Verizon Suspends FiOS in Alexandria; City Plans Google Fiber Application

The city of Alexandria, Va., was told that all cable TV negotiations related to Verizon FiOS service have been suspended nationwide as the company does a review, the city’s director of communications, Tony Castrilli, told us. But Verizon said its FiOS expansion plans haven’t changed. Meanwhile, the city is hoping to become a site for the high-speed Internet testbed announced by Google, Castrilli said.

The city hasn’t received a construction and deployment schedule from Verizon, Castrilli said. The city doesn’t have the legal authority to require Verizon to provide FiOS services everywhere in the city, and the service area will be set in negotiations over a cable TV franchise. The city council voted to give Verizon a telephone franchise in June and then began negotiating for a FiOS TV franchise. But Verizon put those negotiations on hold a few months to do an assessment, Castrilli said. Verizon has told the city that it intends to serve about 65 percent of the city’s residents, the city government said.

Verizon is taking a pause in pursuing new franchise agreements to study and concentrate on the buildout commitments in current franchise areas, a Verizon spokesman said. He declined to estimate when it will resume the expansion. “We don’t have a timetable for additional expansions of fiber optic network.” The company will continue to deploy FiOS where it gets franchises and is on track to reach its expansion goals for the technology, he said. The company plans to pass 18 million homes at the end of this year and expects the cost to pass a home to continue to decline, to $700 a home this year versus $1,400 in 2004. Dave Burstein, the editor of DSL Prime, praised Verizon’s $23 billion investment in fiber but questioned whether the operator would continue the expansion. Some analysts said the company is looking to reduce its spending and is considering seeking government money. Verizon Communications CFO John Killian recently said the company expects to keep its capital spending roughly flat in 2010 at $16.8 billion to $17.2 billion.

After courting FiOS service, Alexandria will go for Google’s fiber pilot program. Google has asked communities to indicate their interest by March 26, and the city is collecting public comments to do that, Castrilli said. Google can help push all providers to offer their best prices for services, the city government said, adding that current broadband providers face little competition. Google can also give Alexandrians a choice of providers that most lack, it said. And a Google network may be up to 20 times faster than current local options and can support uses from distance learning and telemedicine to municipal services and business innovations, it said.