Big properties tune in - Verizon in the MDU market

Since it began building out its FTTP presence in New York MDUs, the ILEC has been gaining traction with major city properties, including the Trump Properties (Trump Park, Trump Tower and the Upper West Side portfolio).

More recently, Verizon has begun wiring New York University faculty housing with FTTP in Greenwich Village as well Peter Cooper Village, Stuyvesant, and Port Chester (12,000 units), and the Staten Island Housing Authority. Now, Verizon is in the process of going through another larger phase with a few thousand units throughout the five boroughs by the end of 2009.

"We're rewiring the entire city," Lavendos said. "Everyone we did not serve yesterday we're going to serve tomorrow from Manhattan to the Bronx, to Staten Island, Brooklyn and Queens."

The challenge for Verizon is really in developing ongoing best practices, not only in terms of technology but also in dealing with the tenants and building owners.

Perhaps the biggest challenge in targeting MDUs with FTTP is more of a political battle where every service provider, no matter how compelling FTTP is, has to satisfy the building owners and tenants. Cable operators for years had the upper hand as the only video and later data provider in town to MDUs. Oftentimes the cable operators had exclusive deals with MDU owners.

And while doing any kind of overbuild has its various technical and logistical issues, the real issue, argues Mark Lutkowitz, co-founder of Telecom Pragmatics, is dealing with a set of demanding tenants and landlords. That attentiveness to detail is something that Verizon will likely take to other markets for its FTTP MDU deployments.

"They already have cable, they already have high speed Internet so they're going to ask for the world," Lutkowitz said. "They're going to ask for TVs in their managerial offices, ask for TVs in the corridors, and ask them to make sure the paint on the moldings to cover the fiber is the same as the paint on the wall. Verizon has been shocked by the number of demands, but they have the bargaining power and that really is the number one obstacle that can literally take months."

What's helped Verizon in gaining the ear of building owners and making the process move quicker has been the service provider's ongoing roll out of FiOS FTTP in the city.

"There's logistics of anything of this scale as far as the beginning and end of this process from starting a conversation, to wiring a property to actually finishing it up," Lavendos said. "We improved greatly over the last few years on the overall cycle time in going through that process mainly because of the awareness of FiOS has grown so much over the last few years. In many cases around the city, we're walking over bridges already created."

On the high end, the initial success Verizon in developing a relationship with major property owners such as Trump has enabled it to sign up multiple buildings at once.

Verizon is also finding success with subsidized housing projects. Currently, Verizon just signed its first subsidized housing project and it's looking to get into a much larger phase to wire a few thousand units throughout New York.

But for all the success Verizon has had in New York, analysts suggest that outside of New York, they are not as far along with MDU FTTP deployments.

"New York is kind of special in that you have apartment buildings that are attractive such as Trump Towers," said Lutkowitz. "Even in the case of New York where they are going after New York University those are smaller MDUs which are simpler to wire."

Big properties tune in - Verizon in the MDU market