FiOS' Future Depends on New Broadband Applications

In many ways, the long-term success of FiOS will depend on what new services are developed that will take advantage of the vast bandwidth of the fiber and how much customers will pay for them. Despite prices that average well above $130 for a bundle of Internet, TV and voice services, 20 percent of the homes where FiOS is available have signed up for its video service, and 24 percent buy the Internet service, which offers speeds up to five times faster than cable competitors. Still, it might be a decade before anyone really knows whether Verizon's bet on FiOS is a smart investment in the future or a multibillion-dollar black hole. The company has had to spend more than it would like on advertising and expensive giveaways, like flat-screen TVs, to get new customers. Comcast and other cable companies are preparing to bolster their own Internet speeds and digital offerings. FiOS has been particularly popular among the more sophisticated customers attracted by higher Internet speeds, said Karl Bode, the editor of BroadbandReports.com. "Deliver quality technology and cutting-edge speed, and customers respond," he said. "I'm preparing to move into a new home, and FiOS availability actually played a part in where I was willing to move. And I've probably been one of Verizon's most outspoken critics over the years."