Verizon FiOS Says No To Syracuse

Today, the Syracuse Post-Standard reported that Syracuse will not get Verizon FiOS service. Verizon may provide FiOS Internet service to parts of Syracuse's eastside where the buildout is apparently more complete. But it won't pursue a Video Franchise with the city, so TV service will not be available.

How does this impact SMBI? The publicly-owned FTTH strategy of SMBI was conceived from the beginning to provide community control over prices, service options, and infrastructure investment. In the process, it would minimize prices and maximize services, creating extraordinary competition against Time Warner Cable and Verizon. Also from the beginning we thought deeply on how to compete against Verizon FiOS. It was our conclusion that we could compete successfully against Verizon FiOS that convinced us to pursue the initiative.

Whether or not Verizon provides FiOS service in Syracuse does not alter SMBI's plans or outlook for success. One thing that should be somewhat easier is the sale of revenue bonds, mostly because lenders may be less reluctant to lend if we are not competing against an existing FTTH network (i.e. we will have technical superiority). Regardless, we have conceived some innovative ways to secure financing; so this is not a concern.

On the other hand, successful competition against Verizon FiOS by a public FTTH initiative would be a first in the nation, and would provide proof of concept and a model for all municipalities to emulate. It is a bit unfortunate that this opportunity will be precluded by Verizon's revised plans.

Verizon is halting it's FiOS expansion for now. But it is likely temporary because fiber networks are far faster and cheaper to build and maintain today than copper networks. However, if we establish a publicly-owned FTTH network in Syracuse soon, i.e. before Verizon FiOS, we will more easily subscribe the vast majority of the market, minimize our cost per subscriber, and offer such low prices that Verizon wouldn't bother trying to compete with us. Competition would be too great; the investment not worthwhile; better investment opportunities elsewhere.