Herndon Wired, Ready for Cable TV From Verizon
By Arshad Mohammed
Washington Post Staff Writer
Saturday, November 19, 2005; D01
It took six hours to hook up Jeff Dorman's 50-inch set to Verizon's new TV service but, in the end, he was pleased.
"Drag racing in high-def -- I'm in heaven," the Herndon resident said as he watched Formula One cars zip down a track in crisp color.
Dorman's Herndon basement -- with two computers, two phone lines and a huge TV -- is one of the sites where a new era in telecommunications is dawning. Verizon Communications Inc., a phone company, is unveiling its cable TV service, even as cable companies are marketing Internet telephone technology. The industry's biggest powers are fighting over increasingly wired consumers such as Dorman, dueling to offer them bundled suites of phone, TV and Internet service.
Verizon plans to announce next week that parts of Herndon are fully wired and ready to become the second market in the nation where its Fios TV service is available, offering some Northern Virginia consumers fresh competition and the promise of lower prices.
For Verizon, the cable that it has been laying in Northern Virginia, suburban Maryland and 13 other states is a multibillion-dollar lifeline it hopes will save the company as its traditional telephone business dies off.
But it will be years, if ever, before Verizon turns a profit on its huge investment.
"Verizon is betting its future on Fios," said Banc of America Securities LLC analyst David W. Barden. "The risk . . . is that it is overspending for the reward it will ultimately receive."
It will also be competing with cable companies that have far more TV experience and can add Internet and phone service for less than Verizon is spending on its new network.
Cox Communications Inc., the cable provider in Herndon and most of Fairfax County, dismissed the new service from Verizon.
"What Verizon has been talking about for the past several months is something we have been doing now for well over a year," Cox spokesman Alexander N. Horwitz said. "We believe that we offer a video, voice and data solution that has proven quite popular with consumers in Fairfax County. . . . Verizon is simply playing catch-up."
For Dorman, the single, slender fiber-optic cable that now brings him TV, phone and Internet service is a way to cut his bills by getting all three from one company.
Dorman and his wife, Vicky, expect to buy the services -- which now run them about $260 dollars a month -- for $151.85 plus an estimated $12.30 in taxes, fees and surcharges. They don't know the exact cost, because Verizon has not given them a detailed estimate and they have not gotten their first bill.
"For me it's all about money. I'm not the technical one, but I pay the bills," said Vicky Dorman.
By ordering faster Internet service (up to 30 megabits per second), the family may also finally end conflicts over who is doing what online.
Their current 1.5-megabit-per-second service could not carry Jeff's Internet music trading, the children's Counter-Strike and World of Warcraft online gaming, and Vicky's Web surfing without kicking somebody off.
"I can't count the number of fights I had with my brother," said the Dormans' daughter Stephanie, 21. "It created trauma all around."
Verizon, which first introduced Fios TV in Keller, Tex., two months ago, plans to charge $39.95 for its flagship offer of more than 175 music and video channels. It will charge $12.95 for a basic package of 15 to 39 local broadcast and community channels and $32.95 for a bilingual package of nearly 140 channels.
Cox charges $41.99 for its comparable "expanded basic" service, which has 86 channels; $17.99 for its basic package of 41 channels; and $30.44 for a bilingual Spanish and English service with 31 TV channels 46 music channels.
Verizon has won TV franchises from the town of Herndon, the city of Fairfax and Fairfax County. It is in talks with other municipalities and has begun laying fiber in Anne Arundel, Howard, Montgomery, Prince George's, Arlington and Loudoun counties.
It is an expensive business with many pitfalls.
When Verizon workers arrived on Tuesday to connect the fiber-optic wire to the Dormans' home, they accidentally cut through their own old copper telephone lines. While they were waiting for that to be repaired, they dug another hole and sliced Dorman's underground sprinkler system.
On Thursday, two technicians began hooking up the "triple play" of voice, phone and Internet service. More than four hours later, they were nearly done but the picture on Dorman's prized 50-inch Sony had a black border around it.
It took close to an hour to figure out the problem -- requiring Dorman to get down on his knees to reconnect some wires technicians had plugged in wrong.
Customers in Keller, Tex., said the company's workers had lavished time and attention on them.
"They have done it right. You can see that they must have horrendous installation capital tied up in this deal," said John L. Baker, an American Airlines pilot who recently got Fios TV service.
Baker, and others, said he worried Verizon may increase prices.
"That is going to be the acid test," he said. "You wonder -- are they just pricing the project just enough to get everybody on board and then . . . they start raising prices 5 percent a year and start recovering the tremendous investment they have made?"
Marilyn H. O'Connell, a Verizon senior vice president, said that was not the company's intention, noting that it faces competition from cable and satellite services.
"That's not my grand plan here, to get you in and then creep you up," she said, saying the company was underpricing its competitors to get customers to switch.
"You have got to give customers a reason to move and you can't take advantage of that when you do," she said. "And by the way, they will have an opportunity to go to the competitor -- it won't be like we'll be the only game in town."
© 2005 The Washington Post Company