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Fiber to the home brings speed, new choices

Running a home-based business got easier for William McKeever last year. Running the home got easier, too.

McKeever's house in Hamburg got plugged in with fiberoptic cable, the same highspeed material that carries the global telecommunications backbone.

Now he zaps graphics to clients almost instantly, even the big files that used to take forever. His kids can play games on at the same time, without slowing down his graphic design business.

"It's just made using the Internet a lot easier," McKeever said. "It's more in the background and not in the way, so I can do the things I want to do."

For about $35 a month, subscribers of Verizon's "FiOS" fiber Internet can download files at 10 million bits per second, far outpacing Verizon's own DSL speeds as well as cable-modem transmission rates.

New telecommunications tools are bringing long-awaited advances to homes in Western New York, and connections like McKeever's are only one example. While Verizon strings fiber to homes in parts of Hamburg and Orchard Park, cable TV provider Time Warner is preparing to sell telephone service over its coaxial wires this spring. And cell phone companies are upgrading their networks for high-speed data, letting mobile users tap the Internet at office-type speeds - or download music while on the go.

> The consumers' link

The new technologies are bridging the "last mile" gap between consumers and the fat information resources of the high-speed Internet, transforming what it means to be online. New technologies bring newfangled services like voice-overdata phone connections and make it possible to use megabyte- intensive applications, like watching video clips.

It's about time, consumer advocates say. Far from being a high-tech paragon, the United States has fewer, costlier highspeed connections than most industrial countries, according to a report by a trio of consumer groups. The nation is 16th in broadband penetration, and over 40 percent of its Zip Codes have one or fewer high-speed providers, said the report by Free Press, the Consumer Federation of America and Consumers Union.

While new communication technologies are springing up, the number of providers is shrinking. A consolidation binge is gobbling up the oldline telecommunications firms that provide the links that most consumers still depend on.

Verizon swallowed MCI last year, eliminating one of its larger rivals for local telephone service. MCI had sold local and long-distance service bundled together over lines it leased from Verizon. AT&T, another former competitor, combined with BellSouth in a deal that regulators approved at yearend.

"The FCC needs to step up and impose meaningful conditions that will salvage what little competition is left," Gene Kimmelman, senior vice president for Consumers Union in Washington, D.C., said in a statement.

"The government has been deceived before by false promises that mergers of potential competitors benefit the public."

> New competition?

For consumers, having new choices in telecommunications means losing some old options. At McKeever's house in Hamburg, his phone works the way it always did - but the line that connects it to the rest of the world is very different. When the old copper wire went away, so did his ability to boot Verizon and switch to a competitor for standard phone service. Competitors don't have a regulatory right to lease Verizon's fiber- optic lines the way they could the copper network.

Regulators are betting that new competitors will emerge with their own technologies to keep telecommunications from telescoping into a monopoly market again.

For one thing, cellular service is spreading, and calling plans with big buckets of minutes are convincing some customers to do without a landline entirely. More than 8 percent of U.S. households have wireless-only service, according to surveys by CTIA - The Wireless Association in Washington, D.C.

Now, cell carriers are beefing up their networks with higher-speed data transmissions with DSL-like speeds, bringing them into the fray for Internet services. Cingular Wireless plans to launch highspeed Internet in the Buffalo region this summer, a spokeswoman said, joining Verizon Wireless which launched highspeed in 2006. T-Mobile sells wireless "hot-spot" service in parts of the region using competing Wi-Fi technology.

Then there's the option of sending phone calls through your cable TV provider. Bankrupt Adelphia Communications held off launching the service, but Time Warner, its regional successor, is preparing to sell voice telephone service over its TV cable in April, regional president Gordon Harp said. Adelphia sold off its cable networks, including Buffalo's with about 300,000 homes, in July.

The voice-over-cable service - which will debut in Buffalo before extending to the suburbs - will complete the "triple play" of TV, Internet and voice telephone services that Time Warner sells in its other upstate New York markets.

Cable phones use data technology to carry voice calls - something many savvy users are already doing over a fast Internet connection. Companies like Vonage sell phone service over Internet to households that have their own broadband data connection.

> Tit for tat

While new players jump into the telephone business, Verizon is gearing up to turn the tables. It plans to sell cable-like TV service over its new fiber-optic lines to homes like McKeever's, perhaps starting this year.

The plan got a boost from a controversial ruling by the FCC at year-end. The new rule requires local governments to speed up their approval process for new TV services and decide whether to award a franchise within 90 days. Verizon and other companies planning new cable services must obtain franchises from thousands of communities nationwide.

The FCC move "will fast-forward the delivery of new choices, lower prices and better services to consumers," Verizon said in a statement applauding the rule. But others aren't as enthusiastic, saying the rule oversteps the agency's authority, and it is predicted to have a tough time this year in Washington.

Because of its slow and costly rollout, fiber-optic TV won't be a big factor anytime soon, analysts predict. Even by 2010, the new competitors will only have 5 percent of the national market, according to Kagan Research in Monterey, Calif.


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