1. FTTP (Fiber-to-the-Premises) Next Generation Broadband Access Network
Vincent O’Byrne Director –Technology
Verizon
Tel:
July 2004
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.

2. Safe Harbor
NOTE: This presentation contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of The following important factors could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: the duration and extent of the current economic downturn; materially adverse changes in economic and industry conditions and labor matters, including workforce levels and labor negotiations, and any resulting financial and/or operational impact, in the markets served by us or by companies in which we have substantial investments; material changes in available technology; technology substitution; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations; the final results of federal and state regulatory proceedings concerning our provision of retail and wholesale services and judicial review of those results; the effects of competition in our markets; our ability to satisfy regulatory merger conditions; the ability of Verizon Wireless to continue to obtain sufficient spectrum resources; and changes in our accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings.
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.

3. Technology Improvements Increasing Data Services Requirements
Why FTTP? Why Now? What’s Different than before?
Superior Full Service Network
POTS, Data, Video
Standards Based {G.983.x}
Technology Improvements
Reduced Costs (Actives & Passives)
Low Cost compared with PMO
Reduced Maintenance Costs {Passive Plant}
Cost Improvements
Continued Increasing Data Bandwidth Demand
Demand for Video
DSL Unlikely to Meet Longer Term Needs
Increasing Data Services Requirements
Competition
Entertainment Video
Changing Regulatory Environment
Regulatory

4. What does FTTP mean to Verizon ?
Re-inventing the Network
New Network
New Products/Services
Increased Revenue Opportunity
and
Lower Cost
New Processes
New Regulatory Framework
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Information contained herein is subject to change without notice.

5. PON Architecture (ITU-T G.983): A New Network
Central Office
EDFA
(Erbium Doped Fiber Amplifier)
Video
1550 nm
Customer Premises
Voice & Data
Voice/Data & Video
Downstream
1490 nm
1490nm/1310nm, 1550nm
OLT
(Optical Line Terminal)
Optical
Couplers (WDM)
ONT
(Optical Network Terminal)
Upstream
1310 nm
1x32 Or
Cascade
Optical
Splitter
Video
(RF)
Data
(AAL5)
POTS
(AAL2)
Architecture
FTTP integrates FTTH & BPON; represents a common technology & architecture for residence & small/medium businesses
Single fiber Passive Optical Network (PON)
WDM (3 wavelengths); Optical splitters (up to 1x32)
Layer 2 transport for voice & data:
ATM (APON: ITU-T G.983, FSAN standards)
Bandwidth:
622 Mbps x 155 Mbps (1.25 Gbps future) for voice & data
850 MHz RF for broadcast video
Bandwidths & Services
Upstream
Downstream
1310 nm
1490 nm
1550 nm
Voice and Data
@ 155 to 622 Mbps
Voice and Data
at 622 Mbps
Video
42 MHz
550 MHz
860 MHz
Analog TV
Digital TV
HD/VOD
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.

6. G.983 Range defined by: 20 Km range defined by ranging protocol.
Range defined by:
20 Km range defined by ranging protocol.
Used to align ONTs’ upstream data into timeslots
Optical Budget (See below)
B-PON ODN Class
Maximum Attenuation
(dB)
Minimum Attenuation
Differential ODN Loss A 20 5 15 B 25 10 C 30
Enhancement Band system specific. Conventional RF video will require altered ODN
Alignment w/ B-PON Max Attenuation allows common design max budget over 0-20 km range
Enhancement Band system specific
Can be reduced by video Receiver dynamic range. Analog video Receivers have dynamic range of 4-7 dB
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.

7. Fiber Efficiency WDM and fiber sharing; Reduced CapEx
FTTP: A New Network
Fiber Efficiency WDM and fiber sharing; Reduced CapEx
PSTN
POTS
TR08
GR303
Class 5
TDM Switch
TR57
CLEC
Data
LATA Core Router
Internet
Gateway Router
OLT &
Voice
Gateway
ONT
EDFA
Head End
WDM
ATM Aggregation Switch
OC-3/12
1 x 32
Splitter
Hub
Video
Passive Outside Plant minimal maintenance, reduced OpEx
Power &
Battery
Broadband Service Capability
Data: 622 Mbps x 155 Mbps (shared)
Video: 860 MHz (Analog and digital channels; HDTV; VOD)
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.

