Amid talk of video-on-demand and music-on-demand, Verizon Communications Inc. (NYSE: VZ - message board) is now offering its wholesale customers bandwidth-on-demand. (See VZ Intros Bandwidth on Demand.)

    The endeavor, announced yesterday, addresses what's normally a slow process. Adjusting an enterprise's leased-line bandwidth is not quite as simple as changing the bandwidth of a residential FiOS customer.

    "Today, the leadtimes can be somewhat lengthy, because a series of networks have to be interconnected, which could include building fiber facilities," says Larry O'Neill, Verizon's product manager for bandwidth on demand at Verizon. "Somewhat lengthy" can mean several months.

    Now, Verizon is saying that customers of its new bandwidth-on-demand service can have their request processed in hours and sometimes as little as minutes.

    The initial set up requires some of the physical installations that would go into reconfiguring a customer's bandwidth needs under the current procedures -- in other words, Verzion does a preemptive buildout. Once the customer is set up, it pays a recurring fee for the luxury of bandwidth on demand.

    But that's just the physical part. The ongoing challenge for making the on-demand service work lies in being able to allocate the bandwidth throughout the network.

    "In other companies, external software does all of this, whereas our network equipment itself does it. It's still bandwidth on demand, but the differentiator is that they are taxing the software so much for the instant activation, they can't do other services. We have the ability to launch many more capabilities," claims O'Neill.

    The service is available only in New York and is expected to be offered in Washington, D.C., in mid-2008. Afer that, it will slowly become available throughout Verizon's eastern footprint in National Football League cities.