
Either way, getting FiOS into Manhattan and other densely populated places is going to take a lot of time. "I would give it a one- to three-year period to see the majority of New York covered," says Cevis.
— Raymond McConville, Reporter, Light Reading
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