Verizon Fans Take Heart at High-Fiber Diet

The so-called last mile is once again telecom's final frontier.

Like the wireless Internet and the digital subscriber line before it, a trend called fiber to the premises has Wall Street aglow with possibility.

Investors love it. Consumers might even go for it. Now if only regulators would see things their way, Verizon (VZ Quote) and its peers could lift a tattered sector back to respectability as they upgrade their customers' homes to fiber optic connections.

So goes the drumbeat behind the Baby Bells' latest march on Washington. Offering up another argument for their exclusive control of their networks, Verizon and its peers SBC (SBC Quote) and BellSouth (BLS Quote) are promising a broadband revolution via fiber to the premises, or FTTP.

New York phone giant Verizon turned up the pressure Monday, naming four more suppliers for its FTTP rollout. Prospective vendors like networking gearmaker ADC Telecom (ADCT Quote) jumped 4% on the news.

Still, some observers remained unimpressed by the Bells' professed rush to dig up consumers' rosebushes. They say the big telcos are, as in their recent advocacy of voice over Internet phone service, using their clout with Wall Street to make things happen on the regulatory front. And they doubt that Verizon and its rivals will move as quickly as they claim to give consumers the benefit of these advanced services.

"There are clues that make this whole thing iffy," says Blaylock & Partners analyst Gabe Lowy. Verizon slipped 7 cents to $34.08.

Rally Caps

Investors have embraced few themes this year as tightly as FTTP. Shares of big fiber cable supplier Corning (GLW Quote), for example, have risen threefold this year, and network gearmaker Advanced Fiber Communications (AFCI Quote) has more than doubled. The run-up has come as Wall Street dubbed these outfits the likely beneficiaries of an impending fiber boom.