Verizon Fios

Verizon Fios
Industry Television
Internet
Phone
Founded September 22, 2005 (2005-09-22)
Keller, Texas, U.S.
Headquarters New York City, New York, U.S.
Parent Verizon Communications
Website www.verizon.com/home/fios/

Verizon Fios, also marketed as Fios by Verizon, is a bundled Internet access, telephone, and television service that operates over a fiber-optic communications network with over 5 million customers in nine U.S. states.[1][2][3] The name, Fios, is an acronym for Fiber Optic Service.[4] Service is offered in some areas of the United States by Verizon Communications, while Frontier Communications operates licensed FiOS services in former Verizon territories across six states, using a nearly identical network infrastructure. Fios service began in 2005, and networked areas expanded through 2010, although some areas do not have service or cannot receive TV and phone service because of franchise agreements.[5]

Verizon was one of the first major U.S. carriers to offer fiber to the home, and received positive ratings from Consumer Reports among cable television and Internet service providers.[6][7]

History

Early development (1995–1996)

The early stages of Fios began when Bell Atlantic was testing its video service "Stargazer" in 1995. This was the world's first commercial VOD (Video on Demand) service, which was tested to 1,000 homes in northern Virginia. During this time there were talks of developing a fiber optic based service. This service was developed at a headquarters located in Reston, Virginia.

"This will be folded into our deployment of fiber to the curb," Mr. Townsend said, referring to Bell Atlantic's plans to deploy a high-tech fiber-optic system.

(Bloomberg 1993) (Baltimore Sun 1996)

Launch and expansion (2005–2010)

In September 2005, Verizon Communications, announced the launch of its Fios television service, which first became available for 9,000 customers in Keller, Texas.[8] Verizon aimed to replace copper wires with optical fibers, which would allow greater speed and quality of communication.

In 2006, Verizon and Motorola partnered to bring its customers home DVR access, which allowed viewers to record and watch television programs simultaneously.[9] In 2006, The Wall Street Journal speculated:[10]

Verizon Communications Inc. is fielding offers for [sale] ... of traditional telephone lines ... part of the New York-based phone giant's strategy to delve deeper into the wireless and broadband arenas, while getting out of the traditional phone business in U.S. areas that aren't slated for fiber upgrades ... Verizon also has been shopping a package dubbed "GTE North" that comprises about 3.4 million access lines in former GTE Corp. territories in Indiana, Illinois, Ohio and Michigan.

In addition to expanding its customer base, Verizon expanded its services in the first few years. Home Media DVR, a digital video recorder, was released in 2006.[11] Fios updated its user interface in 2007, allowing customers to access widgets for localized content, such as weather and traffic.[12][13] Verizon announced in January 2008 that one million people subscribed to the service. By the end of 2008, Fios offered more than 150 HD channels.[12] Price increases were announced in April 2008, when Fios was available to (not necessarily subscribed by) 6.5 million households.[14]

In January 2009, Fios was available to 12.7 million homes, with about 2.5 million subscribing to the Internet service.[15] As of June 2009, Fios Internet had 3.1 million customers.[16] Estimates on December 31, 2009, were 3.4 million Internet customers and 2.86 million for Fios TV, with availability down to 12.2 million premises.[17]

Stable footprint (2010–present)

Following relatively poor financial results for the wider company in early 2010,[18] Verizon announced in March 2010 that it was winding down its Fios expansion, concentrating on completing its network in areas that already had Fios franchises but were not deploying to new areas, which included the cities of Baltimore and Boston, which had not yet secured municipal franchise agreements.[19] Doug Michelson, an analyst at Deutsche Bank, concluded that "Verizon has been overspending to acquire Fios customers".[18] Some viewed the halt in expansion as a violation of Verizon's agreements with some municipalities and states, since Verizon has collected revenue to deploy infrastructure upgrades that never occurred.[20] In New Jersey, Verizon collected an additional $15 billion in fees from customers and tax subsidies in exchange for promising fiber optic broadband for the whole state.[21] The New Jersey government altered the deal in 2014 to allow Verizon to substitute wireless internet access to fulfill its promise instead.[22] Verizon defended itself, claiming that they had spent $13 billion building fiber optics in New Jersey, about $7.6 billion more than the company anticipated.[23] Critics pointed out that wireless internet was slower and less reliable.[21]

