• by David Goetzl  @dgoetzl, June 18, 2010

Cable guru John Malone took more than one shot at Verizon's foray into the TV business last week, despite the telco's bullishness. Speaking at a Liberty Global investor meeting, Malone said Verizon's "returns on FiOS are atrociously bad."

He went on to suggest Verizon may have had a wayward strategy when it launched its own TV service to challenge cable companies: "The most dangerous thing in business is an irrational rich competitor, so don't ever discount that somebody can do things for non-financial reasons."

AT&T's U-verse product has joined FiOS in the telco TV arena by using a fiber-optic network. Malone described the pair as fiber overbuilders. Both have spent heavily on build outs and marketing.

"I've never seen overbuilds work ... it always ends up badly," he said, referring to his decades in the cable business.

Malone, a cable pioneer, now competes in the U.S. with Verizon and AT&T as a part-owner of DirecTV. He serves as chairman of Liberty Global, which owns cable operations in 14 countries outside the U.S., mostly in Europe.

Some telcos in Europe have offered TV service, but appear to be less aggressive than U.S. counterparts.

Verizon executives have expressed satisfaction with FiOS and the company has said it plans to make it available in 18 million homes by the end of the year -- up from perhaps 12 million now. But it has not committed to expansion beyond that, indicating there may be some wariness about continued investment.

FiOS TV had 3 million customers at the end of the first quarter, up from about 2.2 million at the end of the same period in 2009.

About 25% of customers eligible to subscribe to FiOS TV were doing so at the end of March.

Verizon CEO Ivan Seidenberg spoke about solid revenue growth with FiOS at the end of the first quarter.