Verizon’s Network

Knowledge@Wharton writes about the high-speed network Verizon has built in the US:

Verizon is betting billions of dollars on a new fiber-optic network that could transform it from a telephone company to a cutting-edge technology player. If Verizon’s “build it and they will come” strategy works, the company could leapfrog over rivals, such as AT&T and Comcast, by offering faster Internet service and potentially richer video on demand. But if its fast network fails to entice consumers, the company will have created a multi-billion-dollar boondoggle.

Verizon’s new network brings fiber optic lines directly to a customer’s house. In theory, this network — the equivalent of an Internet fire hose — would give the company a platform to offer new services such as television and video games. Here’s what makes the network faster: Typically, Internet speeds slow as they get closer to a home and hit a morass of telephone lines (think of a garden hose connected to a straw). To avoid this issue, Verizon is laying the groundwork for what is called a fiber to the premises (FTTP) network — that is, fiber optic lines connected directly to a customer’s residence — that will result in speeds as fast as 50 megabits per second in selected areas. The typical cable broadband connection is about 6 megabits per second. AT&T has a similar fiber-optic network initiative but isn’t running the fiber optic lines directly to homes.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.