Verizon May Lease Optical-Fiber Network
Posted on: Wednesday, 25 May 2005, 15:00 CDT
NEW YORK - Verizon Communications Inc. said Wednesday it is in talks to give Internet service providers access to the optical-fiber network it is building to replace copper phone lines.
Verizon is talking with several ISPs to develop a wholesale relationship similar to its digital subscriber line offering, Verizon spokesman Mark Marchand said.
In order to offer broadband Internet service, ISPs lease access to the copper lines from phone companies such as Verizon or SBC Communications Inc.
EarthLink Inc. spokesman Dan Greenfield confirmed the ISP was in talks with Verizon and said the parties were hammering out the timeframe and rates.
One difference in a potential new deal is it isn't federally mandated. Phone companies are required to lease out their copper lines, some argue at below-market prices, to anyone looking to offer Internet service. As a new technology, fiber optics don't follow those rules.
Verizon's FiOS project, which connects the company's customers directly to the fiber network, will greatly enhance current broadband speeds, and also allow for Internet-based video service in addition to data and voice. The fiber network is now within reach of 1 million homes, and is on track to encompass communities with 3 million homes by the end of the year.
As a wholesaler, Verizon can add another stream of revenue that will help pay for the costly upgrades.
"It appears to be an opportunity for Verizon to accelerate the return on investment," said William Power, an analyst with Robert W. Baird & Co.
For ISPs, the relationship allows them to get access to the service so that they won't be left behind as customers demand higher connection speeds.
Marchand doesn't believe the ISPs providing competing Web service will be a competitive risk, because Verizon can derive revenue through its phone and video service.
SBC and BellSouth Corp. are also working on their own fiber projects.
SBC spokesman David Pacholczyk said that the company was talking to ISPs but that the conversations have been more general. The company already leases out DSL lines to ISPs, and he said SBC would be open to other deals.
BellSouth spokesman Jeff Battcher said the company was also in talks with the ISPs in regards to its fiber networks. Like Verizon, BellSouth doesn't believe that allowing ISPs to resell fiber-based Internet access will create a larger competitive threat than DSL.
In afternoon trading, Verizon shares were at $35.40, up 20 cents, or 0.6 percent on the New York Stock Exchange.
Shares of EarthLink fell 12 cents, or 1.1 percent, to $10.49 on the Nasdaq Stock Market.
Source: Associated Press/AP Online
Related Articles
- Verizon to test faster Internet service
- New Verizon Business Managed Service Makes Collaboration Easier
- Verizon Flex for Business Internet Is Latest Productivity Package for Small Business
- Verizon Expands High Speed Internet Service
- Verizon's Prepaid Interpretation Service Helps Eliminate Barriers in Communicating With Limited-English or Non-English Speakers
- Qwest Bill Adds Internet Line Tax
- Small Firms in New Jersey Move to Ultra-Fast Lane With Verizon FiOS Broadband Service for Business
- Small Firms in Maryland and Virginia Move to Ultra-Fast Lane With Verizon FiOS Broadband Service for Business
- Nortel Networks to Convert Verizon to 'Voice over Internet Protocol' Service
- Time Warner to use cable lines to add phone service
 |
 |
User Comments (0)
RSS Feeds