Verizon Fios logo
September 22, 2005|
Keller, Texas, U.S.
|Headquarters||New York City, New York, U.S.|
Verizon Fios, also marketed as Fios by Verizon, is a bundled Internet access, telephone, and television service that operates over a fiber-optic communications network with over 5 million customers in nine U.S. states. The name, Fios, is an acronym for Fiber Optic Service. Service is offered in some areas of the United States by Verizon Communications, while Frontier Communications operates licensed FiOS services in former Verizon territories across six states, using a nearly identical network infrastructure. Fios service began in 2005, and networked areas expanded through 2010, although some areas do not have service or cannot receive TV and phone service because of franchise agreements.
The early stages of Fios began when Bell Atlantic was testing its video service "Stargazer" in 1995. This was the world's first commercial VOD (Video on Demand) service, which was tested to 1,000 homes in northern Virginia. During this time there were talks of developing a fiber optic based service. This service was developed at a headquarters located in Reston, Virginia.
"This will be folded into our deployment of fiber to the curb," Mr. Townsend said, referring to Bell Atlantic's plans to deploy a high-tech fiber-optic system.
In September 2005, Verizon Communications, announced the launch of its Fios television service, which first became available for 9,000 customers in Keller, Texas. Verizon aimed to replace copper wires with optical fibers, which would allow greater speed and quality of communication.
In 2006, Verizon and Motorola partnered to bring its customers home DVR access, which allowed viewers to record and watch television programs simultaneously. In 2006, The Wall Street Journal speculated:
Verizon Communications Inc. is fielding offers for [sale] ... of traditional telephone lines ... part of the New York-based phone giant's strategy to delve deeper into the wireless and broadband arenas, while getting out of the traditional phone business in U.S. areas that aren't slated for fiber upgrades ... Verizon also has been shopping a package dubbed "GTE North" that comprises about 3.4 million access lines in former GTE Corp. territories in Indiana, Illinois, Ohio and Michigan.
In addition to expanding its customer base, Verizon expanded its services in the first few years. Home Media DVR, a digital video recorder, was released in 2006. Fios updated its user interface in 2007, allowing customers to access widgets for localized content, such as weather and traffic. Verizon announced in January 2008 that one million people subscribed to the service. By the end of 2008, Fios offered more than 150 HD channels. Price increases were announced in April 2008, when Fios was available to (not necessarily subscribed by) 6.5 million households.
In January 2009, Fios was available to 12.7 million homes, with about 2.5 million subscribing to the Internet service. As of June 2009 , Fios Internet had 3.1 million customers. Estimates on December 31, 2009, were 3.4 million Internet customers and 2.86 million for Fios TV, with availability down to 12.2 million premises.
Following relatively poor financial results for the wider company in early 2010, Verizon announced in March 2010 that it was winding down its Fios expansion, concentrating on completing its network in areas that already had Fios franchises but were not deploying to new areas, which included the cities of Baltimore and Boston, which had not yet secured municipal franchise agreements. Doug Michelson, an analyst at Deutsche Bank, concluded that "Verizon has been overspending to acquire Fios customers". Some viewed the halt in expansion as a violation of Verizon's agreements with some municipalities and states, since Verizon has collected revenue to deploy infrastructure upgrades that never occurred. In New Jersey, Verizon collected an additional $15 billion in fees from customers and tax subsidies in exchange for promising fiber optic broadband for the whole state. The New Jersey government altered the deal in 2014 to allow Verizon to substitute wireless internet access to fulfill its promise instead. Verizon defended itself, claiming that they had spent $13 billion building fiber optics in New Jersey, about $7.6 billion more than the company anticipated. Critics pointed out that wireless internet was slower and less reliable.
In April 2010, Verizon announced that three million people were subscribed to Verizon Fios. In July 2010, estimates were 3.8 million Fios Internet subscribers and 3.2 million TV subscribers, with availability to 15 million homes.
In May 2013, Verizon announced it had passed 18million homes with Fios and 5 million customers.
In April 2015, Verizon announced that it added 133,000 new Fios Internet connections and 90,000 net new Fios Video connections in Q1, taking its total subscriber base to 6.75 million and 5.74 million, respectively.
Fios TV is one of three services offered by Verizon Fios. Verizon reported 4.6 million Fios TV connections as of the end of 2017. Verizon offers Fios packages with high-definition and standard-definition TV, as well as video on demand. In April 2015, Verizon launched its custom TV packages that allow subscribers to choose between a selection of a smaller number of channels bundled together. By the end of 2015, Custom TV packages accounted for between 30 percent and 40 percent of new Fios TV subscribers.
Fios TV uses QAM technology to deliver signals to a customer's property using its fiber optic cables. At the home, the optical network terminal turns the signal into a radio frequency signal that can be used on a home's existing coaxial cables, feeding the signal to a set-top box. Fios TV's video on demand and interactive widgets use Internet Protocol technology.