In April 2010, Verizon announced that three million people were subscribed to Verizon Fios.[12] In July 2010, estimates were 3.8 million Fios Internet subscribers and 3.2 million TV subscribers, with availability to 15 million homes.[24]

In May 2013, Verizon announced it had passed 18 million homes with Fios and 5 million customers.[25]

In April 2015, Verizon announced that it added 133,000 new Fios Internet connections and 90,000 net new Fios Video connections in Q1, taking its total subscriber base to 6.75 million and 5.74 million, respectively.[3]

Television

Fios TV is one of three services offered by Verizon Fios. Verizon reported 4.6 million Fios TV connections as of the end of 2017.[26] Verizon offers Fios packages with high-definition and standard-definition TV, as well as video on demand.[27] In April 2015, Verizon launched its custom TV packages that allow subscribers to choose between a selection of a smaller number of channels bundled together.[28] By the end of 2015, Custom TV packages accounted for between 30 percent and 40 percent of new Fios TV subscribers.[28][29][30]

Fios TV uses QAM technology to deliver signals to a customer's property using its fiber optic cables.[31] At the home, the optical network terminal turns the signal into a radio frequency signal that can be used on a home's existing coaxial cables, feeding the signal to a set-top box.[31] Fios TV's video on demand and interactive widgets use Internet Protocol technology.[32]

Internet access

Fios Internet was the first service offered under Verizon's Fios brand, and is one of three of the product line's current offerings. The broadband Internet service initially launched in Keller, Texas, in 2004,[33] a year before Fios TV was available.[34]

The service offers several data transmission speed tiers for subscribers. Originally, peak speeds topped out at 30 Mbit/s.[33] Until 2014, upload speeds were slower than download speeds for any given plan, but Verizon decided to increase the upload speed to match the download speed of each tier.[35] As of 2017, upload and download speeds range from 50 to 1000 Mbps, depending on the plan.[36] At 50 Mbit/s, the lowest-tier plan is double the FCC's definition of broadband.[36]

According to mid-year 2016 figures, there were 5.49 million Fios Internet subscribers at the end of Verizon's second quarter.[37] Below are Verizon's present speed tiers (as of June 2016):[38]

Download Speed Upload Speed
50 Mbit/s 50 Mbit/s
100 Mbit/s 100 Mbit/s
150 Mbit/s 150 Mbit/s
300 Mbit/s 300 Mbit/s
500 Mbit/s 500 Mbit/s
750 Mbit/s 750 Mbit/s
940 Mbit/s 880 Mbit/s

Telephone

In addition to its TV and Internet services, the company also has a voice over IP service via its fiber-optic network called Fios Digital Voice. The service initially launched in Virginia and Maryland in September 2008 and eventually fully replaced an earlier service, VoiceWing, which Verizon offered from 2004 to early 2009.[39]

While Verizon also offers plain old telephone service (POTS), it has been reported in various markets that Verizon physically disconnected the copper lines for copper-line phone service at the time that Fios was installed.[40]

Criticism

When Verizon Fios was first launched in 2005, Verizon's shares decreased by 4.6 percent while AT&T (which was still technically SBC at the time, as it was still finalizing its purchase of AT&T Corporation) rose by 38.7 percent. Critics argue that Verizon's low prices could put their fiber-optic network in jeopardy, since the cost of building a fiber-optic network could surpass the return from Fios sales.[41] While there has been criticism of Verizon Fios since its launch, there have been many positive reviews of the services. A 2007 report noted the high quality of the service and that subscribers enjoy the fast Internet speeds and high quality HD channels.[42]

