Company plans to use fiber-optic lines to better compete with
Cablevision in offering TV and Net services
BY HARRY BERKOWITZ
In a new competitive threat to Cablevision's cable-television and
Internet services, Verizon Communications yesterday announced it will
string fiber-optic connections directly to homes and businesses in
parts of Nassau, Westchester and Rockland counties.
The connections will replace copper-wire links and allow Verizon to
offer cable TV and faster Internet access. The company said it expects
to start marketing cable services next year, including high-definition
TV and video-on-demand, and is already negotiating with Viacom and
other programmers for content.
"I expect that next year we'll not only be in the video business, but
we will be a significant competitor to those that provide cable TV
services today," said Paul Lacouture, president of the Verizon network
Verizon added parts of six states, including New York, to the
previously announced three where it had said it is rolling out the
connections. The company said it will hook up these areas, totaling 3
million homes and businesses, by the end of 2005 and more in following
"In suburban New York City, Verizon vs. Cablevision is likely to be a
major battleground, testing whether Verizon is able to put together a
cable-like video package that is competitively and economically
viable," Merrill Lynch analyst Jessica Reif Cohen said.
Cablevision Systems Corp. has 3 million cable customers in the New
York City metro area, including the three counties that Verizon is
"We compete vigorously and successfully with the phone company today
and expect to in the future," said Cablevision spokesman Jim Maiella.
Regional telephone companies have tried to add video services in the
past but largely gave up in the face of heavy expenses and
difficulties attracting customers. This time, the new technology that
makes video possible is needed anyway to improve phone and Internet
service, Lacouture said.
Verizon is spending $800 million on the overhaul this year alone. It
is targeting affluent suburban areas, where overhead lines, rather
than more expensive underground ones, will be replaced and where
customers are more likely to bite.
Verizon did not say how much it would charge for video service. It
will charge $34.95 or more per month for Internet access that will
reach download speeds of up to 5 megabits per second, more than triple
the old speeds it has offered, and $44.95 or more per month for speeds
reaching 15 megabits per second. In a year, it will have the
capability to offer speeds of up to 100 megabits.
Cablevision charges $44.95 for its Optimum Online service, which has
1.2 million customers and speeds up to 10 megabits per second.
Cablevision also has started competing with Verizon by offering
Internet-based phone service called Optimum Voice, which had signed up
115,000 customers as of June 30.