Verizon used the NXTComm conference to announce the expansion of their 50 Mbps broadband service for their entire FiOS footprint. Verizon says the ultra fast broadband service, which also includes a 20 Mbps upload speed, will be available to 10 million homes. The increases in speed also include 20/20, 20/5, and 10/2 Mbps FiOS plans as well. "The Verizon network is delivering broadband speeds that are unmatched by any competitor," Verizon COO Denny Strigl said during an address at NXTComm. Verizon had offered these speeds in limited markets previously. Strigl added, “We've already had successful trials of the 100-megabit home, which will be a reality faster than anybody thinks." FiOS Internet 50/20 Mbps service is available in New York and Virginia for $89.95 and elsewhere for $139.95 a month with an annual service plan. The 20/20 Mbps FiOS Internet service is available in all FiOS markets for $64.99 a month with an annual service plan.

Verizon is gaining the “king of broadband speeds” moniker for these upgrades. But for how long? Their cable competitors, namely Comcast, have committed to DOCSIS 3.0 deployments that will offer comparable broadband speeds. All of these ultra fast broadband plans are more for public relations battles than significant broadband market share gains – at least for the time being. The pricing associated with these service plans are out of reach for most consumers. For now these moves grab the attention and imagination of the industry, but will do little in terms of impact on earnings and market share. In time that will change. Perhaps, it ‘s a leading indicator of the future where 20 Mbps+ speeds become the norm for residential broadband.

Verizon announced a new FiOS TV promotion, the Summer Movie Pass, which offers 90 days of free access to movie channels, four free VOD movies, and a free 90 day upgrade to their Home Media DVR package. The free movie channels will include Showtime, Starz, The Movie Channel, Encore, Sundance Channel and IFC. The Home Media DVR allows multi-room DVR functionality, among other features. The movie feature package is priced at $14.99/month. The promotion ends on July 19th.

Verizon will begin marketing its Flex Double Play Bundle this week which offers wireless service with broadband and/or FiOS TV, and no need for a wireline. The new bundle applies to Verizon’s DSL plans of 3 Mbps or FiOS broadband plans of 20 Mbps. It does not apply to their 7 Mbps DSL or 50 Mbps FiOS plans, or their DirecTV video plans. The bundle provides a discount of between $8 and $20 per month, depending on the services selected. Verizon spokesman Bill Kula tells the Associated Press, “We remain very bullish on the traditional copper-based phone service, but we also recognize that there's a growing segment of society that wants to have wireless as its principal home service.”

AT&T launched a similar bundle without a landline last year. These moves are recognition by larger telecom service providers of wireless substitution. Carriers with wireless and broadband assets are at a competitive advantage, relative to wireless substitution, because they have the option of pursuing customers who want to cut the cord. From a wireline carrier’s point of view, having the ability to serve customers who leave the wireline behind with a wireless product presents a tremendous competitive advantage, especially against competitors who can only offer video and broadband options. We always talk about the triple play in terms of voice, video, and data. We’ll begin to see the context of triple play expand to include wireless, video, and data.

A very interesting competitive development is taking place in the Dallas, TX suburbs. Verizon is apparently preparing to overbuild AT&T U-verse territory with Verizon FiOS service. This is a first, at least that I'm aware of, where large incumbent "baby bells" enter each other's territory with competing landline services. Apparently, the rules have changed, and dramatically so. Verizon appears to be taking advantage of statewide video franchising rules (as Texas provides), and acting as a cable overbuilder, as opposed to a traditional telecom CLEC. The development was reported in this OneTrack post. I guess the gloves are slowly coming off.

This strategy does go counter to conventional wisdom. Verizon is entering the market as the third triple play provider, competing with well established brands (not to mention the DBS competition). Most business consultants would advise against such a move. What does Verizon have up their sleeve? Do they feel that strongly about FiOS and its competitive advantage/differentiation? Perhaps. It will be an interesting test case to observe. If Verizon has some success with this overbuild strategy, will we see it in more territories where Verizon is geographically positioned against AT&T and Qwest? Verizon's purchase of GTE several years ago gives them multiple territories in multiple states that are closely aligned with incumbent AT&T and Qwest territories. Qwest would seem to be more vulnerable, since they have no triple play network of their own. Of course, if Verizon aggressively moves on an overbuild strategy, AT&T certainly won't sit back and wait - they may decide to strike first. I recognize this is just speculation, seeing as the first household in AT&T territory has yet to be lit with FiOS. But this is definitely a development to keep a close eye on. We may be witnessing the first salvo of an historic competitive battle.

Verizon announced an increase in overall channel line up, with emphasis on 25 new HD channels, which will be available this summer. With the expanded HD line-up, FiOS customers will soon be able to get somewhere between 52 and 65 HD channels, depending on their location. New HD channels will include Lifetime, Animal Planet, TLC, Science Channel, Smithsonian Channel, Starz, and Showtime. Verizon also reiterated their commitment to offer 150 HD channels by year end 2008. "The popularity of HD, sports and multicultural content continues to grow, and we're committed to leading the industry in the scope and quality of our programming offerings," said Terry Denson, vice president - FiOS TV content and programming.

In addition to the new HD line-up, Verizon will be adding a new sports channel, Setanta Sports, “… a premium channel dedicated to bringing European and International soccer and rugby to U.S.-based fans.” Verizon says they will be the first terrestial based video provider to make Setanta available, at least at the time of launch. In some regards, Verizon is playing catch up with HD. Its main competitors, Comcast, Time Warner Cable, Cablevison, and DirecTV are actively increasing their HD line-ups as well. It’s a little difficult to say who has the lead among traditional cable companies, because line-ups change depending on location. DirecTV, who by most accounts, has established itself as the overall HD leader. Verizon appears to be up to the challenge, and should their promise of 150 HD channels by the end of the year hold true, they will be more than capable of meeting HD competitive challenges.