8. Dynamic Bandwidth Assignment (DBA)
Minimum
Guaranteed
Maximum
SLA (“VBR”)
Demand
Granted BW
ONT A
Demand A
Demand B
Demand C
Grant A
Grant C
Grant B
Minimum = 0
Maximum
SLA (“UBR”)
Total BW
OLT
ONT B
Maximum = Guaranteed = Minimum
SLA (“CBR”)
ONT C
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.

9. FTTP Architecture Home Outside Plant Central Office Feeder Splitter
OLT
Distribution
WDM
Terminal
Video Amp
(EDFA)
Fiber
Distribution
Hub (FDH)
Drop
FDF
Feeder
ONT
Equip
Side
APC Connector
OSP
Side
UPC Connector
Feeder
Splitter
Distribution
Drop
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.

10. UPC and APC Connectors Reflection Reflection PC Connectors
~ 8 degrees
Reflection
Reflection
PC Connectors
More prevalent, due to large deployment in digital systems
Lower loss than APC connectors
Historically issue was relative low optical return loss(ORL) ~ 50 dB, due to reflected signal being reflected back into fiber.
Present ORL sufficient for digital systems.
Newer mated connectors have much better ORL of – 60 dB.
APC Connectors
More prevalent in systems carrying video
Historically higher insertion loss but this has improved over the last several years
Higher ORL of ~ 60 dB+ due to angled fiber structure, which reflects unwanted signal into surrounding cladding regardless of mated or unmated state.
More tolerant {from a reflection point of view} to moisture and dirt.
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.

11. System Performance Testing:Illustrative example
Connector:
System Testing showed that a single Fabry-Perot cavity caused by two connectors caused a reduction in CNR at the receiver when the ORL was < 30 dB
Six connectors would imply that this be increased to ~ 34 dB.
Open/Dirty UPC Connectors would result in a 12 dB reduction in CNR
Open/Dirty APC connectors would result in negligible penalty.
Unterminated Splitter
UPC Splitter has ~ 31 dB ORL placing it on the edge of system degradation if CO UPC had ORL< 31 dB.
APC has ORL > 65 dB, resulting in no CNR penalty.
APC Splitter
UPC Open/Dirty
APC Dirty
UPC Splitter
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.

12. Fiber Distribution Hub (Medium)
39”H x 25”W x 20”D
Premises/ONTs:
216 Max
175 Typical
Pole or Pad Mount
~125 lbs.
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.

13. FTTP Full Build and Overlay Architectures
Copper
Feeder
Circuit
Switch
Small Businesses
Office Parks
Residential
Distribution
|X|
SAI
ONT
Splitter
Hub
FTTP Overlay
ONT
ONT
ONT
Small Businesses
New Buried
Development
FTTP Full Build
ONT
Splitter
Splitter
OLT
FullBuild:
Driver
FTTP initial Capex near parity with PMO (DLC/copper/DSL)
Lifecycle considerations favor FTTP (reduced Opex, deferred Capex, declining prices, increased revenues, regulatory relief)
FTTP Built to Serve All Homes and Businesses (All Services) in Distribution Area (DA)
Used for Greenfield
All services offered over fiber
Overlay:
Primary deployment driver is broadband service demand
Benefits, in addition to new services & revenues:
Capex avoidance for legacy plant modernization
Operations/Maintenance savings for customers transitioned to FTTP
Improved quality of service
Regulatory relief
Used in Established Neighborhoods for Broadband Service Demand and Plant Modernization (Relief and Rehab) Applications
Overlay (No Replacement) FTTP Alongside Existing Access Network (Initially)
Customers Transitioned to FTTP Over Time
Feeder and Distribution Fiber Placed Initially Passed all Homes and Businesses
Electronics Added As Customers Transition
Makes Costs More ”Subscriber Driven”
Broadband Services Available to all Homes and Businesses Passed
Employ connectorized drop, saving time,expense and maintenance costs.
Rate of Transition Triggered by Broadband Service Demand and Repair
ONT
Splitter
ONT
ONT
ONT
Splitter
ONT
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.

