Verizon bets big on fiber optics

Verizon has permission to sell TV service in about 80 communities in New York, Florida, Massachusetts, Maryland and Virginia. It has fiber available for phone and Internet service in many more _ 3 million homes. Verizon doesn't say how many homes are connected, but analysis of a tally by research firm RVA LLC indicates that Verizon had about 400,000 homes connected as of April.

"This is a once-in-a-lifetime project," said Paul Lacouture, Verizon's vice president of engineering and technology.

Chief among fiber's advantages is its almost unlimited capacity to carry information, which Verizon only nibbles at with its current system: It lights fiber to the home with just three laser beams, though the fiber can carry many more.

The single beam that carries video (the others carry data and telephone calls to and from the home) has more capacity than an entire coaxial cable of the kind used by cable companies.

Mark Lennihan / AP Verizon installer Pat Esposito connects wires to a fiber optic signal box on the side of a home in North Bellmore, N.Y.

In practical terms, that means better image quality, because the digital TV channels don't need to be degraded to save bandwidth.

"If you're watching a program, you see the faces elongate, smear out" on digital cable, says Alex Fazi, who as owner of a videography studio in nearby Wantagh has a keen eye for video quality. He said he'll sign up for fiber TV as soon as it's available in his area.

In a similar way, fiber provides almost limitless Internet connection speeds. With current technology, Verizon could provide download speeds of 644 megabits per second, a bigger step up from DSL at 1.5 mbps than DSL is a step up from dial-up.

But for now, the maximum speed Verizon sells is 30 mbps for small businesses, or 20 mbps for homes.

"Right now there are not a lot of applications online that demand 100 megabits," Lacouture said. That's true, but probably in large part due to the lack of home connections at that speed — a chicken and egg situation.

Speeds may be going up soon, though: Verizon already raised them once (from 5 mbps to 10 mbps at the lowest tier) in New York, New Jersey and Connecticut — the three states where it competes with Cablevision, a technologically sophisticated company that provides downloads at up to 30 mbps.

Apart from capacity, fiber has the advantage of being immune to interference and crosstalk, and nearly immune to rain, which can cause problems on the phone network.

"Customer reports have dropped by a factor of four or five when we've replace the copper with fiber," Lacouture said.

Verizon expects to cut costs for its outside equipment by 40 percent by switching to fiber. But to get there, it has to spend big.

Verizon's average cost of pulling fiber down a street was $1,400 per home at the beginning of last year, not including the cost of actually connecting the homes. The target cost this year is $890 per home, reflecting improvements in materials and techniques. If it reaches its target of laying fiber by another 3 million homes by the end of the year, that's a cost of $2.7 billion — about half of Verizon's annual earnings.

Verizon is in essence taking the lumps as it blazes a trail for large-scale fiber deployment in the United States across its 28-state territory — it's creating the demand for equipment that allows manufacturers like Motorola Inc. and Tellabs Inc. to bring down costs.

"Every month that goes by we see another improvement," Lacouture said.

A large part of the cost, however, is labor, which doesn't get cheaper by the month. Drawing fiber along a street involves digging a trench to lay it, or putting up plastic tubes on the utility poles, then pulling the fiber through the tubes.

Paul McIlrary, Verizon's area manager for outside plant construction around Massapequa, says his teams of about three people lay fiber at a speed of 25 feet to 35 feet per day in the dense Long Island suburbs. That may sound slow, but McIlrary has 90-110 linemen working to lay fiber just in Freeport, which has 45,000 inhabitants.

"With fiber, it's a light source, and any bend can distort the signal," McIlrary says. "So we have to be careful that we don't bend or kink it."

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