VZ: Strike Caused Backlog of 100K FiOS Orders

Leading off today: Verizon Communications Inc. (NYSE: VZ) feels the effects of a double-whammy in the eastern U.S.

  • Verizon said the two-week union strike on the East Coast resulted in a backlog of more than 100,000 FiOS orders by the time about 45,000 striking workers returned to work. The telco also noted that Hurricane Irene and Tropical Storm Lee caused trouble reports to spike three times the normal level in areas affected by the storms, but expects them to return to normal levels in about two weeks. (See Verizon Workers Return Without Contract and Verizon Strike Gets Uglier.)

  • The Federal Communications Commission (FCC) 's network neutrality rules cleared a final regulatory hurdle late on Friday after getting the OK from The Office of Management and Budget, reports the National Journal. The sign-off means the rules could take effect in about two months, but they still face the specter of carrier-led lawsuits. (See House Shoots Down Net Neutrality Rules and Court Tosses Out Net Neutrality Challenge .)

  • Google (Nasdaq: GOOG) has hired Rachel Hack, president of the financially troubled Software & Information Technology Association of Kansas, as the community manager to handle "grassroots" marketing and other local activities for Google's 1-Gig fiber deployment in Kansas City, Kan., and Kansas City, Mo. (See Google to Plant More Kansas City Fiber.)

  • The opening Sunday for the streaming version of DirecTV Group Inc. (NYSE: DTV)'s pricey NFL Sunday Ticket package bombed in the early going, with users reporting that their video was stuttering or freezing up. Some consumers are paying a tidy $340 for the broadband-only version offered to those who can't access the DirecTV service (because of line-of-site issues, for example). A DirecTV official told Light Reading Cable that the company is still investigating the cause of the problem "and we're working hard to make sure our customers have a better experience on Sunday." (See PlayStation 3 to Stream NFL Games Over the Top .)

  • Liberty Global Inc. (Nasdaq: LBTY) has all but given up on trying to acquire Ziggo B.V. and combining it with UPC Nederland, because the Netherlands's largest MSO is intent on moving forward on an IPO, company CEO Mike Fries told Het Financieele Dagblad.

  • Germany's largest MSO, Kabel Deutschland GmbH , now markets its 100Mbit/s wideband service to 7.2 million homes (about 82 percent of its service footprint) after extending its Docsis 3.0 platform to another 315,000 in the cities and surrounding areas of Goettingen, Peine and Wolfsburg in the Federal State of Lower-Saxony, as well as Rostock in Mecklenburg-Western Pomerania.

  • Liberty Global has tapped Kit Digital to design, build and host the MSO's IP-based video-on-demand and live streaming service announced at IBC. Comcast Corp. (Nasdaq: CMCSA, CMCSK)-owned thePlatform Inc. , once rumored to be an acquisition target of Kit Digital's, is handling video content management for Liberty's new service. (See Liberty Global Takes TV Everywhere to Europe and thePlatform Squelches Buyout Rumor.)

    — Jeff Baumgartner, Site Editor, Light Reading Cable

  • Jeff Baumgartner 12/5/2012 | 4:54:03 PM
    re: VZ: Strike Caused Backlog of 100K FiOS Orders

    Perhaps we'll know more when VZ issues earnings, but I'm curious to know (we'll ask) how long the company thinks it will take to get caught up on the backlog and how many customers will give up and stay with their current provider if VZ can't get to them within the month. Given the circumstances, how long would you be willing to wait before you threw in the towel on FiOS? JB



    Duh! 12/5/2012 | 4:54:01 PM
    re: VZ: Strike Caused Backlog of 100K FiOS Orders

    I'm wondering the same things.  FiOS is a superior experience, and a great brand... but I honestly don't know what I'd do if I were moving into a new place and it was backordered.   Something tells me that the installers aren't at their most productive right now, either. 

    The strike is looking more and more like a lose-lose proposition.  More so for VZ than for the union.  Particularly after Irene served as a reminder of exactly how dependent VZ is on their techs and call center staff.  VZ came out of the storm recovery looking pretty competent, relative to most of the electric utilities - and it doesn't take too much reminding that the same folks who were restoring service had been walking a picket line a couple of weeks before. 

    That also leads back to the apparent change in wireline strategy.  Old strategy would have scrapped the copper plant before end-of-life, reduced union workforce through buy-outs and attrition,  and upped the skill sets of the ones remaining.  That depended on rolling FiOS out to the entire footprint.  New strategy is not so clear.