Carriage disputes

The Weather Channel carriage dispute

On March 10, 2015, at midnight EDT, The Weather Channel and its sister network, Weatherscan, were pulled from Verizon Fios after the two parties were unable to come to terms on a new carriage agreement. The services have respectively been replaced by the AccuWeather Network (which launched on March 13) and a widget provided by Fios featuring forecast content provided by WeatherBug. No public announcement was made regarding the removal until over 12 hours after TWC and Weatherscan were pulled.[43][44][45] The Weather Channel offered a less expensive deal to Verizon Fios, which rejected the offer. Verizon cited the wide availability of the internet and mobile apps for consumers to access weather content any time of day as the reason for dropping TWC and its services.[46][47]

The Weather Channel had earlier signed renewal agreements with major providers that are members of the National Cable Television Cooperative (NCTC), including Time Warner Cable and Cox Communications. While Verizon claimed it was a long-term business decision (instead of a carriage dispute) that it made, The Weather Channel launched a campaign to urge viewers to contact Fios about restoring the cable channel and its services.[48]

ESPN lawsuit

In April 2015, ESPN Inc. sued Verizon for breaching its carriage contract by offering ESPN and ESPN2 as part of a separate sports package under its new "Custom TV" service. ESPN's contract requires the two networks to be carried as part of the basic service.[49] Verizon and ESPN reached a deal in May 2016.[50] The terms of the deal were not made public.[50]

Cablevision lawsuit

On May 19, 2015, Cablevision sued Verizon in U.S. District Court, Southern District of New York, to challenge Verizon's claim that it is 100 percent fiber-based. Cablevision started an advertising campaign to take the case mainstream.[51] The two companies agreed to end the dispute in September 2015.[52] The terms of the deal were not disclosed at the time.[52]

Deployment issues

On March 13, 2017, Verizon was sued by the city of New York for violating its cable franchise agreement, which required the provider to pass a fiber-optic network "in underground conduit, along above-ground utility poles, or otherwise—in front of (or behind) each residential building" in the city by June 30, 2014. The city identified approximately 1 million households that were not yet served by the network, including a larger number of outstanding requests than claimed by Verizon, along with allegations that Verizon refused to install Fios in certain areas, and attempted to require multi-family residential units to enter into bulk purchases or exclusivity deals (which violates current FCC policy).[53]

Verizon defended the accusations, stating that it could not install fiber-optic service at all households because they had not yet received permission from landlords. They added that the city did not assist them in drafting neutral letters to request access from landlords for installation, and rejected proposals to increase its use of telephone poles as part of its build-out of the network. The company stated that it planned to invest $1 billion to install Fios in 1 million additional homes, and small businesses, over the next four years.[53] Verizon also stated that its obligation to "pass" all households was based on an understanding that the company would "generally place its fiber-optic network along the same routes as had been used for its copper network and would use similar strategies for accessing individual buildings", and that per these discussions, the agreement did not contain language defining "pass" as meaning that lines would be installed fronting buildings, unlike other cable franchise agreements.[53]

