Fiber showdown looms as Verizon builds in AT&T territory

Verizon is setting up a Wild West-style telecom showdown by expanding its FiOS network further into territory traditionally held by rival AT&T, says a new report from Information Gatekeepers.

According to IGI, a telecom consulting firm, Verizon's recent FiOS expansion into areas of northern Texas could mark the first time that one carrier has directly competed with another in its own franchised territory for residential wireline Internet services. Traditionally, Verizon and AT&T have competed with each other primarily for wireless voice and data services, as the companies' landline businesses have been dependent on architecture that each company has purchased over the years from the original "Baby Bell" companies formed in the wake of AT&T's breakup in 1984.

But with Verizon now offering video, voice and data services over its fiber-optic network in AT&T’s home state, IGI says that the telecom industry could be "drastically" changed. In particular, IGI says that Verizon's decision to "overbuild" its facilities into AT&T's franchise areas could spark AT&T to begin overbuilding as well, thus turning competition for building out services into a potential "nationwide phenomenon."

Telcos such as AT&T and Verizon in recent years have been aggressively promoting, respectively, their U-Verse and FiOS services as alternatives to traditional cable television and Internet. A report issued in early 2008 by IGI projected that telcos will be able to match the total number of high-speed accesses offered by cable companies by 2011. For their part, cable companies have tried to move more into wireless data services by investing in Clearwire's plan to build out a nationwide mobile WiMAX network.