SkyFILES: An Uneasy Milestone
by Michael Hopkins

FiOS TV from Verizon is nearing the half-million mark.

That was the message this week from the telco about its fiber-supported video product. In addition, the high-speed internet portion of the FiOS offering now reaches 1 million customers.

While cable is ready to address the threat with technology, and DBS is putting together competitive plans of its own with items like HDTV, there are those who never gave competitive telco video services a second thought. But take a look back a decade ago and one can find the cavalier attitude of some MSOs about satellite TV. In its infancy, cable executives mocked DBS with the phrase “don’t be stupid.”

And now, multiplatform competitors are being forced to pay attention to telco video. Just like the time when cable couldn’t ignore satellite TV any more, the wired incumbent (as well as dish-based services) are watching their backs.

How could this all work out? That’s anyone’s guess. But some thoughts:

* Verizon and AT&T have stated that they are happy with their respective DBS relationships. Satellite TV completes the triple play in areas where the telcos cannot offer video. But don’t expect this to last. Why share a video customer when a phone company can own the customer outright?

* Some cable executives should be shaking in their boots when it comes to FiOS TV’s successes to date. One MSO to watch is Cablevision, which already has the competing Verizon product passing nearly a quarter of its households. And FiOS TV is in some of the most affluent neighborhoods served by the New York area cable operator.

Half a million subscribers for FiOS TV is a significant milestone, one the company achieved in a year-and-a-half of service. And one has to wonder where those customers are coming from.