When Verizon first announced their $24 billion fiber to the home project, there was no shortage of critics in the investment community, many of whom thought the act of future-proofing the carrier's network would somehow "doom" them. In reality, investors just didn't have the patience to wait for returns on the investments, analysts like Sanford Bernsteins's Craig Moffett taking every opportunity to thrash the carrier for actually upgrading from copper. In a NY Times piece we covered last summer, Moffett had this to say:

"If I were an auto dealer and I wanted to give people a Maserati for the price of a Volkswagen, I’d have some seriously happy customers," said Craig Moffett, an analyst with Sanford C. Bernstein. "My problem would be whether I could earn a decent return doing it."

Meanwhile, Moffett lauded Qwest for spending little on "next-generation" upgrades whose upstream speeds barely touch 900kbps, praising the carrier for realizing "there is no return to any of this stuff" so they "might as well run the business for cash." Of course as data has slowly trickled in from Verizon, it's been made very clear that the upgrade to FTTH was both essential and profitable. Of the three baby bells and their varying degrees of next-generation ambition, you'll get one guess as to which one has the brightest financial future:

Verizon is the only former large U.S. incumbent local exchange carrier that has positive revenue growth within its consumer wireline segment, indicating, in the estimation of Fitch Ratings analysts, that the company has been most successful thus far, relative to the other large ILECs, in transforming its wireline business. . .Of the three largest ILECs, Qwest has experienced the most rapid deterioration of consumer wireline revenues, with fourth-quarter consumer wireline revenues declining 7.5 percent on a year-over-year basis.

Weird, huh Mr. Moffett? In addition, Qwest is considering selling their fiber long-haul network (quite possibly to Verizon), and there is a good chance that Qwest may not even exist as a company a year from now. Meanwhile, Verizon's cost of fiber installs per home continues to drop, and their new franchise deals with DC, Philadelphia and NYC -- combined with their adoption of Corning bendable fiber for MDUs, means the numbers probably only get better from here on out as the telco pushes into more dense, urban areas.

It's an interesting reminder that what the stock jocks want (short term returns for their clients) quite often doesn't gel with what's really best for either the companies involved, or the consumers they serve.

http://cable.tmcnet.com/topics/cable/articles/54363-more-evidence-verizon-made-right-bandwidth-bet.htm