Fighting FiOS With Fiber

Although some chinks are appearing in Verizon Communications Inc. (NYSE: VZ)'s armor as it continues to lose wireline share, it's a safe bet the telco will continue to make subscriber gains against cable operators by wielding FiOS, its fiber-fed service platform for Internet and video services. (See Verizon to Raise Prices, Cut Jobs and Which Gnat Will Go Splat?)

So, how can cable and its hybrid fiber/coax (HFC) hope to battle against Verizon and other telcos thar are ratcheting up speed and capacity via expanding fiber-to-the-premises (FTTP) footprints? Install more fiber, of course. At least that was the tech-laden answer provided by execs at Aurora Networks Inc. and CommScope Inc. (NYSE: CTV), the headliners for a recent Cable Digital News webinar titled "FiOS Fighters: Cable MSOs & FTTP."

While Aurora preached that cable should drive fiber deeper, CommScope said operators should consider (and can afford) FTTP architectures in some "greenfield" situations.

Cable operators have been careful to say that they have techniques such as switched digital video, advanced compression, and analog reclamation at the ready to keep bandwidth requirements at bay. But they will need to do more to keep up with the surging demands of high-definition television and high-speed Internet services, according to John Dahlquist, Aurora's vice president of marketing.

Cable network "capacity must be expanded... [with] more bandwidth per home passed," he says.

Cable's low-cost first response is segmenting the nodes, which can immediately quadruple narrowcasting and return capacities, and can be done only where it's required.

Beyond that, operators can push fiber deeper into their networks and eliminate the bottlenecking at the node. That architecture, which reduces the need for amplifiers and power supplies required on the network, can dramatically lower an operator's operational expenses, Dahlquist explained.

In a sample cable system passing 20,000 homes, a traditional HFC network would require 1,133 powered up "actives" (i.e. RF amplifiers and optical nodes), versus just 200 in a fiber deep architecture. The HFC power cost over ten years would run $564,170 for HFC, versus just $278,373 for a fiber deep system, according to Aurora's analysis. Also from this same ten-year view, maintenance costs would plummet.

Table 1: Fiber Deep vs. HFC*

	Traditional HFC	Fiber Deep
Power supplies	55	20
RF amplifiers	1,100	0
Optical nodes	33	200
Total active devices	1,133	200
Actives per mile	>5	~1
Cascaded RF amplifiers	5	0
Network availability	99.98%	99.995%
Power cost (10 years)	$564,710	$278,373
Maintenance cost (10 years)	$871,500	$229,500
* 20,000 home-passed sample Source: Aurora Networks

But it does cost a bit more from a capital standpoint. Dahlquist said fiber deep architectures can cost 20 percent more than an upgrade to "good, conditioned HFC plant." However, for an operator building a new network or conducting a "major" HFC rebuild, the costs for fiber-deep are just 3 percent to 5 percent greater than a traditional HFC upgrade. Fiber deep "is a real plus in the greenfield application," he said.

But who's giving fiber-deep the vote? Dahlquist said mid-sized MSOs "have really grasped the concept early on," though some larger operators are giving it a shot as well. Some examples: Rogers Communications Inc. (NYSE: RG; Toronto: RCI) and Videotron Telecom Ltd. of Canada, Bresnan Communications LLC , CableOne , and Suddenlink Communications .

"This [fiber-deep architecture] is an intermediate platform that enables cable operators to cost-effectively scale their spending behind revenue demand for services," Dahlquist insisted.

But some vendors see cable ops taking fiber all the way to the home now, albeit only in certain circumstances.

CommScope, like other vendors, has developed a cable FTTP platform that preserves an operator's headend and consumer-side equipment, such as set-tops and modems. (See CommScope Sees BrightPath for Cable FTTP.) A broader standard called "RF Over Glass" (RFOG), led by the Society of Cable Telecommunications Engineers (SCTE) , is also underway. (See Fog Lifting on RFOG.)

Mark Vogel, CommScope's manager of technology development, said the FTTP approach works best for new builds. But there's no reason for operators to start from scratch, apparently.

To reduce disruption, some of the FTTP systems tailored for cable are designed to tap the operator's existing provisioning, monitoring, and conditional access systems, Vogel said. And, instead of an Optical Network Unit (ONU) on the side of the customer's home, CommScope's system uses a simpler, less costly network interface unit that converts optical signals to electrical as they enter the home, and the opposite in the reverse direction.

Because CommScope's BrightPath architecture reduces the need for amplifiers, Vogel said deployment costs are near or below parity with HFC in mid-to-low densities, and can be cheaper than HFC in some low density scenarios. But those deployments carry a 20 percent premium in high-density situations.

He said the top five U.S. MSOs "have shown interest" in the platform, with some having started trials. Those deployments are limited mostly to new home developments, in small pockets of 100 to 300 homes. Some operators are also looking toward systems like BrightPath as a way to deliver services to business customers as well, Vogel said.

— Jeff Baumgartner, Site Editor, Cable Digital News