Verizon’s High Fiber Diet

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Ivan no longer mourns the loss of copper customers.

Ivan Seidenberg, CEO Verizon Communications, indicated that at a recent Goldman Sachs investor conference (ironically, Goldman Sachs no longer mourns the loss of the mortgage industry either).

Ivan said trying to predict when the company will stop losing voice landlines “is like the dog chasing the bus.” Now Ivan intends to use that bus to run over the dog. That bus is called FiOS.

FiOS, the Verizon Fiber network that does coincidentally offer landlines, but more as a side dish. Video is the core product. Ivan evidently was present the day business school taught the classical example, had the railroads understood they were in the transportation industry, they would have morphed into airlines. Why be a phone company when you can be a video company? With that in mind, may as well sell off all those rural areas (in 14 states) that can’t be profitable in this model.

I don’t have access to FiOS. I hear it is quite nice. Verizon got a lot of crap from Wall St. for putting Fiber directly to the home, whereas other Bells were just putting fiber into neighborhoods and reusing existing copper for the last quarter mile.

My Qwest neighborhood recently did just that. We are about 5 miles from the central office, so DSL wasn’t even an option until they switched to fiber. As a Comcast customer I was anxious to see how this new service would compare. So I ordered Qwest DSL. The highest speed option was 1.5Mbps.

I talked to the Qwest installation tech and he confirmed I was on new fiber (from the pedestal to the house is copper and close to 1000 feet). Comcast is on Coax.

I switched between the connections and ran various speed tests. Everyone one of them, and every measure, Comcast kicked the proverbial dog’s arse over DSL. In some cases, the speed figures were double and the latency figures were half. Testing to Los Angeles, Comcast reported a download speed of 7481 Kbps with latency of 60 ms compared to Qwest’s 554 Kbps and a latency of 138 ms.

For VoIP, latency needs to be kept below 150 ms – but that includes total latency meaning the codecs and switching delays too.

So I think Ivan is on to something. Fiber to the home probably does make a lot of sense. Though I hate to see Theodore Vail’s dream (and reality) of universal service be turned into a cable company.

[I’m also concerned about the disappearing land line. It is nice to be able to call a house (anyone at the home) instead of a specific person. But then again, I canceled my Qwest phone service years ago (but we still have a house line). A SIP line is a still a land line, just not to Qwest.]


Dave Michels