If Everyone Had Verizon FiOS for Broadband, Capping Would Not Be an Issue

For over four years now I've been a happy customer of Verizon's (VZ) for its FiOS broadband service, deployed to my home. In that time, I'd be hard pressed to find any other technology product that has made as bigger of an impact on my consumption of online video. For all the talk of capping by ISPs and throttling of bandwidth, I can't help but think that none of this would be an issue if everyone had the ability to get Verizon's FiOS service. Last year I wrote said that "Verizon's FiOS Service Will Change The Game For Video Delivery" and I think it already has.

Whenever discussions take place about ISPs capping users, it's always from ISPs and networks that have broadband services that were not built to truly handle video. Comcast (CMCSA) and others never anticipated that their network would have to scale as quick as is now required or have to carry as much video as they are today. Verizon's FiOS service was built for video from day one, with a focus on pushing as many high-quality bits as possible directly over fiber.

Five years ago I had a 10MB connection and since then, Verizon has upgraded the speed to 20MB at no additional cost. I pay Verizon $95.99 a month for broadband, TV and phone combined and would never think of cutting my service. You see lots of folks talking about cutting cable and using the Internet for watching videos but I have to wonder, are any of these folks paying for TV and Internet from the same company? Because if you are, then your TV service is not $75 a month with the discount you get for multiple services. With FiOS, I think paying what averages out to be $32 per service, per month is quite fair.

I know that many folks can't get FiOS where they live so it's not an option for them today. But as Verizon continues to get more and more customers each quarter and as more competitive services like AT&T's (T) U-verse get adopted, the whole debate of capping users should not be a big deal in a couple of years. Right now, many want to get upset over the capping that ISPs are doing but I have yet to hear one person who is complaining because they have gone over their cap. In addition, many of the ISPs have said that they will raise the caps over time as the market demand increases. I also wonder how many of those users complaining about capping can get FiOS but haven't. If they can get it but haven't, then why are they complaining about capping?

I've been writing about FiOS for a few years and still, the service amazes me. I've never had a single outage, the quality of the TV signal beats any cable company hands down and believe it or not, the support Verizon provides for FiOS is excellent. You don't get some phone company tech person on the line, you get someone from the FiOS group who knows the hardware, the service and even how it works with Mac users. It's no wonder Verizon continues to see good subscriber growth quarter after quarter.

For all the talk of how far behind the U.S. is with broadband, I think a lot of that is hype. The average broadband speed in the U.S. is 3.2Mbps. That's not slow and while it's not enough to stream HD movies to the TV, no one has a content service today that has a real business model to even support it. The problem is not the technology or the infrastructure, it's the business model. If we use the average broadband speed of 3.2Mbps, it means every content owner could encode their content for at least 2Mbps. So why aren't they? Simple, the business model does not work. Blame the business model, not the broadband infrastructure.

The bottom line is that FiOS is a product we've been waiting on for years and for many, it is here today. The service works as advertised, it's affordable, and it has no limitations. Not to mention, while I have the 20Mbps package, it's capable of up to 50Mbps if you want to spend more money or need it for a business location.

For those that can't get FiOS in their area, I feel for you. But keep in mind one of the biggest hurdles Verizon has faced in its expansion is from the cable companies who have tried to do everything in their power to make it hard for Verizon; clear proof that the service really is that much better than what the cable companies offer. As Verizon continues to win more franchise licenses in more towns, FiOS will become available to a wider audience. When that time comes, get it, you won't be disappointed.

Disclosure: None

Comments

[JeremyF:]

Nice Verizon commercial

Mar 20 08:07 AM

[robert99:]

Verizon commercial or not, I appreciate the author's candor. I've been a Verizon cellular customer for years, and have never been disappointed with their service. I've been considering buying VZ lately, and if I get another chance in the low 20's, I will probably take it.

Mar 20 08:18 AM

[JayS:]

The "Capping" issue is not always about the "last mile" or so, which is where Verizon FiOS has a speed advantage. It is also about the "backbone", the network(s) used to transport EVERYONE'S data from where the content resides, through various routers across the country, to your home or business. Verizon has NO advantage there. Those networks also require upgrades as Internet traffic grows, and those upgrades are not free. Unless the owners of those networks can recoup the costs, they will not be upgraded, and it won't matter that you can get 50Mbps locally, because you won't be getting 50Mbps of the backbone.

Mar 20 09:16 AM

[User 379866:]

Wait till he gets his bill when the promo ends. Paying $52 for Fios Internet Service does not make sense for customers that are not Power Users. I would say 80% of the public would rather pay $20 for 1 or 2 Mbps. service. The business case to put FIOS everywhere is going to drag the stock down.

