Bells' Fiber Plan Looking Frayed

Telecom fans have spent 2004 weaving a fabulous fiber tale, full of upgraded networks and lucrative opportunities. But with the Baby Bells still pinching pennies, the buildout story is starting to unravel.

Phone giants Verizon (VZ Quote), SBC (SBC Quote) and BellSouth (BLS Quote) have been promising investors a fiber-optic future, replete with premium-fetching advanced services such as high-definition video and ultra-fast Internet access.

Given the state of the Bells' crumbling local phone business -- a problem exacerbated by customers' flight to wireless and the looming presence of cable rivals -- a bold fiber strategy certainly gives the big telcos' fans something to ponder.

Yet while few observers dispute fiber's capacious potential, many have questioned the wisdom of the Bells moving right now to take on the huge expenses associated with rewiring homes. These people note that the cost of upgrading just a million homes to fiber can cost as much as $1.5 billion -- money the Bells may be loath to spend in these hypercompetitive times. ...