Cablevision, Verizon both claim best network

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By Yinka Adegoke and Ritsuko Ando
Reuters
Tuesday, March 20, 2007; 3:20 PM

NEW YORK (Reuters) - Cablevision Systems Corp. (CVC.N) and Verizon Communications Inc. (VZ.N) are turning their competition for subscribers into a war of words, with each boasting it has the best network in advertising campaigns.

The cable operator and phone company are going head-to-head in the New York metropolitan area, where Verizon is building out a fiber-optic network to offer high-speed Internet and video services alongside phone services.

Cablevision says in recent television advertisements that it has the "nation's most advanced fiber-optic network."

But Verizon, which started making the same claim a year ago, said Cablevision's statement was unsubstantiated.

"It's hogwash," Verizon spokesman Eric Rabe said by telephone on Tuesday. "We looked at this as something that we might charge as an unfair or unsustainable claim," he said, but added Verizon has decided against legal action for now.

Cablevision has been one of the most successful U.S. cable companies in winning phone customers by offering so-called triple-play phone, video and Internet packages. It has signed up 1.2 million phone customers in its New York territory. Up to 78 percent of its 3.1 million customers take digital video.

Verizon hopes its service, called FiOS, will help the company fight back. The company does not provide data by state; but nationwide, it had 207,000 FiOS video customers at the end of 2006.

Craig Moffett, a cable and satellite analyst at Bernstein, said it was difficult to say which service was superior -- while Cablevision had the most advanced network of any cable operator, Verizon's FiOS was just as advanced with the potential for more speed.

"You'd have to give the nod to Verizon for raw bandwidth and future potential of pure speed," Moffett said. However, he added: "But does pure speed matter? For right now you'd have to answer 'no."'

Verizon offers a variety of broadband speeds, with the fastest option being 50 megabits per second, although that is available only in six states out of its 28-state service area. The company said 15- and 20-megabit options are the most popular with consumers.

Cablevision's fastest option is also 50 megabits, though its standard speed is 15 megabits.

The cable operator said it has the most advanced network as it already connects 3 million homes and has the potential to pass through up to 4.6 million homes.

"Every one of those homes and businesses is offered our best and most technologically advanced television, Internet and voice products, at a value no other provider can match," Cablevision said in a statement.

Both companies use advanced fiber optic networks, but Verizon's stretches all the way to the doorstep whereas Cablevision's fiber-optic cable stops at neighborhood nodes and the cable company uses co-axial cable for the final leg.




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