Is FiOS a Budget-Buster?

Carl Weinschenk

The first thing to realize about this piece, which claims to offer inside and non-too-flattering information about Verizon's FiOS project, is that it comes from Cable Digital News. The site started out and remains -- despite a change in ownership -- cable-oriented, as its name implies. That's not to suggest that the information is not accurate. It's simply that the source should be noted.


That said, this is pretty damning stuff. The writer, who claims to have been on a call with a Verizon insider, says the carrier spent a whopping $1,595 per home connection as of the end of 2006. The explanation is a bit vague, but the writer makes a distinction between how cable operators and telephone companies gauge expenditures, and claims that the true measure Verizon's outlays is a combination of fixed and variable costs. Cable has an advantage on costs because more of its infrastructure is shared in neighborhoods, while Verizon's deployment is based on bringing fiber a longer distance to each customer premise.


The second point is that union recalcitrance in the east is leading to install times that are more than double those experienced in non-unionized areas out west (nine hours versus four hours). The union workers supposedly are upset that one technician is expected to do a FiOS install, while four were called on for plain old telephone system (POTS) hookups.


Finally, the writer says the problem reports were about equal for FiOS compared to older copper hookups. This is counter to Verizon's assessments that FiOS is vastly more reliable. FiOS' superiority may be true of outside plant, but computer problems in the home result in unhappy customers and busy contact centers regardless of the fact that the telcos generally aren't at fault. The problems are exacerbated as the promised speeds increase. The writer rightly points out that this is a problem with which cable operators must also contend.


The bottom line is that it's big news if FiOS costs are higher than analysts realize. If there really is a different set of variables -- a set that is more difficult to sustain -- the project could be in trouble. Less dramatically, but no less significantly, significant changes in perceived costs could affect which type of fiber rollout telcos end up favoring.

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Jun 12, 2007 4:06 PM yadayada yadayada  says:
Fools! Union people are denying the inevitable. Once FTTP is installed, they are not needed....period. Some of the installs are actually taking 12 hours in some NE locations. The union pukes in these areas will soon be getting their paychecks with Fairpoint on them instead of Verizon. I am always amazed at how incredibly naive union people can be. Time to get retrained in a marketable skill. Copper is dead.With DSL bonding, in a perfect world, the best you will get on copper is 20 - 26 MBPS. A high-def channel requires 19.4 MBPS, can you not do the math? Go to Sam's Club or Costco and see how many people are buying high-def TVs! Reply
Sep 12, 2007 7:46 PM JessWonderin JessWonderin  says:
What's with the Union bashing? Think about 40 hour weeks, overtime, a decent living wage, 2 weeks vacation, health care, worker safety . . . things that WalMart style management wouldn't "give" but "some Union" fought for. And think about the benifit "off shore out sourcing" has done to the IT community . . . want to "bash" something? Why not ask why America has the SLOWEST and most expensive data transmission system in the industrial world . . . a Japanese, Chinese, Korean or European would laugh at what we tout as "high speed access" and coverage - tell Pao his cell phone/internet devices will be slower AND will cost $600 a month, with more dropped calls than a blind juggler in a hurricane . . . yea, and you go after the worker . . . Reply
Nov 17, 2007 10:08 AM Phybercide Phybercide  says:
I was a former Fios employee who left there partly due to the constant conflicts between union and management. My conclusion is this: Unions encourage laziness and allow incompetance to not only endure, but to flourish. Unions take the idea of merit based promotions and turn it into seniority based so that even if u are braindead, as long as you have seniority u have a job no matter the quality of work, just show up on time they tell you. Management is just as bad, spying, humiliating people, playing favorites like a highschool clique. You wanna get a promotion to management? With some exceptions, have to throw ethics out the window and be prepared to snuggle up to alot of senior management in more ways than one. I should write a book about Fios behing the scenes Reply

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