See also

References

  1. ↑ "About Verizon Fios Communications". broadbandmap.gov. Retrieved 2015-06-02.
  2. ↑ "Verizon Fios Overview and Coverage". broadbandnow.com. Retrieved 2015-06-01.
  3. 1 2 Team, Trefis. "Verizon Reports Strong Q1 Earnings Amid Sluggish Subscriber Adds". Retrieved 2015-05-12.
  4. ↑ Margaret Rouse, TechTarget. "FiOS (Fiber Optic Service)." March, 2012. Retrieved July 6, 2017.
  5. ↑ http://www.verizon.com/home/fiosavailability/
  6. ↑ "Fiber-Optic Providers Are Leading Choices for Internet, TV, and Telephone Service". Consumer Reports. January 5, 2010. Archived from the original on January 26, 2010. Retrieved July 24, 2011.
  7. ↑ "Consumer Reports Survey: Bundling TV, Internet, and Phone Services Point to Big Savings". March 28, 2013. Retrieved August 8, 2013.
  8. ↑ Belson, Ken (September 25, 2005). "Verizon Introduces Fiber Optic TV Service". The New York Times. Retrieved September 27, 2013.
  9. ↑ Corner, Stuart (Aug 15, 2006). "Verizon Launches the Three-channel DVR". ITWire. N.p.
  10. ↑ Searcey, Dionne; Dennis Berman (May 10, 2006). "Verizon Fields Offers for Phone Lines; Value of Two Packages May Total Up to $8 Billion; Bigger Focus on Web Services". The Wall Street Journal. p. B4. ISSN 0099-9660.
  11. ↑ Fisher, Ken (14 August 2006). "Verizon taps in-house DVR media streaming". Ars Technica. Retrieved 28 June 2016.
  12. 1 2 3 "Timeline: The Evolution of Fios TV". Blog. ARRIS Everywhere. August 19, 2010. Retrieved September 27, 2013.
  13. ↑ Safran, Steve (18 July 2007). "A sneak peak at the Verizon FiOS 2.0 guide". Adweek. Retrieved 28 June 2016.
  14. ↑ Spangler, Todd (April 30, 2008). "Verizon Plans Q2 Rate Hike For Fios". Multichannel News. Retrieved July 24, 2011.
  15. ↑ Porges, Seth (February 12, 2009). "Fiber Optics Bring Faster Internet, DVDs on Demand". Bloomberg L.P. Retrieved July 24, 2011.
  16. ↑ Ng, Jansen (August 20, 2009). "Rogers Cable Launches 50 Megabit DOCSIS 3.0 Service". DailyTech. Retrieved July 24, 2011.
  17. ↑ "Verizon Fios". FiberForAll.org. 2009. Retrieved July 24, 2011.
  18. 1 2 Joseph N. DiStefano (January 26, 2010). "Verizon, Fios losing Comcast war; will cut over 10,000 jobs: reports". The Philadelphia Inquirer. Retrieved March 30, 2014.
  19. ↑ Svensson, Peter (March 26, 2010). "Verizon winds down expensive Fios expansion". USA Today. Associated Press. Retrieved July 24, 2011.
  20. ↑ Kushnick, Bruce (May 19, 2012). "The Great Verizon Fios Ripoff". The Huffington Post. Retrieved August 12, 2012.
  21. 1 2 Wood, Sam (March 14, 2014), "Will Verizon be allowed to break its FiOS promise to New Jersey?", The Philadelphia Inquirer, retrieved December 16, 2016
  22. ↑ Brodkin, Jon (June 9, 2015). "22 years after Verizon fiber promise, millions have only DSL or wireless". Ars Technica. Condé Nast. Archived from the original on December 16, 2016. Retrieved December 16, 2016.
  23. ↑ Morley, Hugh (March 14, 2014). "N.J. may ease Verizon's broadband obligation". The Record. NorthJersey.com. Archived from the original on December 16, 2016. Retrieved December 16, 2016.
  24. ↑ Godinez, Victor (October 8, 2010). "If Verizon's Fios service isn't here, it's not coming". The Dallas Morning News. Retrieved July 24, 2011.
  25. ↑ Buckley, Sean (May 30, 2013). "Verizon's Shammo doubts Google Fiber will build in Fios areas". Retrieved August 8, 2013.
  26. ↑ Frankel, Daniel (23 January 2018). "Verizon loses 29K Fios video subscribers in Q4". FierceCable. Retrieved 22 March 2018.
  27. ↑ "Verizon Fios". Fiber For All. Fiberforall.org. Retrieved 4 October 2016.
  28. 1 2 Spangler, Todd (19 February 2016). "Verizon revamps 'skinny' Fios TV bundles after spats with ESPN, others". Variety. Retrieved 4 October 2016.
