The politics of Verizon FIOS

Four, count em, four Verizon trucks are on my tiny four house street running fiber to my home and three others, suggesting FIOS and at long last, competition for Comcast might be materializing on my end of town. by John Dodge
Written by John Dodge, Contributor

Four, count em, four Verizon trucks are on my tiny four-house street running fiber to my home and the others, suggesting FIOS and at long last, competition to Comcast might be materializing on my end of town.

For months, I've tried to dig into FIOS' ETA, usually with a lineman working on the street. Several months ago, Verizon trucks showed up to pull fiber underground and the workers said the service would be here by Fall. Then a story ran in the local newspaper, cryptically saying Verizon was not going to install FIOS in  communities in Massachusetts with which it does not already have an agreement or a capital investment.

My location puts me at the end of town which does not have FIOS and whose Verizon infrastructure is tied into the adjacent community that was just informed `no FIOS for now.' My assumption that my home would not get FIOS was wrong and we are getting it as spelled out and timed by the contract my community signed with Verizon.

The confusion prompted me to call Verizon spokesman Phil Santoro to find out how FIOS comes to town. It's the same process that Comcast went through years ago.

In Massachusetts, Verizon negotiates town by town and city by city, usually with a voluntary cable TV commission set up by the municipality's government. For the rights to fiber up a community with FIOS, Verizon pays backs up to 5 per cent of local FIOS revenues and makes a capital contribution toward local programming.

Now, here's where it gets sticky. Negotiating can take from six months to three years which leaves consumers in the dark about when FIOS might come to their community. As it turns out, my community, 75 per cent of which is already served by FIOS, has an agreement. The city next door getting the cold shoulder  doesn't.

"We have to work with voluntary cable commissions so it’s not a full time job for them. It takes some time which is not necessary because all the 100 contracts we have in Massachusetts look the same," Santoro explained, adding that Verizon prefers sweeping statewide agreements like Santoro says it has already with 20 states. Verizon tried to get Massachusetts to go statewide a few years ago and failed, he added.

"The problem in Massachusetts is that consumers don't know when they will get FIOS and neither do we," Santoro said.

Indeed, Verizon's decision to delay more communities in Massachusetts infuriated Boston Mayor Thomas Menino who last month claimed the company was exacting "payback" for his attempts to reverse a state law that would allow the city to tax Verizon's switches, lines and other equipment.

Santoro's denied that politics plays a role in which communities get FIOS which I have a hard time swallowing, but here's what he said.

"That’s some people interpretation, but we are nearing completion of our project. We budgeted $23 billion five years to complete the project and get FIOS into 17 million homes by 2010," he said, adding it's in 9 million homes with 25 per cent penetration or 2.5 million customers.

With a $23 billion investment at stake, politics almost certainly plays both internally to Verizon and externally to the communities it serves...or could serve. Boston has one of the most technically savvy, educated and affluent populations in the country. I find it ironic that it is one of two cities that Verizon has chosen to test out it's 4G wireless network and yet it still does not have FIOS.

One answer is Boston has played hard-nosed politics and been unable to hammer out a deal with Verizon.

"I won’t speak to Menino’s comments (Santoro was quoted in a July 16 Boston Globe blog post as "expressing bewilderment" at Menino's comments and denying the decision was tied to the tax issue). Quite frankly, it's a good, hard-nosed business decision. We have no plans to bring FIOS to Boston just like a lot of cities in the U.S," he said.

Does this sound like politics? I suspect so, but judge for yourself.

I guess I will be one of the lucky ones to get FIOS which has Comcast cutting consumers' bills and running scared when the F subject comes up. Competition is such a good thing. It's almost lunchtime. The trucks are leaving and so am I.

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This post was originally published on Smartplanet.com

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