Light Reading

Businesses Face 'Fiber Gap': Report

Dan O'Shea
4/9/2014
50%
50%

Islands of businesses not connected to fiber are the norm rather than the exception, according to a recent report.

The number of businesses in the US connected to fiber networks, the predominant medium for Ethernet, is growing at a healthy clip, increasing to 39.3% of all US businesses with 20 or more employees by the end of last year, according to numbers just released by Vertical Systems Group. That stat is up from 36.1% in 2012, and far from the 10% to 11% numbers the industry was lamenting a decade ago.

If almost 40% of US businesses are connected by fiber, then more than 60% still aren't. They remain in the so-called "Fiber Gap," according to VSG.

That's a pretty big gap. In fact, when the gap is bigger than what isn't in the gap, I don't know if you can still call it a gap -- it's more like the real state of things. If anything, the groupings of actual fiber-connected businesses in this country still look a lot more like islands.

Something else worth noting: The rate of growth in business connections has slowed a bit recently -- it was 31.8% after 2011, so the rate of growth has slid from 4.3% to 3.1% in that span.

Let's not celebrate too much a stat that tells us the number of fiber-connected businesses remains well below 50%. The cable guys have done their part to stoke the market in recent years, but the real sweet spot for many of them continues to be the size of business that is not even considered in this report -- small businesses with fewer than 20 employees. (See TWC Tops Cable List on Carrier Ethernet Leaderboard and Cable's Business Boom.)

The MSOs are increasingly targeting the middle of the market, but even so, they are focusing primarily on the businesses within their own cable TV footprints. That leaves a lot of untapped potential for the national network operators.

When the number of fiber-connected businesses hits 50%, maybe then we can start celebrating -- if being half finished is anyone's idea of an accomplishment.

— Dan O'Shea, Managing Editor, Light Reading

(24)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 3   >   >>
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
4/12/2014 | 2:17:27 PM
Re: Market forces
mhhf1ve - "there are too many industry lobbyists arguing that net neutrailty is anti-capitalist. "

Which it is. It is against the interest of people who invest in carriers. 

But it's also pro-free-market. 
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
4/11/2014 | 11:58:54 AM
Re: Market forces
Dennis, Verizon deployed the numbers out of the original RFP from July of 2003. I can't tell you what they promised NJ or if where deployments happened changed over time. The original plan from the RFP was never more than 50% of the Verizon network. Seven
JQuinnOnTelecom
0%
100%
JQuinnOnTelecom,
User Rank: Light Beer
4/11/2014 | 10:45:50 AM
Re: Market forces
My understanding is that Verizon has indicated it will cease further expansion of its fiber-to-the-home "FiOS" service. I don't believe Verizon will ever stop deploying fiber to buildings, cell-sites, business parks, and other locations with lucrative business and access service demand. 
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
4/11/2014 | 9:04:13 AM
Re: Market forces
Seven -- Do you know if VZ rolled out to all the areas it planned, or did it cut the footprint down at some point? I ask because regulators in NJ are acting as though VZ has reneged on its rollout promise. One person I know who works directly in this process from the regulatory side insists to me that VZ didn't finish the job.
brookseven
100%
0%
brookseven,
User Rank: Light Sabre
4/10/2014 | 6:22:03 PM
Re: Market forces
mhhf1ve,

Before FiOS started (and I was working at AFC), the FCC ruled that FTTP did not have to be unbundled like copper loops.  We lobbied the FCC to get FTTC (no more than 500' of copper) to be dealt with the same way.

FiOS was announced not to expand at the time of the START of FiOS when we won the RFP back in 2003.  The ruling around unbundling was already in place at that time.

So, I think you need to go back and completely rethink that argument.  Unless you can argue that over 10 years of regulatory certainty is really just a blip.

seven

 

PS...Dennis, Verizon stated the scale of the rollout at the very beginning.  They wanted to keep lines in urban and suburban properties.  That mission has been by and large accomplished.  They could care less about rural lines and I think would give them to the cable companies if at all possible.
mendyk
100%
0%
mendyk,
User Rank: Light Sabre
4/10/2014 | 6:03:51 PM
Re: Market forces
The facts suggest otherwise. Verizon was very aggressive in rolling out FiOS, and then it put on the brakes. If it were concerned about regulatory issues, it wouldn't have started out aggressively to begin with.
mhhf1ve
50%
50%
mhhf1ve,
User Rank: Light Sabre
4/10/2014 | 5:16:51 PM
Re: Market forces
That's not a regulatory issue that is "slowing this technological transition" -- that's a business decision.

