Verizon has quietly scaled back its aggressive fiber deployment in favor of DSL over tired old twisty pair. The take rate for the company’s premium priced FiOS service has slowed. While I have not been able to find a break down by service, I’m certain the slowest products are pay TV and voice.

We have been repeatedly told that bigger pipes and direct fiber connections are impossible in America because of far flung population. Never mind the fact that the cost if installing a fiber or twisted pair loop to a residence are nearly identical. John Timmer of ARS Technica provides a current update contrasting fiber service in Hong Kong vs New York City. Both are extremely dense population centers. Both are outrageously expensive. Both have archaic laws regulating new construction and public utilities with plenty of red tape to slow the process.  I’ll even bet the New York city fathers will insist that Hong Kong’s infrastructure is more primitive and its government more corrupt. So why is it that the average Hong Kong resident has a 100MBPS direct fiber connection available at a price lower than Verizon’s cheapest DSL offering? And how can it be that a great many New Yorkers can’t even get FiOS at any price?

Hong Kong Broadband Network announced the initial results of its “Awesome Speed. For Everyone.” sales, which offer a symmetric 100Mbps fiber connection for the hefty price of US$13 a month. In the two months it has been offering it, customer growth has tripled compared to the earlier months of 2009. Clearly, the company has found it relatively easy to roll out or purchase fiber in Hong Kong’s dense urban environment, and is attempting to recoup its investment in infrastructure by attracting lots of people to its service using low prices.

To get half that download speed (and one-fifth the upload) with Verizon costs $140 a month, assuming you bundle it with local phone service. It also requires a one-year commitment, and Verizon has recently raised the early termination fees so that anyone quitting ahead of that year will now owe the company $360. These would suggest that the company plans on recouping its costs through fewer customers that pay far more. (ARS Technica)

My belief is that the Verizon suits do not see access as a serious business. The entire FiOS business model is based on selling subscribers a “triple play”. More consumers want access without overpriced VoIP service and pay TV. If you only want access, Verizon’s suits think DSL is all you deserve.  If we had real competition over the last mile (equal access to the copper infrastructure), Verizon would have to deploy fiber to have a shot at continuing to charge a premium price.

It’s not difficult to understand Verizon’s strategy for the future. It’s all about fiber in major population centers and wireless. He’s pretty much summed it up in recent statements:

Mr. Seidenberg said that his “thinking has matured” and that trying to predict when the company would stop losing voice landlines “is like the dog chasing the bus.”

“We don’t look any different than Google,” he said. “We can begin to look at eliminating central offices, call centers and garages.” (New York Times)

Never the less, Verizon’s boss still has a view of the future that is distorted by his will to justify very questionable investments. This quote that will prove wrong, at least as he presents it, is:

“Video is going to be the core product in the fixed-line business,” Mr. Seidenberg declared. And the focus will move from selling bundles of video and landline to video and cellphones, he added. (New York Times)

The closed video systems  are dying, and the traditional cell phone has peaked. Net based video on demand and portable, device independent voice services are the future. I think Seidenberg probably knows this, but letting the rest of the world in on your mistakes is not good for your career.

What’s wrong with this picture? Time Warner continues its roll out of caps and new charges with little resistance from competitor AT&T. Meanwhile, Verizon and Cablevision may be getting ready to take off the gloves. While this bit of sparring between duopoly “siblings” is hardly the stuff of a vibrant marketplace, it does demonstrate the difference between duopoly competition and a cartel.

“We’ve nearly completed the DOCSIS 3.0 wideband deployment across our service area as part of Wi-Fi rollout,” said (Cablevison President)  Rutledge, “and we expect to make an announcement shortly related to a wideband product for both residential and business customers.” The deployment should cost Cablevision between $70 and $120 per customer (they have more than 3.1 million). (DSL Reports)

PC World’s Grant Goss has a perfect illustration of a working duopoly that could provide better service at better prices, but since is doesn’t have to………

On one side there’s my current provider, Comcast, which has a weird billing system that lets it shut off service without any real warning. On the other side is Verizon, which seems to be doing everything it can to avoid providing fiber-based Fios service to my house — even though it’s available in my neighborhood.

