Verizon to Expand Fios Fiber-Optic Network Into Boston

By Ryan Knutson 

Verizon Communications Inc. said it would expand its Fios fiber-optic network into the city of Boston, one of the major gaps in the carrier's Northeastern footprint.

Many towns surrounding Boston already have Fios, which delivers significantly faster Internet speeds as well as television service. Verizon first started building Fios about a decade ago and has spent more than $23 billion connecting millions of homes in more than a dozen states, but the carrier had been unable to agree with the city to build its network.

Verizon's Boston deal reflects those pioneered by Google Fiber, which builds first in areas where large numbers of people have specifically requested service, rather than across the entire city all at once. Verizon says it will commit more than $300 million over the next six years to the project, which is scheduled to start this summer. The build is intended to cover the entire city eventually.

Meanwhile, two unions representing nearly 40,000 Verizon employees in the Northeast are preparing to strike on Wednesday morning. The unions have been working without a contract since August. In addition to disputes over health care and retirement benefits, the unions are pushing for greater job security. That includes pressuring the company to expand Fios into new cities, thus generating more work.

Verizon said it has no current plans to expand Fios into other cities. The company hasn't expanded its Fios network into a new city in several years.

Verizon said it was unsure whether the Boston project would create new jobs at the company, but it would maintain thousands of positions as a result.

At the end of 2015, Verizon had 7 million Fios Internet subscribers and 5.8 million video subscribers. Earlier this month, it closed on the sale of Fios assets in California, Texas and Florida to Frontier Communications Corp.

Boston officials hailed the Fios deal, noting that about 90% of the city's population has only one option for high-speed Internet, primarily from cable giant Comcast Corp. "Boston is moving faster than our current infrastructure can support, and a modern fiber-optic communications platform will make us a next-level city" Mayor Martin J. Walsh said.

Building first in areas where many people have expressed interest has drawn concerns in the past that only wealthy areas would get service and that low-income sections would fall behind. To counter that, Verizon says it won't ask for a down payment or credit card information from those who express interest in the service. Builds will take place in zones that are economically and demographically diverse, the city said.

Verizon said the investment will also support the company's wireless network because the fiber optic cables would also carry traffic from cellphone towers.

Write to Ryan Knutson at [e-mail]

(END) Dow Jones Newswires

April 12, 2016 17:09 ET (21:09 GMT)

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