While supporters of the Comcast and Time Warner Cable merger have pointed to the existence of competing Verizon FiOS service in certain markets as proof that there is indeed competition for broadband service (which there isn’t), the fact is that this fiber service isn’t going to be popping up in new markets in the foreseeable future.
Verizon CFO Fran Shammo recently told folks at a Deutsche Bank conference on telecom services that “I am not going to build beyond the current LSAs (local service acquistions) that we have built out.”
So if there is FiOS in your town but it hasn’t gotten to your block yet, you might get it. But if your local regulators haven’t made a deal with Verizon for FiOS by this point, then you’re probably out of luck and stuck with your current, most likely monopolistic cable company for broadband service.
Why won’t Verizon expand FiOS? Because it costs a lot of money to build that network and a long time for the company to recoup that money through subscriptions.
“We have to generate more cash within the wireline business and once we do that and I feel that FiOS has returned its cost of capital, then we can look at expansion,” explained Shammo, “but at this point we’re happy with what we have.”
Meanwhile, Google Fiber is looking to expand its gigabit Internet service to nine new markets in the coming years, and even stodgy ol’ AT&T recently announced it will move beyond its Austin experiment and be bringing high-speed fiber to Dallas in the coming months.
And SoftBank, the Japanese wireless company that owns a controlling share of Sprint, is pushing for a merger with T-Mobile because it believes the combined companies could eventually offer a wireless broadband option that could compete with the cable companies that currently dominate the residential broadband market.
by Chris Morran via Consumerist
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