Several media and Internet commentators have been looking at the numbers reported by Verizon and some of our cable competitors.  Indeed in the second quarter, some of the cables did well in attracting new customers, and, while Verizon added more customers than most of our peers, the two largest cable companies had bigger “net adds” than we did.  What’s that all about?

For one thing, this pattern seems to ebb and flow.  During the first quarter of 2008, we surprised analysts with the number of additional customers we reported for our FiOS service and beat many of the cable companies.

I think a couple of things happened.  Perhaps the most significant was that we wrapped up a major promotional push at the end of the first quarter, and that promotion was responsible for a lot of new customers at the beginning of the year.  Looking ahead, we recently launched a new promotion that leverages Verizon FiOS TV’s advanced technology to attract new customers.

But what’s the larger picture?

First, customers like our services, and we do very well in surveys conducted by unbiased third parties.

In February and again in March of this year a national consumer magazine declared FiOS the top service, hands down, with the best rating in all categories based on reader feedback.  Our High Speed Internet Service (DSL) was in the top five or six.

For the second year in a row, Verizon FiOS Internet service was rated the best in PC Magazine's reader survey of the “The Best (and Worst)” ISPs in America.  In reporting this year’s results, the magazine said, “Unsurprisingly, the favored method to connect is fiber-to-the-premises, as embodied by the Verizon FIOS service. The fast fiber hookup received an 8.6 for an overall score – the best rating of all the broadband options.”

Second, FiOS is the clear leader when it comes to speed.  As we explain in this list of new service breakthroughs, Verizon introduced 50 megabits-per-second (Mbps) FiOS Internet service in all 16 states where we’re building our fiber-to-the-home network.  We’ve also boosted our High Speed Internet service speed to 7 Mbps in markets where FiOS is not offered, giving roughly 3.5 million Verizon DSL customers in parts of 20 states download speeds that are more than double our previous top speed.

Third, FiOS customers are more likely to experience the speeds advertised for their service because they share more bandwidth with fewer users.  No more than 32 FiOS users share the downstream data capacity of 622 Mbps from the central office to the home.  CableLabs, which is owned and operated by cable companies, acknowledges that a few hundred users may share a 6 MHz downstream channel, and the 6 MHz channels support approximately 39 Mbps of bandwidth to share among 100 of cable users.  Because more cable customers share less bandwidth, those users will receive their advertised speed far less often than FiOS customers.

In fact, an internal Verizon study shows that the median speed for Cablevision’s 15 Mbps customers is 5.55 Mbps whereas the median speed for FiOS 10 Mbps customers is 10.02 Mbps.  The median speed for FiOS 20 Mbps customers is 19.33 Mbps.

Fourth, customers rate FiOS TV’s picture quality better than cable or satellite in third-party surveys.  This is true for both standard-definition and high-definition broadcasts, but it’s especially important for customers who have invested in HDTVs and want the best HD possible.  We, of course, deliver FiOS TV over our fiber-to-the-home network, which means we have the bandwidth to deliver HD signals without additional compression.  We forward the signal to our customers the way that we receive it.  It’s been reported that some cable companies are compressing their signals and squeezing as many as three channels into one QAM.  Additional compression cuts down on the vividness and sharpness of images, and consumers can see the difference.

Fifth, we’re continuing to introduce new services and bundles that set us apart from cable. For example, beginning this quarter, new FiOS customers will receive broadband home routers that are capable of 100 Mbps speeds inside the home and allow operation of as many as four Wi-Fi channels.  In the area of new bundles, we’ve created the Verizon Flex Double Play bundle that enables customers to subscribe to Verizon Wireless service, add Verizon broadband - and get it all on one bill. FiOS TV service, where available, can also be added to create a triple-play bundle.

These are the kinds of broadband services that our competitors can’t match, which is why we think we’re ready for the competition ahead.