Verizon described its fiber-to-the-home project as the dawn of better Internet connections and competitive television choices.
"This is one of the most significant turning points in telecom," said Paul Lacouture, president of Verizon Network Services Group. "This will pave the way for long-awaited convergence between voice, video and Internet."
Fiber-optic cables like these will carry voice, high-speed Internet and TV for Verizon.
(Damian Dovarganes -- AP)
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For now, the new network will carry telephone and high-speed Internet, for between $35 and $45 a month, depending on the speed. Verizon said it is negotiating with companies including Viacom Inc. so it can start selling video programming, high-definition television, and video-on-demand service starting next year. The service will be "competitive" with cable, officials said, but they declined to discuss how much it would cost.
Cox, which has 260,000 customers in the region, is ahead of Verizon in offering advanced technology, said Alex Horwitz, a Cox spokesman. It completed a $500 million regional upgrade, allowing it to offer high-speed Internet, telephone service and high-definition television, he said. "We believe we are already ahead of the game."
"It's a tough market to break into because we already are an extremely competitive market," said Brian Dietz, a spokesman for the National Cable & Telecommunications Association, which represents the cable companies. Many Washington area residents already have four options, including Comcast, Cox, Starpower Communications LLC and two satellite-TV providers, he said.
Analysts question Verizon's ability to earn back its investment in the new network.
"I think it's going to be difficult for them to make their money back," said Timothy Horan, an analyst for CIBC World Markets Corp., because they will have to beat cable's prices. "I haven't seen a model that makes it work."
To deploy the service, Verizon must string hair-thin glass fibers. About 60 percent of the fiber can be strung along telephone poles, but the remainder requires digging up streets to bury it. The task is such a huge undertaking that the company said it will hire 3,000 to 5,000 new employees nationally by the end of next year. Verizon currently employs more than 207,000 people.
Sales of high-speed Internet in the suburbs of Los Angeles, Dallas, and Tampa, where Verizon started offering service earlier this year, are "better than expected," said Robert Ingalls, president of Verizon's Retail Markets Division, but he declined to release details.
