Mark Lennihan  /  AP
A green connector on a Verizon fiber optic cable is ready for an apartment renter to plug into for phone, cable and internet service at the 67 Wall Street luxury apartment building in New York.
updated 3/26/2007 4:11:48 PM ET 2007-03-26T20:11:48

For Tony DiCicco, a 19-year-old in Doylestown, Pa., the future of Internet access is close at hand, yet so far away.

In the single-family homes surrounding the rowhouse community where he lives, fiber-optic Internet service is available from Verizon Communications Inc., which has embarked on a $23 billion project to replace its copper phone lines.

But in DiCicco's community of Westwyk, the backyards are controlled by a homeowner's association that hasn't given Verizon approval to dig, despite DiCicco's lobbying, which started in 2005.

"The problem here is we have a lot of senior citizens who don't care about FiOS," said DiCicco. He's studying for a telecommunications degree and is convinced of the superiority of fiber optics over copper lines and cable.

Richard Michie, treasurer of the condo association, says there are plenty of older people in Westwyk who are interested in FiOS. The association is looking into giving the company the right to dig another route, but it's a lengthy process that includes getting a lawyer's opinion.

Slow rollout
Verizon is pushing to get FiOS to apartment buildings, rowhouses and other shared dwellings, but for a number of reasons, the going has been much slower than the rollout to single-family homes. In some cases where it is available, the FiOS service an apartment building does get is technically inferior.

Eastchester Heights
Mark Lennihan  /  AP
A gray junction box, right, is the first sign that Verizon's fiber-optic system is being installed in the Eastchester Heights housing complex in the Bronx borough of New York.
At the end of last year, Verizon had rolled out its fiber infrastructure in areas with 6 million homes. A quarter of those homes, or 1.5 million, were in multi-dwelling buildings, according to Eric Cevis, vice president of Verizon Enhanced Communities.

But most of those 1.5 million were not actually able to get the service right away. The company had permission from building owners to sell to FiOS to only 337,000 of those homes.

Verizon stresses that it's not discriminating against apartment buildings and renters, who have lower average incomes than home owners. It's doing a complete overhaul of its infrastructure, and knows it has to tackle apartment buildings to complete it. Apart from Internet service, the fiber allows the company to provide cable TV programming and lowers the cost of maintaining its network.

In areas with single-family homes, Verizon pulls fiber down the street or behind the houses, either on utility poles or below ground. If a homeowner orders FiOS, Verizon installs an Optical Networking Terminal, which is about the size of a large shoe box, on the side of the house, and connects it to the main fiber line. The customer's computer, phone and TV set can then be connected to the ONT.

For multifamily buildings, the procedure is more complicated, for two main reasons.

Owners must grant permission
For one thing, Verizon needs permission from the owner of the building, the co-op board, or whoever else controls the common areas, to wire the building. As DiCicco found, getting people interested in new technology isn't always easy.

It's the job of Verizon Enhanced Communities to market the service to building owners. It got started in 2005, a year and a half after Verizon started connecting single-family homes.

The unit's main message is that fiber increases the value of a property. To get the word out, Cevis "basically attended every housing conference across the country."

This year, he is doubling his staff with the aim of bringing the number of apartments with landlord approval for FiOS to 654,000 by August.

The other hurdle: Verizon's standard Optical Networking Terminal is a large affair, designed with little regard for aesthetics. It may not look incongruous in a garage or at the back of a bungalow, but inside an apartment, it's another matter.

"A lot of the customers did not necessarily like the technology ... because they thought it was too big, it took up too much space," Cevis said.

Terminal workaround
To get around that obstacle, Verizon and its equipment vendors have developed a terminal that can be mounted in a basement or hallway closet to serve several apartments at once. Internet traffic is carried the last stretch to the apartment over the existing phone line using digital subscriber line technology, or DSL, and the TV signal is sent separately over coaxial cable.

This solution still lets the company offer Internet service at 50 megabits per second, the highest speed available with FiOS right now. That's higher than regular DSL can muster, because the copper wire is too short to pick up much interference, but it's hard to increase the speed from there. With fiber all the way to the apartment, Verizon could easily go up to 100 mbps, and with equipment upgrades, the speeds could be far, far greater.

"We prefer to take fiber all the way to the unit. It's just that in some buildings it's not practical," said Paul Lacouture, Verizon's executive vice president of engineering and technology. Landlords, he said, sometimes don't want to have a fiber cable running down the hallway or in the ceilings, and are afraid of the disruption the installation can cause.

Still, most landlords understand the benefit of drawing fiber all the way to the apartment, and it has been the most popular choice so far. Verizon is also working with its vendors to produce fiber that is more flexible, and thus easier to get around doorways and corners, Lacouture said.

Added service appeals to tenants
The low-hanging fruit for FiOS are buildings that are being built or gut renovated. The apartments in a 25-story building on New York's Wall Street that is being partially converted from office use each have a strand of Verizon's fiber, ending in what looks like a small electrical closet. There are also two coaxial cables that could accommodate one cable company each.

"I like to be able to offer multiple selling points," said Jack Berman, a partner at the developer of 67 Wall Street, Metro Loft Management.

The apartments rent for between $2,000 and $4,500 a month.

On the other side of the city and its income spectrum, FiOS is coming to Eastchester Heights in the Bronx, a complex of brick buildings with 1,414 apartments that used to be known as Homicide Homes. The last gangs were pushed out just a few years ago, according to James S. Eisenberg, director of operations for landlord UrbanAmerican.

During a recent visit, the only sign of Verizon's activity so far were some metal boxes mounted on the facades in preparation for fiber installation. Many landlords would consider the boxes unsightly, but Eisenberg said the added service would appeal to tenants.

When UrbanAmerican surveyed the property as part of the purchasing process a few years ago, it found that many residents ran small businesses like Web design out of their apartments.

"I don't know if they call it the 'digital divide' anymore, but (FiOS) certainly helps bridge that gap," Eisenberg said.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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