BUT.. what is that business decision based on? I'm pretty sure that Verizon doesn't want to invest in FIOS b/c there's too much risk in the investment being handed over to competitors if the FCC decides that broadband should be regulated like copper phone lines.

If the FCC decided in no uncertain terms that fiber was never going to be regulated like copper facilities, I'm sure Verizon's business decision would change instantly. 
mhhf1ve
50%
50%
mhhf1ve,
User Rank: Light Sabre
4/10/2014 | 5:13:24 PM
Re: Market forces
The EU is committed to net neutrality:

http://ec.europa.eu/commission_2010-2014/kroes/en/blog/netneutrality

I can understand why the FCC hasn't made a decision yet... there are too many industry lobbyists arguing that net neutrailty is anti-capitalist. 
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
4/10/2014 | 5:02:06 PM
Re: Market forces
You do understand that Verizon has announced that it will not expand its fiber network beyond the current footprint. That's not a regulatory issue that is "slowing this technological transition" -- that's a business decision.
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
4/10/2014 | 4:38:19 PM
Re: Market forces
mhhf1ve - "I think many carriers are stalling their fiber buildouts because there is uncertainty in how their facilities will be regulated."

Makes sense. Regulatory uncertainty is a huge drag on business. In many cases, businesses can live with just about any regulatory decision, but they can't live with indecision. 

I'm reminded of a conversation elsewhere on the boards, where the new FCC commissioner says they need more time to study net neutrality. This is not encouraging. Why do they need more time? Net neutrality has been a hot topic for a decade, and the ancestral regulations for net neutrality go back literally to 1860 in the US. No, that's not a typo -- 1860. Telegraph lines were regulated to require messages be sent on a first-in-first-out basis. 
Page 1 / 3   >   >>
More Blogs from DOS Attack
Who's buying and who's selling as optical sector consolidation takes off?
Data center operator has been succeeding in second-tier markets away from the coastal big cities, but it's hungry for expansion.
Facebook's considerable sphere of influence is growing to include the optical networking sector.
Semiconductor firm MACOM has been an acquirer in recent years, but will that continue as sector consolidation persists?
IP and optical have been moving toward a physical convergence for years, but software layer integration is the new hot topic.
Flash Poll
From The Founder
Last week I dropped in on "Hotlanta," Georgia to moderate Light Reading's inaugural DroneComm conference – a unique colloquium investigating the potential for drone communications to disrupt the world's telecom ecosystem. As you will see, it was a day of exploration and epiphany...
Between the CEOs
Affirmed Networks CEO: Digging Into NFV

5|28|15   |   40:26   |   (2) comments


Hassan Ahmed, CEO of Affirmed Networks, is making some big claims for his NFV startup. I sat down with him at the Light Reading HQ in New York City to get the skinny on what this Acton, Mass.-based startup is up to.
LRTV Documentaries
Cable Eyeing SDN for Headend, Home Uses

5|26|15   |   05:57   |   (1) comment


CableLabs is looking at virtualizing CMTS and CCAP devices in the headend, as well as in-home devices, says CableLabs' Karthik Sundaresan.
LRTV Documentaries
Verizon's Emmons: SDN Key to Cost-Effective Scaling

5|22|15   |   03:53   |   (0) comments


For Verizon and other network operators to ramp up available bandwidth cost effectively, they need to move to SDN and agree on how to do that.
LRTV Documentaries
Lack of Universal SDN a Challenge

5|21|15   |   04:51   |   (3) comments


Heavy Reading Analyst Sterling Perrin talks about how uncertainty about SDN standards and approaches may be slowing deployment.
LRTV Custom TV
Steve Vogelsang Interview: Carrier SDN

5|20|15   |   05:02   |   (0) comments


Sterling Perrin speaks to Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, about the new Carrier SDN-enabling Network Services Platform and the operator challenges it solves.
LRTV Custom TV
Carrier SDN: On-Demand Networks for an On-Demand World

