Once a media darling and a highly anticipated addition to Verizon Communication’s services, FiOS (which stands for Fiber Optic Service) is apparently giving Verizon significant pause; Verizon plans to scale back future rollouts of FiOS, and only plans to complete FiOS to any area that has already been promised service. Specifically, it would focus on Philadelphia, New York City, and Washington, DC, but other cities that were once on the schedule, like Boston and Baltimore, are no longer slated to get FiOS at anytime in the near future. The hold is indefinite, and may be permanent.
Why the rollback?
Just a few years ago, Verizon had lofty plans for FiOS. And true to its word, Verizon has spent billions of dollars on the effort to do so. Nonetheless, it appears that that rollout has significantly slowed if not stopped outright. Several cities, like the aforementioned Baltimore, Maryland are “on hold indefinitely.”
Why? The worsening economy appears to have put a damper on things. Although stimulus funds could potentially have helped Verizon, it’s reported that they didn’t apply for any funds during the first round of payouts, and will not be expected to apply for any funds when there’s another disbursement, either. Applications for the second round of funds will be made available in the next few weeks, and it remains to be seen if Verizon will apply for funds then. As yet, Verizon hasn’t commented (despite requests) on how many of their current DSL subscribers will get FiOS.
What about Universal Service funding?
Verizon may get Universal Service funding, especially if the FCC is successful in its bid to put broadband in every home. However, the FCC wants to focus on areas that don’t already have broadband, and Verizon’s traditional focus with FiOS has been to try to put it in places where broadband already exists — to beat the competition, rather than to give customers “first access” to broadband.
Verizon’s fine print
What many currently “in the wings” cities may not realize is that even though they may have signed citywide franchise agreements with Verizon to get FiOS there, those agreements have fine print that will allow Verizon to completely back out of its promises for that agreement unless television service adoption rates, too, hit requisite levels for the company. That means that even though the city may be waiting for FiOS, if their television subscription service rates with Verizon don’t meet Verizon’s requirement, Verizon doesn’t have to honor those agreements.
Verizon’s “no comment”?
Verizon has been notoriously tightlipped about this apparent freeze, but Bill Kula, Director of Media Relations, has finally tried to say something, even if it’s not much. On Verizon’s “At Home blog, he states, “As we move forward this year, we’re focusing on building our fiber-based network and increasing FiOS availability in those areas where we already have video franchises in place.” That jibes with what’s previously been reported, and apparently deals, if not a deathblow, at least a significant blow, to Verizon’s future plans to rollout FiOS for the rest of the country.
Verizon has further tried to spin things positively by simply putting out press that it has “nearly finished building its FiOS network,” and that it will now expand its customer base.
As stated previously, Verizon remains tightlipped about what truly are its future plans for FiOS, so there is a lot to be said as yet. It states that it is quickly approaching its initial goal to pass 18 million homes and about 70% of its original customer footprint by the end of 2010, which sounds good on paper. At the same time, though, it says that it’s “taking a breather from construction,” and that the network’s building phase is essentially going to be finished. This essentially leaves many customers previously promised FiOS without any hope of getting it.
So is FiOS dead, or at least in a long-term coma? Perhaps — especially if the FCC’s push to get broadband into every home is successful, and Verizon doesn’t change its tactics from focusing on beating the competition to simply providing first access to customers who don’t already have broadband.