14. FTTP Architecture & Services Overview
Target Market
Predominantly residential neighborhoods
Serves all Consumer & Small/Medium Business services
Residence & business customers on same PON; different ONTs/CPE
Services:
Residence - 2 to 4 POTS; 10/100BaseT; 860 MHz RF Video ( Analog & digital channels; HDTV; VOD)
Business - 10/100 BaseT; 1-4 DS1; POTS; Specials (adjunct IAD)
Multiple Dwelling Units {MDUs with 12 living units}
12 Ethernet/VDSL {for longer inside wiring distances}
24 POTS
Video
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.

15. FullBuild:
Driver
FTTP initial Capex near parity with PMO (DLC/copper/DSL)
Lifecycle considerations favor FTTP (reduced Opex, deferred Capex, declining prices, increased revenues, regulatory relief)
FTTP Built to Serve All Homes and Businesses (All Services) in Distribution Area (DA)
Used for Greenfield
All services offered over fiber
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.

16. Overlay:
Driver
Primary deployment driver is broadband service demand
Benefits, in addition to new services & revenues:
Operations/Maintenance savings for customers transitioned to FTTP
Improved quality of service
Used in Established Neighborhoods for Broadband Service Demand and Plant Modernization (Relief and Rehab) Applications
Overlay (No Replacement) FTTP Alongside Existing Access Network (Initially)
Customers Transitioned to FTTP Over Time
Feeder and Distribution Fiber Placed Initially Passed all Homes and Businesses
Electronics Added As Customers Transition
Makes Costs More ”Subscriber Driven”
Broadband Services Available to all Homes and Businesses Passed
Employ connectorized drop, saving time,expense and maintenance costs.
Rate of Transition Triggered by Broadband Service Demand and Repair
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.

17. Web-based Order Fulfillment
Re-Inventing the Network: FTTP Process
Legacy Access Network
FTTP Access Network
Manual Order Taking
Web-based Order Fulfillment
Copper Pair Allocation
Bandwidth Allocation
Service Activation via Installation Dispatches
Software-based Service Activation
Limited Fault Isolation With Traditional NID
Proactive Performance Monitoring at ONT
Manual Asset Inventory
Auto-discovery and Reporting of Assets
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.

18. FTTP Deployment Activities
TimeLine
Verizon, SBC and BellSouth launched a joint effort in February 03 to develop common FTTP requirements
Standards Stimulate and Focus Suppliers; Drive Volume; Reduce Prices
Joint RFP issued June, 2003
Final vendor recommendation in September timeframe
Contract signed in January
Fiber being propositioned since early 2003
Verizon FTTP general deployment planned to begin in 2Q04
Overlay contiguous COs in key market areas
Virtually all Greenfield to be built with FTTP
Pass about 1 million homes in 2004
Potentially double in 2005
Two FOA sites 2Q 2004
100 Central Offices in 9 states
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.

19. New and Innovative solutions to cost of deployment in Buried Areas.
Challenges
Cost, Cost, Cost
Cost of ONTs
Need continued “Partnership” between vendors and Operators to all mutually invest in FTTP
Need cost reduction in ONT components
Triplexors
New and Innovative solutions to cost of deployment in Buried Areas.
Need interoperability between vendors equipment
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.

20. FTTP (Fiber-to-the-Premises) Next Generation Broadband Access Network
Vincent O’Byrne Director –Technology
Verizon
Tel:
April 2004
© Verizon All Rights Reserved
Information contained herein is subject to change without notice.