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Verizon, New York City to Test Way to Spread Fiber Network

Photographer: Andrew Harrer/Bloomberg

The plan would help Verizon Communications Inc., the nation’s second-largest phone company, sell higher Internet speeds and television service in more parts of the city. Close

The plan would help Verizon Communications Inc., the nation’s second-largest phone... Read More

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Photographer: Andrew Harrer/Bloomberg

The plan would help Verizon Communications Inc., the nation’s second-largest phone company, sell higher Internet speeds and television service in more parts of the city.

Verizon Communications Inc. (VZ) and New York City agreed to test a method to more quickly install fiber- optic cables under sidewalks, potentially enabling the company to offer faster connections in more neighborhoods.

The pilot program allows Verizon to use “micro-trenching” or “saw cutting,” in which narrow, shallow grooves are carved out of the ground, opening space for cables, the city said today in a statement. The trial will start with 12 sites across the five boroughs, after which the government and the company will assess whether it can be adopted citywide.

The plan would help Verizon, the nation’s second-largest phone company, sell higher Internet speeds and television service in more parts of the city, competing with Time Warner Cable Inc. (TWC) and RCN Corp. Verizon is counting on those offerings to help keep its phone customers from switching to cable.

“Whether it’s restoring service to storm-ravaged areas or extending it to new ones, the innovative micro-trenching pilot will allow the City to speed deployment of fiber optics,” New York City Chief Information and Innovation Officer Rahul Merchant said in the statement.

While Verizon has been offering its fiber-optic service, called FiOS, in parts of New York City since 2008, it still hasn’t reached every neighborhood. The program could also help the carrier provide service to areas affected by Superstorm Sandy last year, the city said.

More Competition

Micro-trenching would allow enough space for at least four other carriers to pass their cables through the same area, and the pilot program is open to additional communications companies, the city said. That could provide a path for more competition for the market, Merchant said.

Verizon won’t have to cut or interfere with tree roots, light and utility pools or street furniture to use micro- trenching, minimizing disruption, the city said. The company will restore all parts of the sidewalk and street after cutting the trenches.

Verizon gained 0.6 percent to $49.50 at the close in New York, where it is based. The shares have climbed 14 percent this year, compared with a 10 percent increase for the Standard & Poor’s 500 Index.

To contact the reporter on this story: Crayton Harrison in New York at tharrison5@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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