There's no question that Verizon Communications hit a home run with its aggressive fiber strategy.
Fios also has helped future-proof Verizon's network. While its cable competitors buckle under the pressure of peer-to-peer traffic on their networks, Verizon has enough capacity in its network, thanks to its fiber upgrades, to weather the storm unscathed and work on its own timetable to find more efficient ways to handle peer-to-peer traffic.
Mark Wegleitner, Verizon's senior vice president of technology in charge of broadband and consumer services, has helped develop and drive Verizon's fiber strategy. I sat down with him at the Nxtcomm trade show in Las Vegas last week to talk about a wide variety of topics, including the controversy over Comcast's treatment of BitTorrent traffic, faster speeds for Fios, and what the company plans to do next when it reaches its 2010 goal of passing 18 million homes with fiber.
Below is an edited excerpt from that conversation. Feel free to share your thoughts after in the "TalkBack" section.
Q: As you know, Comcast got caught slowing down peer-to-peer traffic on its network. As a network provider yourself, do you think it's necessary to manage your customers' traffic?
Wegleitner: I think we can come up with scenarios where network management would be necessary. While there might be plenty of bandwidth out there, you can't really guarantee that you can get an error-free transmission of, say, a video file that will be guaranteed at a specific point in time. That is why you might need rational network management.
So what would you consider to be acceptable network management?
Wegleitner: It's still a work in progress. But it's important to ensure the capabilities of applications.
But is it acceptable to identify and slow down specific types of traffic like BitTorrent or other peer-to-peer applications?
Wegleitner: Well, it's sort of a glass-half-full situation. Degrading traffic for one application enables another to work better. But we have to allow people who use the peer-to-peer applications for lawful and legitimate purposes to do so.
Verizon is working with several peer-to-peer companies to find ways to use the technology to distribute content more efficiently. How can the P2P protocol benefit service providers like Verizon?
Wegleitner: Peer-to-peer is a distribution enabler. But often when people talk about P2P, it gets lumped into a category with things that are bad, mainly because it takes up so much capacity on the network. But whether it's a good thing or a bad thing, there is underlying technology for P2P that can be used to everyone's advantage to get content like video, which everyone is asking for, distributed in the most efficient way.
We conducted some tests with the P4P group and Yale University, and showed that customers have a better experience, and we use fewer resources, when we used the P2P technology. It's really a win-win situation for us and the customer.
And we're still working cooperatively with P2P companies and the rest of the folks in the P4P group to employ the technology in a way that would maximize its impact.
Verizon has said it expects to pass 18 million homes with its Fios fiber- to-the-home service in 2010. Where are you guys in that deployment?
Wegleitner: I'd say we are slightly ahead of schedule for homes passed. But in general, I'd describe us as on schedule. We will have 12 million homes passed this year, which is the goal we had previously stated.
Verizon announced recently that it's increasing the speed of its Fios service to 50Mbps on its high-end tier of service. How much faster can the speeds on Fios get?
Wegleitner: The original specification for the Passive Optical Network, or the FTTP network, we are using allows us to provide 100Mbps to the home. So that's probably a reasonable ceiling, given the current technology. But we are also deploying GPON, which is an enhancement to the original fiber technology we're using.
The specification for that calls for 200Mbps to the home, with 400Mbps peak utilization. But we'll probably see the next generation of technology allow us to deliver between 125Mbps and 175Mbps to the home. We are working with suppliers for that technology to go even faster. But 100Mbps is within range, and we could even go a little higher.
Are people really using the 50Mbps service?
Wegleitner: Under specific circumstances, transferring files at 50Mbps is better than 10Mbps. The key here, though, is concurrent use. In the old days, when you had one PC, there probably wasn't much need for these kinds of speeds. But now there are multiple devices connected to broadband in the home. And that number is only going to grow. So it's important to have the performance there.
Verizon has begun selling a bundle that includes Verizon Wireless service and high-speed Internet and video, and no home phone line. How long before you think that the old landline telephones will be obsolete and will disappear altogether?
Wegleitner: In the broadband world, voice service is a small increment of traffic, in terms of bandwidth and cost. And in a converged world, we can give people who keep a voice over Internet Protocol (VoIP) landline a rich set of features. So I don't know that it won't be a useful service for a large portion of the population. I don't think the last chapter has been written on voice yet.
So when you talk about new voice services, are you talking about offering unified communications in the home?
Wegleitner: Yes, we can offer a unified communication experience in the home today with point solutions. And we have run way left for more sophisticated and converged services.
When will we see these services?
Wegleitner: We can already provide the ability to forward calls. But the find-me and follow-me services haven't caught on as rapidly as we thought. Sometimes the first time an application comes out of the shoot, it doesn't catch. But then later, it does. I don't think we've created enough selection or a compelling-enough template to drive mass-market adoption of some of these services yet. But that will come. I don't think we're talking more than a couple of years away.
Verizon's original Fios plan goes through 2010. What happens after that? Will Verizon continue to deploy fiber to more customers in its footprint, or will you focus more on DSL?
Wegleitner: I think there is more gas in the engine for fiber-to-the-home beyond 2010 that will help us get into the remainder of households in our footprint. Will we cover all the homes in our footprint? Probably not.
In the lowest-density areas, it's hard to justify new wireline deployment. And technically, DSL is available over copper. But it has limitations on long loops. Wireless solutions are attractive in these rural areas. We are looking at options in that area. But it's worth noting that even many of the small towns in our footprint are still within miles of a city center. So it's only about 30 percent that is out in low-density areas.
Would Verizon use LTE or WiMax to provide wireless broadband in those rural areas?
Wegleitner: Well, LTE is the horse we are riding right now. So that will likely move to the head of the line, in terms of the high-speed wireless-broadband data service we'll offer. We are already offering direct broadcast satellite for video delivery where we aren't offering Fios TV. So we could pair DBS with wireless data to also offer a triple-play offering in those rural areas.
Some of your cell phone competitors, such as AT&T and T-Mobile, are using Wi-Fi in different ways to extend their broadband networks to public hot spots. T-Mobile is actually using it to augment its cellular voice service. Will Verizon use Wi-Fi?
Wegleitner: We might see Wi-Fi used in the home to provide multiple device interconnection. Right now, we are using the Multimedia over Coax Alliance (MoCA) cable standard to deliver connectivity using the existing cable infrastructure in the home. But we could use other kinds of connectivity in the home, such as Wi-Fi or power line.
But as far as offering Wi-Fi in hot spots or covering whole communities with Wi-Fi, we've tried it. We provided Wi-Fi in Manhattan, but we no longer offer that service.
I remember that. A few years ago, you guys turned your existing phone booths in Manhattan into Verizon Wi-Fi hot spots. But when you rolled out EV-DO service, you shut down the Wi-Fi hot spots. Why?
Wegleitner: The economics just didn't pan out. I think right now, the primary horse we are betting on will be 3G and 4G solutions for wireless.
Speaking of 4G, there's been so much talk about moving to the next generation of wireless networks. What do you see as the biggest challenges in building and running the next-generation broadband wireless networks?
Wegleitner: One challenge will be the sheer number of new devices on the network. It's a double-edged sword. There's more capability for end users, but it also means that the network provider has to understand these capabilities. There's not going to be a common denominator, so we will have to be able to identify and recognize the devices and their capabilities, and adapt to it.
The other thing is that we'll need additional management for all these devices. We'll have to be able to localize problems, identify them, and be able to fix them. And we'll have to make sure we can do this at a reasonable cost.