Verizon stays focused on Boston – for now

While Verizon (NYSE: VZ) had little time to fete its win with Boston after some 40,000 wireline workers on the East Coast went on strike last week, its $300 million fiber investment in the city is still something to celebrate.

Bob Mudge, executive vice president and president of Verizon's wireline network operations, told the Boston Herald that Verizon's new focus on 5G played a big role in deciding to build in Boston, saying the lightning-fast service requires a fiber backbone. In exchange, Boston has committed to streamlining the permitting process, including assigning city staff to deal with Verizon's applications.

It's a savvy move for Verizon's wireless division. Despite ongoing industrywide attempts to make zoning and permitting easier for wireless carriers and their partners, it's still a challenge across the country. And with so much emphasis on densification and small cells going forward for all the carriers, it's even more important to have an edge in what seems to be something of a land grab. The first one to get access to a city's "street furniture" – the utility poles, street lights and the like -- would seem to be the one with the biggest advantage.

Still, the deal came as a bit of a surprise. Verizon's partnership with Boston was struck after a long and sometimes hard-fought battle with the city, and the company has been saying for what seems like forever that it wasn't going to add communities to expand FiOS. In Boston, it will finally mean the city, where about 90 percent of the population has had only one option for high-speed Internet -- primarily Comcast -- will see some competition. Hallelujah.

Boston may be a unique situation. City officials told the Boston Globe that the deal was brokered by New England Patriots owner Robert Kraft, who developed a relationship with Boston Mayor Martin J. Walsh. Kraft said he told Verizon chief Lowell McAdam that Boston would be a perfect place to test Verizon's Smart City technology, which could eventually address concerns such as energy efficiency. Word has it that Verizon will pay the city of Boston about $4,100 per month to bankroll the expedited permit approvals, and the city has agreed to cap any increases on some administrative fees during the project.

Besides adding capacity for Verizon's existing LTE network, the Boston fiber will lay the foundation for next-generation wireless services like 5G. While the actual launch of commercial 5G is several years out, having the fiber network in place will be an important part of launching that technology when it's ready for primetime, according to John O'Malley of corporate media relations. Conveniently, Verizon happens to be developing and testing 5G at its innovation center in the Boston suburb of Waltham.

The $64 million question is whether Verizon can replicate this kind of deal in other cities. Verizon spokespersons are careful to say it's just a Boston thing for now. "Right now, we're focused on building out the network in Boston," O'Malley said via email. "This is an entirely new approach to building out a fiber network for us. We want to get started, prove it out, and see what we can learn from this process before we think about trying it anywhere else. But this is a great example of how the private and public sectors can work together and collaborate to make a positive difference in a community."

For the time being, Verizon appears to be winning the wireless siting race in Boston – but as we all know, it's a marathon and not a sprint.--Monica