Study: FTTB is key for Verizon

BIA Financial Network (BIAfn-Chantilly, VA) and Telecom Pragmatics (Birmingham, AL) have issued a joint report, which concludes that contrary to the telecom industry’s “conventional wisdom,” Verizon’s access strategy isn’t based on delivering fiber to residential customers. The firms contend that the RBOC is instead centered on deploying high-speed bandwidth to many large enterprise customers.

“Just as in the old Ma Bell days when the higher margins from long-distance revenues subsidized the high costs of local service, Verizon appears to be counting on high profitability from FTTB [fiber-to-the-business] to make up for expected shortfalls with FTTH [fiber-to-the-home] installations,” maintains Sam Greenholtz, cofounder of Telecom Pragmatics and the report’s lead author. “The vast majority of the RBOC’s installations of fiber within its footprint are along the Interstate-95 highway corridor,” where most of the large businesses in its territory are located.

The report is based on in-depth interviews with service providers, including Verizon, SBC/AT&T, Bellsouth, and others. In addition to Greenholtz, who spent 28 years at Verizon and its predecessor companies, contributors to the report include John Spencer, who worked for BellSouth for nearly 30 years; industry analyst Mark Lutkowitz from Telecom Pragmatics; and BIAfn financial analyst David Gross.

“Industry observers need to realize that while there will continue to be substantial deployment of FTTH, especially in communities located near large businesses, Verizon’s primary concern is in becoming the leading managed service provider to the enterprise space in the nation,” contends BIAfn’s Gross.

The report-“Verizon’s Charging Forward with FTTP: Will Credit Markets and Regulators Get in Its Way?”-is available for purchase. For more information, visit www.bia.com/telecomreports.htm.

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