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Verizon, like all local phone companies, faces a major problem: The skinny copper wires reaching into every home and office can only provide a limited amount of bandwidth. For a company that wants to move to an all-IP network and offer a variety of high-bandwidth services, it knows that it has to spend vast sums of money to install bigger pipes throughout its service area. That means the company is putting more fiber into its diet.
"We've got to focus on not operating like a telecom company of 1985, but operating like an IP company of 2006 and beyond," chief technology officer and senior VP Mark Wegleitner said Thursday at the Next Generation Networks conference.
Just last week, Verizon began rolling out a 180-channel broadband television service as part of its next-generation Internet offering called FIOS. The company plans to accelerate moves into the voice-over-IP market, including offering more managed-VoIP services. And it wants to offer consumers as well as businesses high-speed data services that operate at speeds of tens of megabits per second.
It plans to do all this by changing its network, switching out today's copper phone lines and deploying faster, more capable optical fiber. "In the end, the objective is to get rid of the copper and have all fiber," Wegleitner said. The goal is to converge all new products onto a single IP network, leaving the parallel voice, wireless, data, and video structure behind. This would get rid of redundancies and increase efficiency within Verizon's overall network.
This is a giant task, even for Verizon. For example, Verizon's various application silos all have to be reconciled for the converged system to work. And the company is spending billions of dollars to deploy fiber, overlaying the optical technology over existing copper lines. "I don't think that it should be a race to reduce copper," Wegleitner said after the talk. "But we don't really see a better path to future-proofing."
The company feels fiber is the best way to grow its $71 billion in annual revenue, 50 million land lines, 47.5 million wireless customers, and 4.1 million broadband customers in the near future. The forthcoming acquisition of MCI, the nation's second-largest long distance company, will only compound these numbers. "It will be a quantum jump for us in terms of scope and scale when [MCI] comes on with us," Wegleitner said.
Verizon knows it faces tough challenges, but it plans to overcome them with two key technologies: fiber optics and IP networking. Only time will tell whether it can deploy those two fast enough to fend off competitors.