Verizon hits hurdles over fiber network

In spite of investing a large part of its resources and attention, Verizon's fiber roll out is facing some hurdles--the operator landed only 44 approvals (only about half the target) last year to offer TV service, is facing challenges digging up lawns and has already spent millions of dollars on lawyers to woo local officials. The recent AT&T-BellSouth acquisition is bound to add new pressure.

AT&T is rolling out triple play services using the cheaper FTTN method, spending roughly $5 billion through 2008 to reach 18 million homes with its fiber project, while Verizon's program eventually could cost as much as $20 billion. The operator has scaled back its FTTH plans and will use coaxial cable for the last few feet into customers' homes. This saves more than an hour on the usual six-hour installation and money. Verizon vice chairman Larry Babbio expects the cost of connecting individual homes with fiber to fall to $890 a home from the $1,400 a home it spent in January 2005.

So far, Verizon has brought fiber to more than 3 million homes and expects to add another 3 million by the end of this year. It has permission from local authorities to offer television service to 1.3 million people. However, only a fraction of those homes subscribe to the service. The operator did not give raises to many top executives last year, has frozen pensions for managers and is offering lower bonuses. The company says the cuts aren't connected to its fiber plans. I wonder if the recent AT&T-BellSouth merger triggers Verizon to do some additional mergers (after MCI) to increase its footprint and be in the competition.

For more on this:
- read The Wall Street Journal's article

PLUS: Following video franchising grants, Verizon makes FiOS TV available to 80,000 customers in Murrieta, CA, and 33,000 customers in Hillsborough, FL. Release (CA) | Release (FL)

ALSO: Verizon plans to aggressively market its FiOS service to MDUs this year. Release