Verizon: Take That, Cable

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I’ll be very surprised if this happens before cable is offering a completely revamped, much more adavnced and higher speed service. There are 6MB trials happening today, not planned for the future like in the Verizon marketing plan… we’ll see I guess but doubtful this will compete in any real time.

Good thing Verizons marketing announcements don’t stump advancing technology like in the old Microsoft vaporware days.

More intense and more expensive. Verizon expects to spend about $1 billion on the first phase of its rollout, making fiber lines available to 1 million homes by this fall. The Texas markets will include Keller, a suburb of Dallas. Although the identities of the other eight states could not be learned, one is likely to be California, a person familiar with the strategy says. Verizon plans to offer the service to 1 million more homes next year and a total of 12 million by 2008. Over the next 15 years, Verizon expects to spend $20 billion to $30 billion to extend service to nearly all 35 million customers.

Television is only part of the strategy. The new fiber-optic lines also will allow Verizon to offer the most advanced consumer broadband service the U.S. has ever seen. Internet connections of up to 30 megabits per second, more than 10 times faster than a state-of-the-art cable modem or digital subscriber line (DSL), will be possible, Verizon executives say. Five- and 15-megabit versions will be available for customers who don’t require all that juice. Although specific pricing hasn’t been decided, the 5-meg version will be competitive with cable modem service, which typically costs $40 to $45 a month. Eventually, if there’s demand for it, Verizon intends to offer consumers Net connections of 100 megs or more.

Cable rivals in Texas insist they’re not quaking in their cowboy boots. For one thing, Verizon has tried this before. Its corporate predecessor, Bell Atlantic Corp., unveiled grand plans to offer pay TV to its customers on the East Coast during the 1990s, but the project failed because of high costs and technological problems. Even if Verizon can make the economics work this time, it has no experience in entertainment, where it will have to face off against Time Warner Inc. (TWX ), Comcast Corp. (CMCSK ), and other powerful rivals. “We are already in a highly competitive marketplace. We face satellite in every market we are in,” says David Mack, a spokesman for Charter Communications Inc. (CHTR ), which provides cable service in Keller. “We believe we will do just fine because we offer superior choice, price, and quality of customer care.”

[BW Online]

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