    I still think LR ought to try to score an interview with McAdam or  Ruesterholz.

    paolo.franzoi 12/5/2012 | 4:53:58 PM
    re: VZ: Strike Caused Backlog of 100K FiOS Orders

    We used to have guys do ride alongs with Vz Techs sometimes when FiOS was in its first couple of years.  Verizon was always pushing us to figure out ways of reducing install time (and thus costs).  What we found was that the techs LIKED slow installations - especially those that "forced" them to use OT.  More than once our guys were told to go away when they asked to stay during after hours of installations.  To be blunt, the union workers were always against rapid FiOS installations and worked slow on purpose - even when Vz and the Union were supposedly making nice.



    ^Eagle^ 12/5/2012 | 4:53:51 PM
    re: VZ: Strike Caused Backlog of 100K FiOS Orders

    So, let me get this straight.  VZ states that they are back ordered on 100k subs for FIOS after a strike of about 10days (it was less than 2 weeks total).

    So, 100k subs in 10 days should equal about 300k subs in a month of work.  To be generous, lets say 200k subs in a month.  x 12 months and we are talking 2.4 Million subs iinstalled and turned up in one year.  

    Does anyone know if VZ really turns up 2.4M subs in one year? I have to go look at what the installed base is today.  Not the "homes passed" but the fully installed base.

    Anyone know of the top what the total subs are?

    And, further, what is the real capacity of VZ to install FIOS subs?  

    something about that 100k number is nagging at me and doesn't seem quite right.  But not sure what about it is bothering me.

    is the VZ install run rate really at that level?  or more? or less?

    curious minds want to know



    Jeff Baumgartner 12/5/2012 | 4:53:47 PM
    re: VZ: Strike Caused Backlog of 100K FiOS Orders

    Interesting point. Makes me wonder how they are defining "orders." Is it only new subs, or does this include new set-tops and services for existing FiOS subs that also require a visit?  Another one to run by them.  In the meantime, VZ is only saying that they are working to reduce that backlog number each day and doesn't have an estimate on when it will whittle it down to nothing. But they are trying to give a more specific estimate on that. JB


    paolo.franzoi 12/5/2012 | 4:53:47 PM
    re: VZ: Strike Caused Backlog of 100K FiOS Orders


    I do not know about now, but at the peak we were working with them we were doing 10K customers a day.  And by that was brand new installs a day.  Now realistically have 20 days a month not 30.




    Jeff Baumgartner 12/5/2012 | 4:53:43 PM
    re: VZ: Strike Caused Backlog of 100K FiOS Orders

    VZ dropped us a line to mention that CFO Fran Shammo, speaking at the Bank of America Corp. conference in Calif., said clearing the 100K FiOS order backlog would be alon the line of 90-100 days, and that customers are keeping their orders.

    But the storm and strike are going to be costly, as VZ also estimates that the costs from those events will cost as much as $250 million this quarter. JB


    ^Eagle^ 12/5/2012 | 4:53:40 PM
    re: VZ: Strike Caused Backlog of 100K FiOS Orders


    indeed, only 20 working days per month.  Hence my willingness for the discussion to say that if 100k installs were for the 10 day period of the strike, then 200k was probably the right number to play with for a month.

    if back "in the day" it was 10k installs per day, then the install rate has really not slowed, nor accelerated over the intervening years.

    10k per day x 20 days is 200k installs per month.  Pretty much the same run rate.

    By now, this many years into FIOS, I was expecting to see some change.  Either acceleration of uptake by subscribers so higher install numbers, or a slowing of uptake and therefore lower numbers.  

    Kind of interesting that the install rate is virtually the same as it was those years ago when you were directly involved.


    paolo.franzoi 12/5/2012 | 4:53:40 PM
    re: VZ: Strike Caused Backlog of 100K FiOS Orders


    The limiting factor in installs per day were the number of people that did installs and the time to do installs.

    The ONT itself we got down to a very fast time.  The big issues were always inside the home.  Challenges included poor cable quality (coax and phone) but even worse PC issues.

    In other threads, I have talked about the idea that FiOS consumers (in the day) wanted to see the 15 Mb/s that they signed up for.  Lots of times this meant cleaning up their PC's config and getting rid of spyware and malware.  Once that was done, then the speeds were generally good to go.

    There was lots of discussion as well around the deployment of video and STBs.  They ended up having to rehab a significant amount of the coax plant inside the home.  Remember they went to MOCA as an in-home transport.

    We could tell when they would bring on a new set of installers or start in a new region.  You could see the installation trouble rate skyrocket and then slowly decline back to normal.


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