Mar 20 10:21 AM

[NM:]

Dan, your reasoning is superficial and displays a real lack of understanding of the technologies involved. Who cares whether the last mile (last couple hundred yards in many cases) is fiber or coax? Both can stream video just fine. Comcast has the fastest backbone in the world. They're ready for IPTV now, and in vastly more markets.

Mar 20 11:44 AM

[telco joe:]

As one previous comment suggested, capping his little to nothing to do with the connection between your home and the ISP. It is all about the backbone and the $ to support/grow the backbone's capacity to accomodate, among other things, huge video downloads.

Mar 20 01:10 PM

[FIOS...right:]

Verizon has cherry picked markets across the country. When they actually provide coverage to a decent portion of the country then a comparison with cable will be justified. I live in a tier two market (only 500,000 people) and FIOS is not an option because Verizon has chosen not to offer service here. It has nothing to do with the evil cable companies making it "hard for Verizon".

I agree with the previous post, your reasoning is superficial.

Mar 20 01:15 PM

[Dan Rayburn:]

Yes, it's not just about the last end mile when it comes to capping, but many of you are suggesting that while the last mile is good, the rest of the Verizon network it's connected to is poor. That's not the case. Verizon's FiOS network is about a lot more than just the end mile to a house.

Verizon's network for the FiOS service is different than the rest of the Verizon network which is evident by the fact that Verizon is doing deals in the market to make delivering video content better specifically for FiOS customers. See: blog.streamingmedia.co...

Mar 20 05:25 PM

[Gaff:]

As you say it's great if you can get it, but for the majority of people like myself in more rural areas my chances of seeing something like FiOS or U-Verse here in the next 5 years are slim to none.

What incentive is there for either Verizon or AT&T to develop this in my (small) town? It's a town of 20,000, mostly computer-illiterate, people, and the costs involved for them to bring it here would not be recouped for years and years after deployment.

As I said, great if you can get it, but most people cannot. The combined footprint of FiOS and U-Verse is what, maybe 20-30% of the US? I'm pulling those numbers out of my ass since I don't have time to look, but I can't imagine they are that off. That would leave 70-80% unable to get it.

It's great to hear how good FiOS is, but to people like myself who will never see it here it's just background noise unfortunately.

Mar 20 06:34 PM

[Dan Rayburn:]

I feel for you Gaff. Like you say, will be hard for you to ever get the service.

Verizon expects to continue the FiOS build-out through 2010, when the company expects to have passed about 18 million homes. Combine that with some numbers from AT&T and it's about 27 million homes total.

A quick Google search on the number of homes in the U.S. is listed at around 160 million, a number given out by the Census Bureau. If that number is accurate and I have no idea if it is, then that means FiOS and U-verse combined would only reach about 17% of all the homes in the U.S., numbers even lower than your estimate. Not good news for folks like you.

Mar 20 09:29 PM

[Core:]

I look forward to Verizon's continual expansion, the main reason being, they are looking toward the future. And to me, that is very very important.

There saying "How can we serve our customers need's better" not like most ISP "how can we manage our customers better"

Two huge different trains of thoughts.. goals, whatever you may call it. And it really shows.

Mar 21 10:54 AM

[zeusling:]

The point of this article was what again?

Mar 21 11:11 AM

[vv1r3d:]

Capping is all about making more profit from doing less in a company.... THAT IS ALL!

Mar 21 11:45 AM

[nottrue:]

verizon has a huge advantage, they own a tier 1 bandwidth provider (formerly UUNET, not vzw business.)




On Mar 20 09:16 AM JayS wrote:

> The "Capping" issue is not always about the "last mile" or so, which
> is where Verizon FiOS has a speed advantage. It is also about the
> "backbone", the network(s) used to transport EVERYONE'S data from
> where the content resides, through various routers across the country,
> to your home or business. Verizon has NO advantage there. Those
> networks also require upgrades as Internet traffic grows, and those
> upgrades are not free. Unless the owners of those networks can recoup
> the costs, they will not be upgraded, and it won't matter that you
> can get 50Mbps locally, because you won't be getting 50Mbps of the
> backbone.

Mar 21 01:42 PM

[nottrue:]

cant seem to edit so ill embelish a bit, tier 1 networks are the backbone of the internet, beside verizon, other t1 network owners include at&t, savvis, level3, qwest, sprint, and a few others. the cable operators do not have the advantage of having t1 backbones under their control, so they have bottleneck last mile AND at the co


On Mar 21 01:42 PM nottrue wrote:

> verizon has a huge advantage, they own a tier 1 bandwidth provider
> (formerly UUNET, not vzw business.)
>
>

Mar 21 01:45 PM

[DocDoom777:]

There are those of us who have and will always have exactly one broadband option: satellite. I'm on HughesNet because the only other option is 26.4 Kbps dialup. FIOS? Hell, I'd kill the person of one's choice for DSL, let alone cable or FIOS.