Fios Internet was the first service offered under Verizon's Fios brand, and is one of three of the product line's current offerings. The broadband Internet service initially launched in Keller, Texas, in 2004, a year before Fios TV was available.
The service offers several data transmission speed tiers for subscribers. Originally, peak speeds topped out at 30 Mbit/s. Until 2014, upload speeds were slower than download speeds for any given plan, but Verizon decided to increase the upload speed to match the download speed of each tier. As of 2017, upload and download speeds range from 50 to 1000 Mbps, depending on the plan. At 50 Mbit/s, the lowest-tier plan is double the FCC's definition of broadband.
|Download Speed||Upload Speed|
|50 Mbit/s||50 Mbit/s|
|100 Mbit/s||100 Mbit/s|
|150 Mbit/s||150 Mbit/s|
|300 Mbit/s||300 Mbit/s|
|500 Mbit/s||500 Mbit/s|
|750 Mbit/s||750 Mbit/s|
|940 Mbit/s||880 Mbit/s|
In addition to its TV and Internet services, the company also has a voice over IP service via its fiber-optic network called Fios Digital Voice. The service initially launched in Virginia and Maryland in September 2008 and eventually fully replaced an earlier service, VoiceWing, which Verizon offered from 2004 to early 2009.
While Verizon also offers plain old telephone service (POTS), it has been reported in various markets that Verizon physically disconnected the copper lines for copper-line phone service at the time that Fios was installed.
When Verizon Fios was first launched in 2005, Verizon's shares decreased by 4.6 percent while AT&T (which was still technically SBC at the time, as it was still finalizing its purchase of AT&T Corporation) rose by 38.7 percent. Critics argue that Verizon's low prices could put their fiber-optic network in jeopardy, since the cost of building a fiber-optic network could surpass the return from Fios sales. While there has been criticism of Verizon Fios since its launch, there have been many positive reviews of the services. A 2007 report noted the high quality of the service and that subscribers enjoy the fast Internet speeds and high quality HD channels.
On March 10, 2015, at midnight EDT, The Weather Channel and its sister network, Weatherscan, were pulled from Verizon Fios after the two parties were unable to come to terms on a new carriage agreement. The services have respectively been replaced by the AccuWeather Network (which launched on March 13) and a widget provided by Fios featuring forecast content provided by WeatherBug. No public announcement was made regarding the removal until over 12 hours after TWC and Weatherscan were pulled. The Weather Channel offered a less expensive deal to Verizon Fios, which rejected the offer. Verizon cited the wide availability of the internet and mobile apps for consumers to access weather content any time of day as the reason for dropping TWC and its services.
The Weather Channel had earlier signed renewal agreements with major providers that are members of the National Cable Television Cooperative (NCTC), including Time Warner Cable and Cox Communications. While Verizon claimed it was a long-term business decision (instead of a carriage dispute) that it made, The Weather Channel launched a campaign to urge viewers to contact Fios about restoring the cable channel and its services.
In April 2015, ESPN Inc. sued Verizon for breaching its carriage contract by offering ESPN and ESPN2 as part of a separate sports package under its new "Custom TV" service. ESPN's contract requires the two networks to be carried as part of the basic service. Verizon and ESPN reached a deal in May 2016. The terms of the deal were not made public.
On May 19, 2015, Cablevision sued Verizon in U.S. District Court, Southern District of New York, to challenge Verizon's claim that it is 100 percent fiber-based. Cablevision started an advertising campaign to take the case mainstream. The two companies agreed to end the dispute in September 2015. The terms of the deal were not disclosed at the time.
On March 13, 2017, Verizon was sued by the city of New York for violating its cable franchise agreement, which required the provider to pass a fiber-optic network "in underground conduit, along above-ground utility poles, or otherwise--in front of (or behind) each residential building" in the city by June 30, 2014. The city identified approximately 1 million households that were not yet served by the network, including a larger number of outstanding requests than claimed by Verizon, along with allegations that Verizon refused to install Fios in certain areas, and attempted to require multi-family residential units to enter into bulk purchases or exclusivity deals (which violates current FCC policy).
Verizon defended the accusations, stating that it could not install fiber-optic service at all households because they had not yet received permission from landlords. They added that the city did not assist them in drafting neutral letters to request access from landlords for installation, and rejected proposals to increase its use of telephone poles as part of its build-out of the network. The company stated that it planned to invest $1 billion to install Fios in 1 million additional homes, and small businesses, over the next four years. Verizon also stated that its obligation to "pass" all households was based on an understanding that the company would "generally place its fiber-optic network along the same routes as had been used for its copper network and would use similar strategies for accessing individual buildings", and that per these discussions, the agreement did not contain language defining "pass" as meaning that lines would be installed fronting buildings, unlike other cable franchise agreements.