March 9, 2006 3:13 PM PST

Verizon to use new tech to slash costs

Verizon Communications hopes to reduce the cost of installing its Fios fiber-to-the-home network by using existing cable wiring in homes to access high-speed Internet, IP telephony and IP-based TV services.

Later this year, it plans to use new technology from the Multimedia over Coax Alliance (MoCA) , an industry group that promotes using coaxial cable installed for cable TV to transmit broadband around the home. The organization says that its technology supports speeds up to 270 megabits per second.

Because most homes already have coaxial cable installed in several rooms, Verizon can significantly reduce its Fios installation costs by using existing cabling to connect home computers to its broadband service. Today, Verizon installs Category 5 cabling for customers who have signed up for a year of broadband service free of charge. Customers choosing a month-to-month plan, must pay $69.99 for the installation.

In 2005, Verizon spent about $1,200 per home to connect customers to its fiber network, Verizon President Lawrence Babbio told investors at a conference in New York in January. This was in addition to the $1,400 per home the company spent digging up neighborhood streets and stringing fiber on telephone poles.

Verizon hopes to reduce these costs significantly in 2006. Specifically, it plans to cut the cost of laying new fiber in neighborhoods to $890 per home and reduce the cost of home installation to $715 per home, Babbio said.

MoCA technology is just one way the company hopes to reduce costs.

"Eliminating the need to install new cabling is one way to cut costs," said Mark Marchand, a spokesman for Verizon. "But in general we're learning how to do things smarter, faster and better, which should also help us reduce costs."

Verizon already uses MoCA to deliver its video-on-demand service to Fios TV customers. Verizon uses traditional broadcasting technology to offer the bulk of its TV service, but it uses Internet Protocol to offer video on demand. Using the MoCA technology, IP video rides over the same cable as the traditional broadcast signals.

Several industry groups are looking at other technologies to distribute broadband. The HomePlug Powerline Alliance advocates using electrical wiring to carry Ethernet signals, turning every electrical outlet into a network jack. The Home Phoneline Networking Alliance is pushing for copper phone lines to carry data through the home. And then there's wireless, with companies such as Ruckus Wireless adapting Wi-Fi for broadband video.

Marchand said Verizon is looking into all of these options. But it hasn't committed to using any of them except the MoCA technology.

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