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Broadcasters and cable operators are nervously watching as Verizon and SBC work furiously to deploy the most advanced fiber optic networks ever built.

Verizon’s FiOS network is already offering 30Mb/s Internet service and telephony, and soon will offer interactive television services — all over the same tiny fiber optic cable to the home. SBC’s similar Lightspeed service is supposed to be available no later than early 2006.

Verizon has taken its FiOS marketing campaign to the streets, sending out Hummers wrapped in banners with logos for the new fiber-to-the-home service.

Since last year, Verizon has quietly spent billions of dollars while digging up streets to lay the new fiber network in neighborhoods in half of the states where it provides local phone service. So far, it has done little marketing to promote the FiOS network and services. With about 250 communities up and down the East Coast and in Texas now hooked up, Verizon is turning up the marketing heat in those places as it looks to sign up new customers.

Both Verizon and SBC are gearing up to use new IP video technology for home delivery over their networks. Traditional cable offers their customers available channel simultaneously, a process that’s bandwidth intensive. IP video, on the other hand, more efficiently transmits only the program that the viewer is watching at a given moment.

Using IP technology offers a huge advantage. Servers at the phone companies can store and download video programming on-demand, thus allowing a huge choice of HD movies, concerts, sporting events and other television content to be instantly available over the fiber link.

Much is at stake since the telcos, if successful, stand to become serious competitors to not only terrestrial broadcasters, but to other pay television services.

The NAB asked Congress to prohibit SBC and Verizon from offering digital TV unless the companies follow an extensive list of government regulations. Among them: local broadcasters must remain the only source for network programming; fiber providers must be required to black out the availability of certain sports games; and local TV broadcasts must be carried on fiber networks.

Telco executives, ignoring the current players and signing up new program services, have suggested that broadcasters should become their partners in the new digital venture.

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