The great Verizon FiOS ripoff
After decades of demanding and getting rate hikes and tax breaks in return for promising to deliver broadband internet access to schools, libraries, hospitals and every home and business in their territories, Verizon is now making it clear that it is no longer expanding FiOS, its fiber optic cable service.
So what did they accomplish? What did they build? And how much did it cost? Verizon claims that the company spent $23 billion dollars in rolling out FiOS since 2004. (See, for instance, this message from Tim McCallion, President of Verizon’s West Region.) That's a lot of money.
But as I stare at a decade’s worth of Verizon annual reports, I notice something odd. Where, exactly, is that $23 billion? Specifically, where are the construction budgets to support this claim?
This chart shows Verizon’s construction budgets for 2000 through 2011, taken directly from the Verizon annual SEC-filed reports. It also shows an imaginary “FiOS Bump” -- about $3.8 billion dollars per year in addition to the baseline that should have been spent annually over a 6-year period if the company had really been paying out $23 billion dollars for the construction. But the numbers show no bump in construction for FiOS; no major increases in capital expenditures in general. In fact, Verizon, on average, spent more on construction from 2000 to 2004 than from 2005 to 2011.
http://www.niemanwatchdog.org/index.cfm?fuseaction=background.view&backgroundid=631
A N.J. state commission report from June 2010 saw this coming, and noted:
"While it is possible for Verizon to extend service throughout its authorized territory, to an additional 155 municipalities in the state that are not included in its current application of 369 towns, Verizon has indicated it will now concentrate its capital expenditures, expected to be between $16.8 billion and $17.2 billion in 2010 on its wireless telephone network. Further FiOS expansion will be limited to increasing penetration in those communities where FiOS is currently available, according to the company."
(The $16.8 and $17.2 billion are the companies’ total annual construction budgets, not New Jersey only.)
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It has a very low take rate. EXTREMELY low take rate for the investment.
Is it more profitable to invest in the cloud/home extender/LTE or FIOS?
If the Land Line folks aren't selling FIOS - then . . . The focus has to go to Wireless . . . 
yet again. Consumers simply don't want the FIOS product. And look at this - Wireless folks don't even get a discount on it. My triple play is with Cablevision - even though FIOS is available in my town/area - because it's a better deal in terms of my monthly budget.
Step back and put all the nuts and bolts together - why do you think Lowell is pushing back on the Union? Just to be a dick?
Or does he have wireless organization that is maxed out in terms of our work load - and he's probably more afraid of us simply not coming to work one day because we get hit with yet ANOTHER raise in our personal cost for health insurance - than he is the less profitable side of the house.
Tough - very tough . . . This is why if you research my posts I'm really pro the Union and state - the best way to help them is to go buy FIOS. Plain old telephone service doesn't really make money anymore - FIOS is its back fill. But - again - consumers - seem to want to stick with Time Warner, Cablevision, Comcast, etc. etc.
Just because you build/make something doesn't mean people have to or WANT to buy it.
Leveraging his time spent in the Navy . . .Note: He was executive vp and coo for the Wireless team. It just might be where his heart is. 
And having worked under him - he never asked anything from the Wireless team that he wouldn't do himself - or hasn't done himself.
There are HUGE culture clashes within the organization that are in play here.
On the one hand - people like me - who have had to work 60 + hours a week - writing Welcome SMS messages for global travelers at 2 AM in order to get it launched on time. Or the Device Launch person who has to stay very late reviewing a Moto user guide because they just pulled the launch date in by three weeks. Or the Global Customer Service Manager - who never truly gets a day off (24 x 7 x 365 day a year business).
What you are seeing - because you ARE a veteran of this business - is the move from a Public Utility (pots) to a Techie Retail environment.
Truthfully? I agree on pots. Seriously - let it go at a song and make it a Federal Government service. BTW - started at Frontier comm in the 1990's - got swallowed up by the Glotanic (Global Double Crossing) as part of the Carrier group. Not NEARLY as contentious as that was with people throwing mugs and laptops at each other in meetings - but we're probably not that far away from that level of toxic in our work environment.
Wireless is tired. We're tired of working hard, footing the bill for everyone else (let's talk about that calling card business down in VA *sigh*), and hearing that it's never enough. Not just from teams such as landline that don't carry their own water - but the consumers/American public who do not realize the total inequity the wireless teams are subjected to.
If we could at least not HAVE TO see people roll into work at 9 AM, go to breakfast for 45 minutes, answer a few emails, go to lunch for 45 minutes, the gym for an hour, then roll out by 4 PM - it would make the environment tolerable. The idea of a lunch break to a wireless employee is insane. What is lunch? What people do in the banking industry? The wealthy and affluent? Or just our peers in buildings 1, 2, and 3?
No answer - but I know FIOS - if handed over to a Wireless Task Force Marketing Team - could be profitable in three quarters. One to deconstruct the business model, craft a marketing plan, and execute to delivery. One quarter to allow Marcomm and PR to work their magic. And one quarter to get the sales and service teams up to par.
But because there is such a resistance to us 'young punks in building 6 and 7' -it's not going to happen. When someone like me (who relaunched what ended up becoming one our highest ARPU products) is telling them to get rid of the effing 2 year plans - I mean it.
If it's a 'burden' to the wireless consumer - why isn't that seen as a detraction to the landline consumer? I think it is - but the consumer isn't cognizant of that. It's other reasons - but I think it's those two year plans. Another thing - Add in bundles of International Long Distance from the landline. This could kill the wireless service - because wireless has the hand off cost. My husband is from Italy and calls Germany and Italy on a daily basis. Many of our neighbors hail from Poland, Estonia, Pakistan, Egypt, the Caribbean, Paraguay, and India. We have a very diverse complex. The cablevision sends people around to help sell us on their ILD bundles.
Seriously - you can't beat it. We were still using my ILD discount on wireless to call abroad in February. Between Skype over Cablevision internet and and our ILD bundle - our monthly international bill dropped $80.
Change the business model - change the take rate. Make landline profitable - or just sell it cheap to the Fed.
Take the burden off Wireless.
Happier employees all the way around.
