Verizon Vibes Turn Negative

A Verizon representative adds that the company is on track with FiOS. As for Babbio's departure, Verizon calls it a personal decision, given its deep leadership bench "and the success we are having in the deployment of FiOS broadband."

"With our strategies gaining traction in the marketplace, Larry felt the timing of March 2007 was right," Verizon said. "There's nothing more to it than that."

Still, Verizon has been heavily criticized ever since it launched its fiber-to-the-home strategy as a way of battling cable companies with the triple play of TV, fast Internet and phone service. Taking on the staggering costs of rewiring houses amounted to a gamble that a big data pipe would open up new sources of revenue.

The company hoped that investors would ignore the project's roaring cash furnace because Verizon's wireless joint venture with Vodafone (VOD Quote) -- Verizon Wireless -- was the fastest-growing player in the hot mobile-telco sector.

But rival AT&T (T Quote) has succeeded in taking a far less dramatic route toward video.

The San Antonio phone giant limited its fiber expansion to equipment offices and neighborhood nodes to help boost speeds over existing copper-wire connections. AT&T has started its U-Verse service in a few Texas markets and plans to have the TV offering available to 19 million homes by the end of 2008.