Fiber to the Premises

Dick Lynch

EVP & CTONovember 19, 2009

Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.

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Why fiber?

Why fiber-to-the-premises (FTTP)?

VZ FTTP deployment

Future of fiber

Outline

Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.

3

Bandwidth Demand

Source: Infonetics and Alcatel-Lucent

1kbit/s

10kbit/s

100kbit/s

1Mbit/s

10Mbit/s

100Mbit/s

1Gbit/s

1987 1992 1997 2002 2007 2012 2017

9.614.4

2856

256512

10 Mbit/s

100 Mbit/s

1Gbit/s

Email/TXT

Photo sharing/posting

VoIP

Gaming

Music streaming/download

Video streaming/download

Social media

Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.

4

Why Fiber?

• Bandwidth – with headroom– Today (50/20 Mbps)– Future (00s/00s Mbps)

• Leading competitive solution– Quality– Reliability

• Cost effective solution

• Lower operating cost than copper– More immune to weather– Less active equipment– Cost curve improving

• Not enough wireless spectrum

Fiber Solutions Enhance Capabilities and Efficiencies

Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.

5

Fiber to the Premises Architecture

Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.

6

VZ FTTP Program Status

2006 2007 2008 20090

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4

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8

10

12

14

16

18Homes Passed (M)

0

10

20

30

40

50

60

70

80

90

100%Data Penetration

Homes Passed (M) Data Penetration

Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.

7

Future of Fiber

• Build costs declining– Innovations

– Scale

• Operating costs declining– Y/Y

– vs. copper

• Profitable field of use increasing– MDUs

– Less dense areas

• Performance improvements– Speeds

– Symmetry up/down

• Only technologies not bounding demand

Ultra High Definition TV

Business Ethernet

HD Video Teleconferencing

Home Health Services

Smart Grid