  29. ↑ Rodriguez, Ashley (8 December 2015). "Verizon's CEO says 300-channel cable bundles will be gone in a few years". Quartz. Retrieved 4 October 2016.
  30. ↑ Friedman, Wayne (21 January 2016). "Verizon Gets Third Of FiOS TV Revs From 'Skinny Bundles'". MediaPost Communications. Retrieved 4 October 2016.
  31. 1 2 Drawbaugh, Ben (17 December 2009). "An inside look at a Veriozn Fios super headend and video hub". Engadget. Retrieved 4 October 2016.
  32. ↑ Lawson, Stephen (3 June 2009). "Targeted ads, more choices in Fios TV's future". PC World. Retrieved 4 October 2016.
  33. 1 2 Charney, Ben (19 July 2004). "Verizon's fiber race is on". CNET. Retrieved 28 June 2016.
  34. ↑ Reardon, Marguerite (22 September 2005). "Verizon switches on TV service". CNET. Retrieved 10 November 2016.
  35. ↑ Brodkin, Jon (July 21, 2014). "Verizon Fios finally symmetrical, upload speeds boosted to match download". Ars Technica. Retrieved August 10, 2014.
  36. 1 2 Brodkin, Jon (27 January 2016). "Verizon Fios default speed now 50 Mbps — double FCC's broadband definition". Ars Technica. Retrieved 10 November 2016.
  37. ↑ Baumgartner, Jeff (26 July 2016). "Verizon Fios sheds 13,000 internet subs, 41,000 video customers in Q2". Multichannel News. Retrieved 16 December 2016.
  38. ↑ "Fios and DSL performance". www.verizon.com. Retrieved 2016-06-25.
  39. ↑ Karl Bode (12 December 2008). "Here comes Fios Digital Voice". DSLReports.com. Retrieved 9 January 2017.
  40. ↑ Yao, Deborah (July 11, 2007). "Verizon's copper cutoff traps customers, hampers rivals". Seattle Times. Associated Press. Retrieved July 24, 2011.
  41. ↑ Hansell, Saul (August 18, 2008). "Verizon’s Fios: A Smart Bet or a Big Mistake?". The New York Times.
  42. ↑ "Review: Verizon's Fios Phone-Cable TV-Internet Service". FOX News. N.p., September 12, 2013. Web.
  43. ↑ Yvonne Villarreal (March 11, 2015). "Verizon Fios drops the Weather Channel". Los Angeles Times. Tribune Publishing. Retrieved March 20, 2015.
  44. ↑ Brian Stelter (March 10, 2015). "Verizon Fios drops the Weather Channel". CNN Money. Retrieved March 20, 2015.
  45. ↑ Beatrice Verhoeven (March 13, 2015). "AccuWeather Launches Its First National Weather Channel". The Hollywood Reporter. Retrieved March 20, 2015.
  46. ↑ Roger Yu (March 10, 2015). "Verizon Fios drops Weather Channel over contract". USA Today. Gannett Company. Retrieved March 20, 2015.
  47. ↑ "Verizon drops The Weather Channel, claiming internet killed the weatherman". Quartz. March 10, 2015.
  48. ↑ "Verizon Fios drops The Weather Channel – Our Statement". The Weather Channel. Retrieved March 16, 2015.
  49. ↑ "ESPN sues Verizon over its plan to create slim bundles of cable channels". The Verge. Retrieved April 27, 2015.
  50. 1 2 Kludt, Tom (10 May 2016). "ESPN and Verizon reach settlement in subscription lawsuit". CNNMoney. Retrieved 28 June 2016.
  51. ↑ http://www.rcrwireless.com/20150520/carriers/cablevision-sues-verizon-verizon-says-firm-has-network-envy
  52. 1 2 Baumgartner, Jeff (2 October 2015). "Cablevision, Verizon reach deal in internet false ad row". Multichannel News. Retrieved 14 September 2016.
  53. 1 2 3 "1 million NYC homes can't get Verizon FiOS, so the city just sued Verizon". Ars Technica. Retrieved 14 March 2017.

Further reading

  • Marsan, C. D. (2008). Verizon Fios tech heading to enterprises; Claims new high-speed optical networks slash floor space, electricity needs. Network World, (1). Retrieved March 8, 2009.
  • Searcey, D. (2006). Telecommunications; Beyond Cable; Beyond DSL: Fiber-optic lines offer connection speeds up to 50 times faster than traditional services; Here's what early users have to say. The Wall Street Journal, (R9). Retrieved March 7, 2009.
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