The story starts like this: About three months ago, I called Verizon to ask about its Fios broadband and television service.

This wasn’t an out-of-the-blue request. Verizon has been promising Fios in my area for a couple of years, and in April or so, I observed a Verizon technician stringing wires on our street. He assured me the wires were for Fios service.

In recent months, Verizon has been trumpeting Fios in mail sent to our address and in advertisements in two local weekly newspapers. With the ads promising we could save up to US$40 a month from our monthly cable, broadband and phone bills, I called Verizon.

I told the Verizon representative I wanted Fios. “It’s not available to your address,” she said.

I had an ace up my sleeve. “But you’re sending me mail offering it,” I said. “And … my next-door neighbor has it.”

Yes, in addition to having stood and watched the Verizon technician string the fiber cables across my street, I had also seen that my neighbors in the very next house have Fios.

The Verizon sales rep wasn’t buying it. “But sir, it says right here that Fios isn’t available to you,” she said. (PC World)

We’ve had a regulating body (the FCC) that has allowed the duopoly to thrive unchallenged. Before you blame FCC Chairman Martin exclusively, remember he’s simply carried on a long standing tradition of playing lap dog to the telcos. A parliament of whores called the US Congress has done little with it’s much touted oversight other than paying lip service in return for duopoly perks and donations. With a new administration poised to take over we’ve already seen a glimpse of a “new broadband policy” which is likely to hand over more of your tax dollars to a duopoly to get them to build what should have been built over a decade ago with the massive subsidies they have already received. If anything actually gets built this way, the customers are likely to receive substandard service at the world’s highest prices. At the risk of repeating myself: As long as there are few alternative options for the consumer, we will continue to get crummy service, and over pay. No federal subsidy or well intentioned oversight from people that have never held a real job in the competitive marketplace will fix this.

If you want cheap, abundant, and tastier hamburgers, you need a bunch of comboys competing head to head, not a gentlemen farmer or two overseen by their benefactors. Broadband is no different.

A post Halloween tale from the Verizon Crypt of Woe. The tale involves naturally around the billing system. They can’t clear the previous owners services to have David service running when he moves in post closing. The FIOS billing extensions didn’t work when I was there and still doesn’t on the edges. –

The fact that Verizon can’t setup an order without the previous service actually stopped is pretty ridiculous. t doesn’t allow for any leeway, like in my case. But ok, not the end of the world, I’ll call on Friday morning and get everything setup for that weekend for installation. Friday morning rolls around, I speak to the same rep. Service has stopped, but it will take 24 hours to process, and since they’re closed on the weekend, I’ll have to wait until Monday. Ok, that sucks, but again, understandable situation.

Monday comes around, and this is where the insanity really starts to begins. I call to setup service, but I’m told that it cannot be done because something happened in the system and our order is not “flowing” through correctly…Ok…They tell me they’re working on it, and will let me know once it has been resolved so I can get everything setup.

I call every day for a week, I still get the same excuse. The previous owners order is not clearing out properly, which is not allowing my order to flow through the system properly. They have submitted a ticket to their IT team, and that was pretty much the only thing they could do. They listed the ticket and the order as urgent, and from a management level request.

The fact that it can take a week for an IT team at a multi-billion dollar company over a week to figure out how to clear an order out of a system is insane. I even mentioned the idea, why not just cancel our order, put a new one in, and maybe it will work. The rep tells me that will not do anything because the problem lies with the previous owners service.

Fari Ebrahimi, you are a piece of work. You birthed this baby and it is still a cripple. But then its not your problem anymore is it? You made sure you slide out from under this millstone before it crushed you.

Be positive David! At least VZ hasn’t tried to burn your house down!

Linky.