Will Verizon's Fios plan kill off the company?

Verizon will have to spend nearly $10,000 to connect each subscriber to its new high-speed Fios network, says an analyst. At that price, can this company stay in business?

Broadband Reports cites an analysis by Light Reading Editor Phil Harvey that figures it will cost $9,650 to wire each new Fios customer.

This, despite the fact that Verizon claims it only costs $650 to connect a "passed" home.

So where does the $9,650 number come from? The Verizon $650 figure assumes that the network has already been built in a neighborhood, and is merely the cost of hooking up a customer to that network.

The $9,650 figure takes into account the actual building of the network. Obviously, that's the important number here.

Verizon will be spending $18 billion on the Fios network NetworkWorld reports. The magazine notes that Wall Street believes "Verizon may be spending too much to run fiber directly to homes."

The upshot? Verizon is essentially betting the company on its Fios implementation. It's currently trying to shed its landlines, and appears to want to leave that business behind.

But their costs in building the network may be too high to be sustainable; AT&T, for example, is building a fiber network at much lower cost because it runs fiber to the curb rather than directly into the home.

Beyond that, it's not at all clear that customers will leave cable companies for Verizon's Fios network.

For my money, $10,000 per home is just too big a gamble, and one I wouldn't bet a company on.