The thing about the hearing that stuck out for me, was how bot Mr. Bishop and another Verizon spokeswoman said, "portraying Verizon in a negative light was not the way to get them bring FIOS to Baltimore." I think they do a good enough job portraying themselves negatively on their own personally. However that is veiled threat if ever I've heard one. The corporate schmucks are even more out of touch than our government.

Simply saying that Verizon does not redline does not make it so. If it isn't redlining, then what is it?

My guess is that Verizon's cost-benefit analysis for Fios showed too much risk.

Possible problems include:

1) Higher rates of bill delinquency on existing Verizon services in Baltimore City. Why offer more service to constituents who don't already pay their bills.

2) City government red tape (we know there's enough of that)

3) A city environment that is generally unfriendly to businesses

4) Possible additional costs since so much of the city is underneath cement or asphalt instead of burying new lines under dirt or grass.

Verizon isn't stupid. If there's money to be made, they'll try for it. They owe that to their shareholders.

The hearing was a farce. I can't wait for the one that Council will hold should Google take its toys elsewhere.

In response to Upper Fells, I don't entirely disagree with some of the observations, but to simply say that Baltimore is unfriendly to business is not an accurate statement. If this was the case then why is Verizon's regional hedquarters here? Why does Baltimore's business district have more employees than Columbia, Towson, Annapolis, and the BWI district combined? Why did RSM McGladrey just move 300 jobs from the county to the city?

Verizon is a for-profit business that can choose when an where it wants to provide services without having to explain to anyone but shareholders. FIOS is not available where I live in Baltimore County.

Upper Fells your #4 is the bottom line. Only cities that agree to share the cost will Verizon go into. You want me to get permits, dig up asphalt in the hopes that people will subscribe to my service? That's not good business that's a crap shoot.

Verizon isn't pushing FIOS into Baltimore City because it isn't profitable to do it, end of story. I can see why the City Counsel would be bitter that they're blamed for it, though.

I live in an affluent neighborhood right outside of Baltimore City. Verizon put lines on ONE street in my neighborhood (my sister-in-law has FIOS; which is three streets over) and then they left. What is the reason for that? Verizon never answers my questions when I call them!

I spoke to a former Verizon engineer on the matter, who told me that the redlining issue is bunk.

Lower income neighborhoods tend to have higher subscription rates than the higher income neighborhoods. Maybe because premium tv service is still cheaper than most forms of entertainment, especially if there is a family in the home, or maybe there is a question of values in the poorer neighborhoods. Who knows, but statistics show that subscription rates in lower income neighborhoods are higher than the wealthier areas.

I wrote a story about broadband adoption rates in the Baltimore metro area several weeks ago. My research found that, according to FCC statistics, adoption rates in Baltimore were well below rates in surrounding jurisdictions. -gs

Have to agree with Mobtown. Verizon moved its FiOS into a lot of areas that are still developing like Montgomery County and parts of Baltimore County to name a couple, because it's much cheaper to put down lines when communities are being built, rather than having to dig up, lay fiber, and then repair what was dug up. After they saw it was cost-effective, they spread the net. Compound that with lower income households in Balitmore City vs. higher income households in the counties and they get much more return ona much lower investment in growing affluent areas. To think the city is against Verizon illustrates that people have little faith in local government right now. But there is no one to blame but Verizon and the people who decide what is most profitable for them. You won't see FiOS extensively in the city for at least 15 years. And I'm not exagerating. It's just not worth it for Verizon. And to be perfectly honest, don't believe the hype. My parents in NJ have FiOS. It isn't better. It's just another service.

I suspect that Andy's talking about TV subscription rates, not broadband. And, as you know, many variables factor into adoption rates -- including lack of a computer and lack of interest, among others.

Broadband adoption rates don't tell the whole story, because most users of FiOS aren't purchasing the service for the internet access. Most people are purchasing FiOS because it's better TV.

I don't see where Verizon answered why it's avoiding Baltimore. I live outside the city and have FiOS. I think everyone should have fiber to the home. This is 2010. These infrastructure upgrades should have been done long ago! I do like the suggestion that Verizon put statements in its ads that FiOS is not available in the city. My family back in rural PA sees FiOS ads but the service is no where near them. It's weird that they get ads for something not even remotely available.

What Baltimore needs to do next is to start holding hearings on municipal fiber. Verizon pretty much has a monopoly on the fiber business despite Comcast and other cable companies bogus claims they each have the "most advanced fiber optic network". If Verizon thinks their business opportunity is in danger of getting stripped out from under them, they'll get their act together and make a move.

From sports teams to crime rates to education, baltimore's a hole alright, just not of the donut variety. can you blame VZ for not wanting to come here??

Huh? What about the Ravens? -gs

Verizon is a for profit business. They should be allowed to run their business however they want.

However, when I saw their spokeswoman on the news saying that portraying Verizon in a negative light was not the way to get them bring FIOS to Baltimore, it really irked me. What jerks. She said it in such a dismissive and condescending way. Talk about bad corporate citizenship.

Verizon should be mindful that we're not required to be their customers. If they keep treating us like stupid children, many of will be more than happy to stop giving them our money.

How many of you are aware that Verizon has installed FiOS in virtually NONE of Verizon's Midwest territory?

No FiOS in Wisconsin, Illinois, Michigan, Ohio, or most of Indiana. Only FiOS in the entire Midwest is in Ft. Wayne(and 2 suburbs), Indiana.

