Telecom & Wireless

Verizon's (VZ) Big Headache

Douglas A. McIntyre

Fiber was supposed to be Verizon’s (VZ) panacea. Spend $23 billion and lay down 80,000 miles of wire to 18 million homes.

But, as Fortune points out fiber has one very significant problem: “Bend it a little and the light – and therefore the data – starts to escape.” Opps. Fortune adds: “This intolerance for bending can make fiber optics a nightmare to install in someone’s home”

Corning (GLW) may be close to finding a technology solution to the problem, but it is not there yet.

The hidden cost of Verizon’s FiOS may end up being its installation cost. Getting the product into has many homes as possible as quickly as possible is critical to Verizon competing with the cable companies for voice/broadband/TV bundled packages.

Critical, and, it would seem, more expensive than anticipated.

Douglas A. McIntyre