Optimum versus FiOS: Oh, What a Lovely War

October 20, 11:05 AMNY Telework ExaminerCarl Weinschenk

Previous Next

3 comments Print Email RSS Subscribe

Subscribe

Get alerts when there is a new article from the NY Telework Examiner. Read Examiner.com's terms of use.

Email Address   Include other special offers from Examiner.com Terms of Use

Long Islanders telecommuters and teleworkers are perfectly positioned to take advantage of a turf war between Verizon and Cablevision. The battle has hit high gear: Cablevision his getting into the Wi-Fi business and its phone service has more than 2 million customers. Verizon has rolled out its FIOS to most of the island.

The technology of the two projects is far different, of course. The bottom line, however, is the same: Home owners on Long Island are receiving far greater choice and more sophistication in their telecommunications services.

Both industries are victims of their own success. Cable companies have done such a good job of providing video (and more lately high speed data) that they didn't pay much attention to voice--a natural extension for them--until the past half-decade. Likewise, the telcos companies had a monopoly on phone services, for which their copper-based infrastructure was well suited. However, it could not easily support data and other services.

Finding away around these shortcomings is especially important in light of trend toward packaging multiple services together for a collective price lower than each service would cost on an ala carte basis (“bundling”).

Both industries feel that the best defense is a good offence, so each is confronting their problems while simultaneously going after each other’s core customers. All this spells good news for customers.

During the past three or four years, cable operators have geared up to offer telephone services. In some cases, they have used traditional technology. This was done as a way to win market share and perfect back office procedures that would remain the same once voice over Internet protocol (VoIP) became the underlying technology. Cablevision, however, didn’t go that route. Instead, it went directly to VoIP (though an associated company, Lightpath, is a traditional phone company that serves larger businesses).

Verizon faced perhaps an even more intractable problem. Telcos have faced an unpleasant reality since the dawn of the broadband era: The copper wires that extend from central offices to virtually every home and business in the United States just don’t have the bandwidth to support true broadband services. To this point, its digital subscriber line (DSL) services have managed to squeeze enough data next to the telephone calls to keep the phone companies competitive with cable operators' modem services. And, indeed, there are new versions of DSL in the pipeline that proponents say will extend the life of the industry’s copper infrastructure into the future, though many questions remain about these emerging approaches.

Verizon took a more aggressive tack. The company already offers DSL services. However, rolled the dice on its future with a plan to replace the copper in its distribution plant—the infrastructure between the central office and a point just outside the customers’ premise—with fiber optic cables. Varieties of such plans go by names such as “fiber-to-the-premises” (FTTP) or “fiber-to-the-home” (FTTH).

Thus, removing copper from the equation until the very end greatly enhances the system’s overall capacity. Such systems have been possible for many years and have enjoyed some success. The obstacle to wider deployment was the prohibitive cost of transferring signals from optical to radio frequency format that electronic devices use. The cost equations have changed, however, and these fiber scenarios now make sense.

Without getting into to much detail, the service can be summed up in one word: Fast. It’s impossible to do a precise speed comparison, however, because cable networks are shared among users, so speeds depend on how many people are online at point in time. Phone networks, however, make much less use of shared infrastructure, so the advertised speeds are more likely to be realized (unless the company is fibbing about its capabilities, of course).

The bottom line for is that local phone, data and video services are becoming highly competitive in general and Long Island is one of the main battlefields for that face off. That's very good news. Long Islanders are best advised to shop carefully. There are billions of dollars at stake, and these companies often are willing to cut good deals--even deals that cost them money--in order to drive subscription roles up and look good to what’s left of Wall Street.