All of those areas are included in the pending sale to Frontier.

FIOS Internet is actually available in a few areas in Baltimore City. I live in one of the towers in Harbor East and have had it installed for over a year now. But, we're not allowed to get FIOS TV service - the installer told me the City has a franchise agreement with Comcast for cable (which is mentioned in the news post). Why would Verizon take the effort to roll out their service in a City where they can only offer half of their product?

FiOS could get a franchise in the city if it wanted to nobody is stopping them from providing you all 3 services except themselves..Comcast is there because they took over TCI...and fios runs their fiber to your house but they still use your old coaxial cable...there is no difference between any of them its called marketing ...and the city is not on their radar and probably never will be

YOU LIE VERIZON!

FIOS is profitable but there are other things to consider. What is the piracy rate? What is the delinquency rate? How is the state/municipality's relationship with Verizon? Was it pro/con on state franchising?

BTW, if you portray me as a jerk, I have a right to not serve you, or if forced, serve you badly. Wouldn't be the first time I shot down a customer who was not worth the dollars.

I am the CEO of the Baltimore area's largest locally owned and operated Internet service provider and local telephone company. I think I have a unique perspective on this topic. The main reason behind Verizon's decision to bypass Baltimore is most likely technical.  Besides having a larger percentage of land covered by asphalt than its suburban neighbors, Baltimore also has a problem with poles. Normally, aerial construction of fiber is the least expensive deployment methodology. The population density, combined with the fact that most poles are shared by both telephone and power, can make for some very crowded poles. In order to install new fiber, Verizon will likely have to replace a significantly higher percentage of poles with taller ones, and move all of the existing utilities onto these new poles. This can add significantly to the cost of construction, as this "make ready" work can be over $10K per pole. Compare this to the cost of stitch boring through suburban lawns at under $8 per foot, and you can see why Verizon would want to put that expense off until it could increase its take rate in other areas.

It is my opinion that the City should undertake its own open access municipal fiber build. There are around two dozen competitors to Verizon and Comcast operating within the City to provide businesses with Internet and telephone service. For residential customers, that number drops significantly to barely a handful, and the availability of those services is not universal.  The lack of competition in the residential market is evident, as the prices for business service have been decreasing while the prices for residential service have been increasing.  If Verizon were to deploy FiOS in the City, it would result in the elimination of virtually all competition.  Verizon is only required to lease access to its copper network.  Due to a lack of federal regulation, Verizon's FiOS network does not have to be shared with competitors, and they refuse to lease wholesale access to it at any price.  Verizon can reduce the marketplace to a duopoly with Comcast by installing fiber and removing the copper.  This would lead to major price increases for businesses, and even higher prices for residents.  A municipal fiber network that is open to any service provider will bring about greater choice in, and a higher quality of, Internet access, television, and telephone services.

If Baltimore were to pursue its own fiber network, how would it be paid for?  After all, if it costs too much for Verizon to do it, how could the City justify its own build?  Well, one way to do it would be to increase tax revenue by closing what I call the "Centrex Loophole".  Sometime around the middle of the last decade (I can't remember exactly when), Baltimore changed from charging a flat percentage tax on telephone service to a $3.50 per-line fee instead.  Business customers that purchase Centrex service from Verizon only pay $0.35 in tax per line. Centrex service was originally offered decades ago as a way for a business to get private phone system features without buying an expensive phone system. Instead of having a certain amount of phone lines that all employees share, each employee would get their own dedicated phone line. This increased the number of lines a business needed. The advent of low-cost business phone systems in the 80's pretty much eliminated the need for Centrex.  Currently, most businesses with analog phone lines subscribe to Verizon's Centrex service, even though they have their own private phone system installed at their location. They do not use any of the features specific to Centrex (i.e. intercom dialing). They have Centrex because that is what Verizon pushes due to its 3-year contract. These businesses have service identical to a regular phone line, but because it is called "Centrex", these businesses pay 1/10th the tax that a residential customer pays.  Additionally, larger business that have digital telephone service delivered via a "T-1" line pay only a single $3.50 tax per T-1, even though that line will carry up to 24 simultaneous calls.  This happens because of the language of the law. The law says that the tax is levied per "line".  Even though a T-1 circuit has virtual lines, it is charged as though it is only one line because it is only one physical line. So, a business with 400 employees and two T-1 lines pays only $7 in tax to Baltimore.  It's time to close these loopholes and go back to a tax based on a fixed percentage.  Baltimore is leaving millions of dollars in tax revenue on the table that could be funding communications infrastructure improvement.

Closing the above tax loopholes certainly won't pay for a municipal fiber network in its entirety. There are many other communities that have devised various ways to pay for their networks. Some have floated municipal bonds.  Some have introduced taxes.  Some have directly charged residents a flat rate for fiber construction and then provided low-cost long-term financing to bring the monthly payment down to $25 per month. Others are recovering the costs through lease rates to the service providers using the network. I think Baltimore should look at all options and come up with a plan suitable for the City. 

I really hope the City considers building their own open fiber network. I know that we would want to be one of the first providers, if not the first, to offer service over such a network.  I believe that many other providers would participate, and Baltimore could have the competitive marketplace that it deserves. 

Kevin Brown
CEO
Quantum Internet Services, Inc.
Quantum Telecommunications, Inc.
http;//www.qis.net/

I wish the midwest would get FIOS!