Verizon said yesterday it is in talks to give Internet service providers (ISPs) access to the optical-fiber network it is building to replace...
NEW YORK — Verizon said yesterday it is in talks to give Internet service providers (ISPs) access to the optical-fiber network it is building to replace copper phone lines.
Verizon is talking with several ISPs to develop a wholesale relationship similar to its digital subscriber line offering, Verizon spokesman Mark Marchand said.
To offer broadband Internet service, ISPs lease access to the copper lines from phone companies such as Verizon or SBC.
EarthLink spokesman Dan Greenfield confirmed the ISP was in talks with Verizon and said the parties were hammering out the time frame and rates.
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One difference in a potential new deal is it isn’t federally mandated.
Phone companies are required to lease out their copper lines, some argue at below-market prices, to anyone looking to offer Internet service. As a new technology, fiber optics don’t follow those rules.
Verizon’s FiOS project, which connects the company’s customers directly to the fiber network, will greatly enhance current broadband speeds, and also allow for Internet-based video service in addition to data and voice.
The fiber network is now within reach of 1 million homes, and is on track to encompass communities with 3 million homes by the end of the year.
As a wholesaler, Verizon can add another stream of revenue that will help pay for the costly upgrades.
“It appears to be an opportunity for Verizon to accelerate the return on investment,” said William Power, an analyst with Robert W. Baird & Co.
For ISPs, the relationship allows them to get access to the service so that they won’t be left behind as customers demand higher connection speeds.
Marchand doesn’t believe the ISPs providing competing Web service will be a competitive risk, because Verizon can derive revenue through its phone and video service.
SBC and BellSouth also are working on fiber projects.
SBC spokesman David Pacholczyk said that the company was talking to ISPs but that the conversations have been more general. The company already leases out DSL lines to ISPs, and he said SBC would be open to other deals.
BellSouth spokesman Jeff Battcher said the company was also in talks with the ISPs about its fiber networks.
Like Verizon, BellSouth doesn’t think allowing ISPs to resell fiber-based Internet access will create a larger competitive threat than DSL.