We received a well-informed opinion about our ‘Dog of the Dow’ stock pick Verizon (VZ) a couple of days ago. A former employee who still chats with his former co-workers says the fiber-optic lines (something I mentioned on January 2nd) were indeed paying proverbial dividends. Check out what our reader wrote about the short and long-term revenue growth path the telecom industry - and this undervalued stock - seems to be on…

I retired form Verizon several years ago, but still have friends working there. Verizon’s FIOS (Fiber Optic Service) is being rolled out gradually, and is being well received by customers. The only speed bumps are winning local approval to sell TV service in some areas. I think the coming of I T telephony is a concept well below the radar of most investors. For those who understand old telephony with central offices full of switches………the Vonage model IS the future. In 5 years those switches will all be replaced with servers.

I tend to agree on all counts. The broadband-based services like television and telephony are still underestimated, misunderstood, or completely missed by too many folks. As the technology gets better and better, the old telephone equipment will become obsolete.

If you don’t think it can happen, keep in mind the government (FCC) has already ‘obsoleted’ your old analog television. As of March of 2009, if your television isn’t digital - or you don’t have a digital receiver - you won’t be seeing a thing on your TV screen. (Maybe the FCC has a stake in Sony?) The point is, we’re being whisked into the future - like it or not.

I don’t know if the new age of telephony will mirror the onset of the new television era (I don’t think it will actually). However, I don’t want to be left owning technology that can’t be used.

Anyway, like the guy said, FIOS is being well received. We’ve seen IPTV stories for a while now as well. These providers keep resurfacing, so I don’t think it’s a story that’s going to go away. Maybe we should take the hint. At the same time, maybe the easiest way to jump into the game is with a company that already has a major presence in the game.

Oh yeah, Verizon just announced today their FIOS service in some locations was capable of transmitting data over the Internet at a rate of 20 or 50 megabits per second (mbps). Just for perspective, the very fastest broadband services right now - usually via a coaxial cable - are maxed at 10 mbps. Their price, however, isn’t much more than the 10 mbps service.

See what I mean?

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