Is Verizon practicing to take on AT&T?

Verizon is denying it, but one industry analyst sees the current Verizon Communications buildout into AT&T turf around Dallas as a blueprint for further telco wars.

Clifford Holliday, an analyst with Information Gatekeepers, is authoring a report, “Overbuild: The New RBOC Advanced Access Architecture Strategy?” which is due out by year’s end. Holliday said in an interview today that he believes Verizon will be very successful in the 10 to 12 Dallas communities in which it is overbuilding AT&T service and expects the company to move on from there.

“GTE [now part of Verizon] was renowned for having franchise areas surrounding large urban areas,” as they do in Dallas, Holliday said. “Verizon still has most of those. I think this is just a first step. California comes immediately to mind as a place to really attack AT&T. The LA area is surrounded by old GTE properties.”

In the Dallas-Fort Worth area, Verizon has been working since last summer to build FiOS out into 10 to 12 suburban communities, some of which are partially covered by the Verizon voice footprint and some of which are adjacent to Verizon service territory. The move is being done under an approved amendment to Verizon’s statewide video franchise. The company doesn’t yet offer FiOS services to these suburbs but expects to in the coming months, Verizon spokesman Bill Kula said.

Kula denied, however, that the Texas buildout is a testing of the waters for future competition with AT&T.

“We’ve made no plans to build out our fiber optic network in other areas that are out of franchise at this point in time,” Kula said, adding that in no way is the Texas buildout a test. “That is something we’ll continually consider doing. This is the only area in the country where we are building out our fiber network to serve customers we haven’t previously provided voice services to.”

Kula and analyst Holliday agree on one thing: They both expect FiOS to go over big in the new customer base.

“I think they’ll beat the pants off Time Warner [Cable] and AT&T U-verse,” Holliday said. “That’s my opinion. They have a superior service, and it’s cheaper.”

Holliday’s wife is a Dallas real-estate agent and finds people moving into the area often ask if homes come with FiOS. “They know what it is, and they want it,” he said. “If they’ve ever had it, they want it again.”

Customers in the new areas have already been exposed to FiOS, Kula points out, “from their friends or from seeing our advertising and media coverage in this market,” so it’s reasonable to expect a more rapid service take-up in the area.