Verizon bets big on fiber optics

Other than that, the actual placing operation isn't much different from copper, which Verizon's people have a lot of experience with.

Home installation is another cost: the target here is $715 this year, but Verizon has acknowledged that costs are running above that target. It's a big job, at least if TV service is involved. It took the installer all day to get the Donohues up and running, for instance.

Getting a "drop cable" with fiber to the home from the nearest utility pole is the small part. The installer then attaches a large box, called an Optical Networking Terminal, to the side of the house. On the other side of the wall, he installs a backup battery, which should keep the ONT running for six hours if there is a blackout.

Then he strings coaxial cable from the box to the TV sets (Verizon will use existing coax if it's not substandard), Ethernet cable to an Internet router, and a phone line to handsets. In addition, a small box called a Network Interface Module is installed inside that needs to connect both to the coaxial and Ethernet cables.

With costs like that, it's perhaps no mystery why the other big telephone companies, like AT&T Inc. and BellSouth Corp., are focusing on upgrading their copper DSL lines rather than bringing fiber to the home (though they do draw fiber in new subdivisions). But analysts believe the DSL upgrades are stopgaps, and that the other companies will eventually move to fiber in a few years. By that time, Verizon's efforts may have made the process simpler and cheaper.

"People talk about the risks of doing this," says Michael Render, who tracks fiber buildouts for RVA, the research firm. What they should be talking about, he says, is the risk of not building out fiber. "The world is changing very rapidly."

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