Summary
Analysis
The FiOS build-out in such a short period should be at least on a par historically with the construction of the Golden Gate Bridge and the Hoover Dam. Nothing really hampered Verizon’s efforts in getting the job completed. At the beginning, there was almost universal ridicule on the part of industry observers about the FiOS plan. There was a lack of understanding (and still denial by some today) that the real purpose of FiOS was to deliver fiber past as many large business locations as possible. Certainly, Verizon was not going to advertise its true intentions out of fear of retaliation by government regulators. The investment community’s lack of support did not deter the RBOC. When it was negotiating with the unions, it never backed off from its plan (in stark contrast to AT&T which has overused the potential for work stoppage as an excuse to be immobilized). Even the debilitating recession did not really stop Verizon from accomplishing its goal in a timely manner.
As a result of its experience with FiOS, Verizon graduated as a company from a utility to a real business. The best part is that everything it plans from now on is going to be viewed as small potatoes in comparison and very doable according to an established schedule, whether it is 4G, 100G, or a major IP project. Gone is the disingenuous game playing by all of the departments in the corporation that could be observed years ago. No longer is it a case of throwing in everything but the kitchen sink into a budget with the knowledge that it would be cut back substantially at the corporate level. There would not be too much distress because half of the projects were never expected to be done anyway. Now it is a mature process in which parts of the company submit what they actually want and need. It is based on the experience of realistic planning with FiOS – that it could actually pass 3 million houses in a year – it was a matter of going out and doing it.
From now on, everything will be based on practical considerations and there will be commitments to be carried out. There will no longer be a pledge and then, “Well, we will phase it in” or “we can’t do it this year as much as we wanted to” for whatever reason.
This new way of thinking can be observed on the wireless side of the house as well. Verizon Wireless pretty much stayed right on target with upgrades and feature/functions on 3G and EVDO. With 4G, Verizon is being methodical and cautious with its rhetoric. It is only going to start with a couple of cities. From there it is going to do a fast build-out and ramp us as quickly as possible. However, there is no talk about 4G working everywhere in its traditional territory, yet.
Another great influence on the present Verizon philosophy has been the ex-MCI. While MCI got carried away with future technology discussions and had a poor record in terms of buying quality equipment, it nevertheless had an impressive record of coming through with its construction plans.
Samuel Greenholtz consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
