Verizon Communications, the largest U.S. local phone company, will begin selling video over fiber-optic lines to homes and businesses in 2005, part of a long-term strategy to fight cable companies on their own turf before they erode too much of Verizon's traditional telephone business.
While the first video services that Verizon will offer will mimic those available from cable and satellite television services, Verizon executives told Reuters that the company will eventually move into higher-technology formats that could offer far more options to viewers.
Verizon outlined the plans as part of its strategy to spend $1 billion on laying the foundation for a fiber-optic network connecting homes and businesses in nine states. The company has committed to making the new network available to one million homes and businesses by the end of the year, with another two million added next year.
The company said it would launch its fiber-optic service by offering voice and high-speed Internet connections, including one with download speeds of 30Mb/s per second, about 10 times faster than the fastest cable high-speed links.
While those services will be available this year, Verizon executives said it would likely be the second half of 2005 before its video-over-fiber business was up and running. The company must get cable franchise licenses, as well as arrange agreements with cable networks.
Bob Ingalls, president of Verizon's retail marketing group, said while Verizon's first video services will look like cable, the fiber optics will allow it to expand to new services, including HD channels.