Verizon CTO Gives FiOS Update (VZ)

Mar. 2.06 | About: Verizon Communications (VZ)

The Optical Keyhole posted the full text of an interview with Mark Wegleitner, SVP - Technology and CTO at Verizon.

I was hoping for a little more, perhaps something that elaborated on exactly how Verizon is driving down the deployment cost of FiOS to a residence from $2600 to $1605 a user (Figures include cost to pass + cost to connect prem). This is incredible, but also unbelievable considering labor is the dominant input.

Mark re-iterated the 20% FiOS-TV penetration rate in Keller, TX. Charter indicates they have lost 4%. This is over a 3-month period, with heavy promotion from Verizon and word of mouth marketing from residents. No clarification on what the measurement discrepancy might be. Verizon is probably using the metric that 1 out of 5 FiOS data customers now gets TV, and Charter shows that as 4% of their overall number. Gotta love that marketing BS!

In one section Mark explains why Verizon is doing fiber now, and not five years ago. He provides three reasons:

  1. Hardware Cost of B-PON was attractive
  2. Strong belief that demand for high-bit rate services would arrive shortly
  3. Removal of regulatory restrictions on local loop unbundling

Of the three, it’s clear to me that #3 was the big one. He also sheds some light on deployment problems, though he doesn’t mention the issues with the Motorola OLT’s.

Addressing this question in more detail, there have been components, both active and passive, in the platform, that have required reworking. Issues have included problems such as water leakage over time, leading to instances where a passive component has had to be changed for a different model. Typically, these components are tested prior to massive deployment and this has not proved a major difficulty. All issues with equipment have been addressed in collaboration with the suppliers.

Among the lessons that have been learned are relatively minor things such as adding pigtails onto units prior to field installation to speed deployment.

As the rollout has progressed, minor problems have occasionally arisen relating to installed infrastructure, usually when the plant configuration is not exactly as expected. These issues are generally resolved by entering the appropriate changes into the OSS solution.

Getting thousands of field techs of the learning curve and getting the infrastructure stable is a very big barrier to entry. If Coax runs out of headroom, just like voice pairs did, it will take time for the cablecos to replicate this effort.

Finally, he uses the terrible term “Quadruple Play” to describe a very important Telco competitive advantage.

As a traditional telco, how does Verizon differentiate its broadband offering from that of the cable companies with respect to the consumer, ignoring the technological aspects?

MW: Both the telcos and cable operators are now heading toward the delivery of a triple play of services - voice, data and video. Verizon has a key advantage over the cable companies in this respect in that it can potentially offer a quadruple play of services by adding wireless service to the mix.

All in all not the most revealing interview, but it’s a slow news day.