The assumption always has been that it's the cable operators versus the phone companies. In a majority of cases, that's held true. But it isn't a given, since a company's due diligence involves going after any competitor if it makes sense -- even if the target is an industry comrade.
This OneTRAK story says Verizon has begun overbuilding -- setting up competitive service -- in Dallas communities already served by AT&T's U-verse fiber systems. Specifically, the company is building northward from Plano into Frisco and Allen. The writer says that such a strategy could be particularly relevant in Florida, California, Indiana, Washington and Oregon, in addition to Texas. These are states where Verizon operates inside areas also served by AT&T and Qwest.
Traditionally, overbuilders entered markets with only one incumbent. In taking on both AT&T and the incumbent cable operator, Verizon in essence is saying that the emergence of the triple play combining voice, video and data has changed the equation.
A Telecompetitor blogger raises two good points in reaction to the OneTRAK piece. He suggests that AT&T could act preemptively. This could set off a telco versus telco war. The writer also points out that such scenarios are more likely as the number of states that grant statewide franchises increases.
Going after two other providers is a sign of success and confidence. And that's not the only one for FiOS. Reuters reports that the company said it may expand on the initial goals for the platform. The target was passing -- not necessarily serving -- 18 million homes by the end of 2010. President and COO Denny Strigl now says the company may be more aggressive, and this could be done without greatly increasing the $20 billion the company has already committed to the project.
One of the key competitive tests in the near future for FiOS and its competitors will be in New York City, the nation's biggest television market. Later this year, Verizon will begin offering FiOS in the Big Apple -- and take on Time Warner Cable in four of the five boroughs (the Bronx is served by Cablevision). New York City, with 1.4 million subscribers, is Time Warner Cable's biggest market after Los Angeles. This Multichannel News story focuses on how TWC is preparing: It will increase the number of high-definition television channels and offer a price lock in and its Start Over service, which provides some VCR-like capabilities to digital programming.
In still another sign that Verizon considers FiOS to be its future, the company is working to bring the essential platform to businesses. Network World describes the company's two years of work with Science Applications International Corp. (SAIC). The service will be offered next year to the federal, corporate and university sectors. The initial implementation of the passive optical network approach is an office building in Annapolis Junction, Md., which will be ready for occupancy in September. Verizon says it can cut floor space and electricity usage by up to 95 percent compared to copper. The story features a graphic on how the fiber-to-the-desktop system is configured.
All indications are that FiOS is thriving. The most intriguing, but by no means the only, answer to how it will harness that momentum is by making a play for subscribers now served by other telcos.