Verizon counting on FiOS tech advantage

The way Verizon sees it, the market for pay TV and online music and gaming adds up to $120 billion per year, or about $29 billion worth of opportunity within the geographic footprint the company serves.

That's a lot of incentive to drive Verizon's FiOS fiber-to-the-home initiative, on which the company has spent $2 billion to date. The investment has pushed fiber past 3 million homes and businesses - out of a total of 30 million customers - and the company intends to double that this year.

During a recent tour of Verizon's FiOS development labs in Waltham, Mass., Greg Evans, vice president of Services and Access Technology, said the company is counting on technology and service advantages to win customers.

Cable TV providers, he said, typically have a 860-MHz channel to serve each house, and have to divvy up that capacity if they want to add services such as video on demand, Internet access and VoIP. Verizon delivers three wavelengths of light to each house: a 860-MHz video channel; a 622Mbps channel for voice, data and video on demand; and a 155Mbps return channel for voice and data (the 622M and 155Mbps channels are shared by up to 32 households).

Using different channels means Verizon can more readily accommodate changing demands without sacrificing one option to offer another, Evans said. Verizon anticipates a day when households will consume up to 100Mbps of traffic with multiple channels of streaming high definition TV and conferencing, multiple channels of audio and Web surfing.

Technologies that some CATV providers are pursuing, such as fiber to the curb or node, are more limited, he said. "We didn't want to have to put the shovel in the ground twice."

Verizon is offering video in only three communities in three states - Texas, Florida and Virginia - but is fighting at the federal, state and community levels for more franchise rights.

The plan is to offer 300 channels and 1,800 videos on demand, said Verizon's Joe Ambeault. Twenty-four channels of basic analog or digital service will start at about $12.95 per month. "We'll offer more channels, more choices, better value, but won't necessarily always be cheaper," he said.

Most of that "better value" is still in development in the labs. For example, during the tour the company demonstrated a prototype fantasy football service that would enable customers to set up a team on a PC and then pull up their roster on TV while watching a game to check on the latest stats.

Whether Verizon has the best consumer answer or not, it is heartening to see this kind of investment in core infrastructure. The nation needs it.

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Copyright © 2006 IDG Communications, Inc.