For all the BS out of DC re rural broadband, there are millions of us who will not see even DSL until a week after Martians invade Earth. That's just the way it is in the real world. And the Internet will become less and less accessible to us as sites assume that everyone who is anybody has fast broadband.

There are broadband haves and have-nots. Those of us who live where there are actually trees to look at will forever be have-nots. C'est la vie.

Mar 21 04:50 PM

[Jeff Stannard:]

I live so far out in the country (yet only a mile from the Hudson River), I had to read this article to learn what VZ FiOS even was. DocDoom is 100% correct. I would love to see a federal rural braodband initiative, but the chances of true implementation are slim. We can get a cable line installed from TimeWarner if 20 of my neighbors each pay 3 grand to run the line down our road.

Mar 22 07:17 AM

[Mark Worth:]

There's no question that Verizon has many happy customers, you amongst them, but for a different point of view, I refer you to Basex' Jonathan Spira's Verizon FiOS Follies article (which can be found at www.basexblog.com/2009.../). I found his chronicle and analysis quite interesting to read.

Mar 22 10:26 AM

[Geddy:]

Then those people would choose that data rate & pay accordingly...what's the problem?


On Mar 20 10:21 AM User 379866 wrote:

> Wait till he gets his bill when the promo ends. Paying $52 for Fios
> Internet Service does not make sense for customers that are not Power
> Users. I would say 80% of the public would rather pay $20 for 1 or
> 2 Mbps. service. The business case to put FIOS everywhere is going
> to drag the stock down.

Mar 22 10:27 AM

[Geddy:]

And your point is....? Every carrier has the same issue; capacity blocks, you add more capacity...problem solved.


On Mar 20 09:16 AM JayS wrote:

> The "Capping" issue is not always about the "last mile" or so, which
> is where Verizon FiOS has a speed advantage. It is also about the
> "backbone", the network(s) used to transport EVERYONE'S data from
> where the content resides, through various routers across the country,
> to your home or business. Verizon has NO advantage there. Those networks
> also require upgrades as Internet traffic grows, and those upgrades
> are not free. Unless the owners of those networks can recoup the
> costs, they will not be upgraded, and it won't matter that you can
> get 50Mbps locally, because you won't be getting 50Mbps of the backbone.

Mar 22 10:28 AM

[wildbill448:]

Try living with a cable company that has a 40GB cap a month for their standard package. Then try living with a company that has service at 3MB/sec, but then be lucky to get 300kb/sec.

I AM COMPLAINING BECAUSE I HAVE GONE OVER MY CAP! I have to pay 20 bucks every 10GB I go over. I would be happy with Comcast's 250GB cap.

It's partially my fault, I choose to move from a big town to a more rural area, but I had no idea of how restricted I would be when it came to broadband. I live in a town with 30k+, but I cannot even get DSL where I am. So it's my bad cable company, dial-up or wireless which is capped at 5GB. I understand what you are trying to say in your article, but there are people out there that are living with a highly restrictive cap, and with no competition. I wish the stimulus money would help, but I am sure most of it will go to Verizon, and the like so they can continue their Fios push to the big cities.

Mar 23 10:34 AM

[tintoys:]

I'd sign up for FIOS in a minute if the service included MSNBC. The cable station list is almost endless, yet Verizon doesn't seem able to negotiate a deal to provide MSNBC...what gives?

Mar 23 05:11 PM

[Russell22:]

I think Verizon FiOS is already profitable with this product which is pretty amazing in how short a timeframe was needed to turn a profit. Capping should be a thing of the past. We are living in a world where people want unlimited features for a fixed fee. Web hosting has gone that route and so will ISPs hopefully.

Apr 07 11:49 PM

[hannahshaven:]

I thinks FiOS internet is really doing great so far with my experience on other internet providers. I would recommend FiOS internet to those who have it in their area. I disagree with the previous comment that says:

"capping his little to nothing to do with the connection between your home and the ISP. It is all about the backbone and the $ to support/grow the backbone's capacity to accommodate, among other things"

Sep 12 05:22 AM

[directcommu...:]

wish fios was in westchester

Nov 07 04:36 PM

[Dan Rayburn:]

It is in Westchester, in almost every town.

Nov 08 11:16 AM