Mark Wegleitner, Verizon's chief technology officer, has been championing this strategy for the past three years. The network, called, takes fiber directly to the side of people's homes and provides near-limitless bandwidth that can be used to deliver a "triple play" of services including high-speed Internet connectivity, telephone service and TV. The company already offers Internet service that runs at 50 megabits per second. And it's testing service at 100Mbps.
The largest phone company in the U.S.,, only deploying fiber farther into neighborhoods and using existing copper to deliver it the "last mile." Wegleitner and other Verizon executives were adamant that a fiber infrastructure, in the long run, would be better. Critics of the strategy said that the budgeted $18 billion to build the network was too expensive. But with more than 1 million Fios Internet customers and nearly 500,000 Fios TV customers signed up, it looks like Verizon's strategy is working.
Wegleitner recently sat down with CNET News.com to explain why the company chose this, and where he expects the company to go from here.
Q: You and AT&T are upgrading your networks to deliver TV services so you can compete against cable operators. AT&T has chosen to take fiber to the curb or neighborhood, but Verizon is spending billions to bring it to people's doorstep. Why?
Wegleitner: There are pros and cons to every technology. In our analysis, we saw that bandwidth demand seems to be going nowhere but up. And we think in the future that more people will be using Internet technology concurrently. It won't be just one PC surfing the Web to check a flight status. More people in the home will be online at once, and it will be . The Internet will become the delivery mechanism for entertainment, especially video and other related entertainment. So we needed to develop a network that was robust and flexible. And we wanted to put in a physical infrastructure that we wouldn't have to dig up for another 15 years. We came to the conclusion that fiber-to-the-home was the only infrastructure that would give us the necessary headroom.
So do you think AT&T's strategy of extending fiber loops only as far as the neighborhood and using existing copper infrastructure to deliver advanced DSL services was the wrong choice?
Wegleitner: I wouldn't say that AT&T has gotten it wrong. DSL is a good technology. Our concern was more about what happens a few years out. And that's why we picked fiber. And I can't really predict how other technologies will grow, but we know that fiber gave us the headroom we needed.
I just want to make it clear though, I think AT&T is on a path that has a lot of promise. As I said before, there are pros and cons to every technology. And we weighted some of these things differently than they did. We also didn't want to wait for theor the VDSL 2 technology to mature. BPON technology (which is the technology used to deliver data over fiber) was already pretty well understood. And that also factored into our decision process.
Right now, Fios TV is based on a hybrid of technologies. It uses IP to deliver interactive services like video on demand, and regular broadcast programming is delivered over what looks like a traditional cable infrastructure. But you've said that you see this overlay broadcast network eventually going away and Verizon will use an all-IP network to deliver all video. So why move to IP if what you're doing now works?
Wegleitner: There are a few reasons for us to move to IP. It brings certain capabilities that aren't as easily provided through a traditional linear network. The classic example that's used for IPTV is offering multiple camera angles for sporting events. The other thing is that IP will allow us to offer a nearly unlimited number of channels and content packages. And because all this content is delivered over a homogenous network, it makes it easier and cheaper to add new content and services. It's also easier to manage.
Wireless and cellular services are very important. How does wireless fit into Verizon's overall strategy as it relates to Fios and TV?
Wegleitner: Well it starts with the fundamentals, like allowing your cell phone to act as a sort of remote control for the TV service. We are adding that capability to our latest version of our Fios TV service. It's in beta right now, but we'll make a formal announcement about it later this summer.
Right now, our cell phone customers and TV subscribers can get some common content through VCast. And eventually there will be some transferring the experience from theto the cell phone. But I think the big question that is yet to be answered is what kind of content people will want to view on their cell phones. Do they want to watch an entire movie? In theory the sky is the limit, but customers will determine what services actually make it to market.
Verizon's goal has been to deliver 100 megabits per second to the home. How close are you to making that a reality?
Wegleitner: In many states the highest download speeds we offer are 50Mbps and uploads of 5Mbps. We have a few trial customers, who are Verizon employees, now testing the 100Mbps service. The trial is going very well. And that is with the BPON technology. We're also deploying GPON, which will quadruple the available bandwidth, so that will make delivering 100Mbps even easier.
When do you think people will need 100Mbps in the home?
Wegleitner: Well it depends on how many devices you have and what everyone in the household is doing. It's not inconceivable that people would have three high-definition TVs in the home, and that they would want to watch programs in HD on all three at the same time. And then you might have a couple gamers. Then you might throw in some Internet surfing. Plus you add voice over IP phone calls, streaming video and maybe video conferencing, and it adds up to a lot of bandwidth. So people could need it sooner than you expect.
There is so much new technology available to consumers, but do you ever think that the experience has just gotten too complicated? And that all this stuff is just too cumbersome and complex for average consumers to use?
Wegleitner: We've invested a significant amount of money and effort into creating a user-centered design. We look at everything that goes in front of a customer. We do the usual interview where we bring them into a lab, hand them a box and ask them to follow directions. Then we apply the feedback we get to eliminate any unnecessary instructions.
We really try to keep things as easy as possible. And if the network can find some piece of information on its own, we do that instead of relying on people to type in information. Also if hiding complexity in the network is viable, we do that. We don't want to add another box or force someone to configure something on the network.
So from your perspective, something like a network-based digital video recorder that would eliminate the need for a subscriber to have a box to record and store recorded programs, could make sense?
There are a lot of digital rights management concerns that still need to be worked out. And we are watching closely how this issue is dealt with by the cable industry. We need to look at how the technology can be adjusted to accommodate concerns. But in general, I think all parties involved need to get together to come up with a solution that meets customers' requirements, instead of polarizing and delaying what could be an attractive capability.