Those of us that follow telecom closely recognize that Iowa is somewhat of a unique telecom situation. For a state that is relatively low in population, Iowa has the most (by # of actual carriers) telecom service providers than any state – somewhere north of 130 carriers. So it’s no surprise that Iowa has been identified by the FTTH Council as the state with the most FTTH carriers. Does that make it the epicenter of FTTH? Joe Savage, the president of the FTTH Council seems to believe so, based on his guest column in the Des Moines Register. “While the number of FTTH subscribers in the state is still relatively low - about 41,000 - this number will grow because there are many small telephone companies in Iowa looking to stay competitive. In fact, the state ranks No. 1 in the country with regard to the number of FTTH service providers it has - nearly 40 in various stages of deployment …” says Savage in his column.

Truth be told, there’s a lot to learn from Iowa. These 40 FTTH carriers don’t get the press coverage of Verizon FiOS, but their operational insight and experience on FTTH is quite valuable. You could easily call them pioneers. There is a popular opinion that suggests all telecom carriers will be compelled to offer FTTH eventually. The competitive reality of the marketplace may dictate it and the falling price per port for FTTH (although the construction costs will still be hard to swallow) will eventually justify it. Telecom carriers that follow in the footsteps of these early adopters of FTTH will have a good base to learn from.

Verizon is offering listings for it’s FiOS video service online and intends to expand with more functionality later. FiOS TV Central initially offers VOD listings, local channel and primetime listings, and lists of the most-watched TV shows and top-purchased VOD titles, among other functions. Upcoming features will allow FiOS subscribers to remotely program DVR services and order VOD titles over the web.

They say imitation is the best form of flattery. Verizon must really be flattered. It seems cable companies can't get enough of suggesting they too have FTTH networks, which are better than FiOS. Of course we all know that assertion is false (them having FTTH networks, that is). But I guess in the world of telecompetition, a little false here, a little false there, who is going to know the difference. I live in the Washington D.C. metro area, and Comcast has been running a series of ads, suggesting their "fiber network" is the biggest and best going, even mocking some poor glowing "FiOS character" as insufficient compared to them. BroadbandReports.com has a post discussing Time Warner Cable's latest efforts at confusing customers about FTTH and FiOS - efforts which have landed them in court after being sued by Verizon for false and misleading advertising. To be fair, telcos have done their fair share of bashing cable's product as inferior. With all this competitor bashing going on, you'd think these folks are running for president, not trying to market triple play bundles.

This can't be good for anyone. Confusing the public will ultimately come back to haunt you. It may get you some short term bounce, but last time I checked, deceiving customers has never resulted in sustainable long term gains. The average consumer is already somewhat distrustful of local cable and telecom providers (with the exception of maybe rural independent telcos). These latest marketing stunts aren't going to help reverse this legacy. All involved should stick to the truth (the speed comparison marketing that positions DSL as slow, compared to cable modem is fair game). Telecom, cable, and DBS all have respectable access platforms, which all contain strengths and weaknesses. They're all strong enough to stand on their own. There shouldn't be a need to mislead.

Just as service providers get used to teeing up standard DVR and VOD services as competitive weapons, the new battlefront is already morphing into extending these services throughout any set-top-box connected television in the home. Comcast just announced the expansion of their AnyRoom On Demand service throughout New England. AnyRoom allows subscribers to start a VOD session in one room, and continue watching it in another room. The service is offered at no additional charge. The expansion comes on the heels of Verizon’s expanded effort to position their multi-room DVR product as a leading differentiating service. Multi-room DVR allows FiOS customers to watch and control recorded programs on multiple TV’s throughout the room. Verizon is marketing it as a single home DVR – no need to buy multiple DVRs. See Verizon’s latest commercial featuring NBA star Kevin Garnett below.

These new battlegrounds are setting the stage for the eventual connected home – a home where media of any kind can be distributed throughout to any appropriate networked device. It’s been the subject of many a PowerPoint deck or panel at your tradeshow of choice. We’re not there yet by any stretch, but these deployments are leading indicators of a future to come. Service providers will be challenged to ensure they too can offer these differentiated networked home product portfolios.

An important milestone was reached for the first time last quarter. Telcos like AT&T and Verizon collectively added more video subscribers than DBS providers. AT&T and Verizon collectively added 411K new video subs, while DirecTV and DISH added only 310K. DBS has historically been the leader in new net video subscriber additions for the past few years, mostly at the expense of cable companies. Expect that trend to change. TelcoTV providers will probably take that quarterly “growth crown” for the next few years, as they ramp up their triple and quad play offerings. In fact, as Investors Business Daily accurately points out, telcos haven’t even begun rolling out in the largest cities yet. As they do, their growth rates should accelerate. Verizon’s recent news about offering FiOS in New York City, should it actually materialize, will be a good indicator on the growth impact caused by extending their reach into larger cities.

Interestingly enough, DBS providers are taking a double hit from the telco’s video progress. A good portion of the new telco video adds are coming at the expense of DBS, as evidenced by DISH’s poor first quarter for net new adds. In addition, telcos are slowing down there DBS resale efforts (AT&T – DISH and Verizon – DirecTV), as they ramp up their own video efforts. Those telco resale arrangements have been a good source of growth for DBS providers. As their telco partners get distracted with their own video launches, DirecTV and DISH will have to work much harder to replace those lost resale additions. Part of DirecTV’s strategy is to try to attract higher value subscribers with advanced feature portfolios and more robust HD content packages, hoping their higher ARPU will help replace revenues lost by smaller gains in net new subscriber additions.