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Broadband Battle Heats Up with Overhaul of Verizon's Phone Network

Posted on: Thursday, 8 January 2004, 06:00 CST

Jan. 9--The battle for broadband customers intensified yesterday as Verizon Communications Inc. moved toward even faster Internet service by announcing the beginning of a massive overhaul of its century-old telephone network.

Chief executive officer Ivan Seidenberg said the nation's largest local-phone company would spend $2 billion to begin upgrading its landline network to a fiber-optic system that would enable faster Internet data transfers while using more efficient Internet-protocol technology for regular phone calls.

Comcast Corp., meanwhile, said it had nearly completed its previously announced upgrade of its high-speed Internet service, doubling subscribers' maximum download speeds to about three megabits per second. In this region, the change started taking place in mid-December, company spokesman Jeff Alexander said yesterday.

"With a footprint our size, there isn't one day where you flick a switch" and every place is made faster, Alexander said. He said the speed boost would be available throughout Comcast's service territory by the end of this quarter.

Comcast also has sought to differentiate its service by providing special content, such as movie trailers, through its home page for broadband subscribers.

"We updated our broadband portal and designed it exclusively for broadband customers," Alexander said.

Comcast charges $42.95 a month for high-speed Internet access for customers who also subscribe to its cable service.

Verizon's flagship fast-Internet offering to residential customers and small businesses is digital subscriber line, or DSL, service, which is generally slower but cheaper than cable-delivered broadband.

Verizon charges about $30 a month for DSL customers who also buy a package of local and long-distance phone service. DSL maxes out at 1.5 megabits per second for downloads.

Other companies also have jumped enthusiastically into the broadband fray. A Federal Communications Commission report released last month said high-speed lines connecting homes and businesses to the Internet increased by 18 percent during the first half of 2003, from 19.9 million to 23.5 million lines.

MCI is packaging DSL service with its "Neighborhood" local and long-distance plans for an additional $35 a month.

Covad Communications Group Inc. said this week that it was expanding the areas that could get its DSL service nationwide -- adding, among others, Berlin, Burlington, Williamstown and Woodbury in New Jersey, and Wilmington, Del.

Verizon upped the ante yesterday, though, promising to extend fiber-optic lines all the way to some residential customers' homes, replacing aging copper-wire connections. Extending fiber to the home previously had been regarded as too expensive.

"We plan to reach 1 million homes with fiber at the end of 2004, and plan to double that rate thereafter," Seidenberg said at the Consumer Electronics Show in Las Vegas.

Verizon officials did not give a schedule for the fiber deployments.

Seidenberg said that Verizon had invested about $55 billion in infrastructure since 2000 and that the latest initiative was part of a broad push to give customers greater mobility with their communications, including Internet access.

The company also announced yesterday that it would spend $1 billion upgrading its wireless network to handle much faster data transmissions nationwide starting this summer. The upgrade would enable data transfers at speeds of 300 to 500 kilobits per second, six to 10 times faster than the speed of conventional dial-up modem service.

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To see more of The Philadelphia Inquirer, or to subscribe to the newspaper, go to http://www.philly.com

(c) 2004, The Philadelphia Inquirer. Distributed by Knight Ridder/Tribune Business News.

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