5|20|15   |   20:52   |   (0) comments


Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, talks about requirements and benefits of Carrier SDN during the keynote address at the Light Reading Carrier SDN event May 2015.
LRTV Documentaries
The Security Challenge of SDN

5|19|15   |   02:52   |   (0) comments


CenturyLink VP James Feger discusses concerns that virtualization could create new vulnerabilities unless network operators build in safeguards.
LRTV Custom TV
NFV Elasticity – Highly Available VNF Scale-Out Architectures for the Mobile Edge

5|18|15   |   5:50   |   (0) comments


Peter Marek and Paul Stevens from Advantech Networks and Communications Group talk about their NFV Elasticity initiative and the company's latest platforms for deploying virtual network functions at the edge of the network. Packetarium XL and the new Versatile Server Module: 'designed to reach parts of the network that other servers cannot reach.'
LRTV Huawei Video Resource Center
Bay Area Spark Meetup 2015

5|14|15   |   3:54   |   (0) comments


Developed in 2009, Apache Spark is a powerful open source processing engine built around speed, ease of use and sophisticated analytics. This spring, Huawei hosted a meetup for Spark developers and data scientists in Santa Clara, California. Light Reading spoke with organizers and attendees about Huawei's code contributions and long-term commitment to Spark.
LRTV Custom TV
The Transport SDN Buzz

5|12|15   |   06:01   |   (1) comment


Sterling Perrin, senior analyst at Heavy Reading, speaks with Peter Ashwood-Smith of Huawei and Guru Parulkar of ON.Lab about the evolution of transport SDN and the integration of technologies.
LRTV Custom TV
Next-Generation CCAP: Cisco cBR-8 Evolved CCAP

5|5|15   |   04:49   |   (0) comments


John Chapman, Cisco's CTO of Cable Access Business Unit and Cisco Fellow, explained the innovation design of Cisco's cBR-8, the industry's first Evolved CCAP, including DOCSIS 3.1 design from ground-up, distributed CCAP with Remote PHY and path to virtualization. Cisco's cBR-8 Evolved CCAP is the platform that will last through the transitions.
LRTV Custom TV
Meeting the Demands of Bandwidth & Service Group Growth

5|1|15   |   5:35   |   (0) comments


Jorge Salinger, Comcast's Vice President of Access Architecture, explains how DOCSIS 3.1 and multi-service CCAP can meet the demands of the bandwidth and service group growth.
Upcoming Live Events
June 8, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
Procera has gathered facts, stats and customer experience feedback from a survey of 540 users from across the globe.
Hot Topics
Bidding War for TWC Looks Likelier
Alan Breznick, Cable/Video Practice Leader, 5/22/2015
Charter Seals Deals for TWC, Bright House
Mari Silbey, Senior Editor, Cable/Video, 5/26/2015
Eurobites: Alcatel-Lucent Trials 400G in Czech Republic
Paul Rainford, Assistant Editor, Europe, 5/26/2015
Will Carriers Follow Facebook's Networking Lead?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 5/28/2015
Charter Plans Business Services, Wireless Push
Alan Breznick, Cable/Video Practice Leader, 5/27/2015
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
On May 29th 1 PM ET, Steve Saunders, founder and CEO of Light Reading, will be drilling into the "pains and gains" of NFV with Saar Gillai, SVP & GM for NFV at Hewlett-Packard Co. (NYSE: HPQ) (HP). He has defined a four-step NFV model describing a sequence of technology innovation. It's a must-read doc for any network architect looking to get to grips with their NFV migration strategy. Join us for the interview, and the chance to ask Saar your NFV questions directly!
Hassan Ahmed, CEO of Affirmed Networks, is making some big claims for his NFV startup. I sat down with him at the Light Reading HQ in New York City to get the skinny on what this Acton, Mass.-based startup is up to.
With 200 customers in 60 countries, Stockholm-based Net Insight has carved out a solid leadership position in one of the hottest vertical markets going in comms right now: helping service providers and broadcasters deliver video and other multimedia traffic over IP networks. How has Net Insight managed to achieve this success in the face of immense competition from the industry giants?
Cats with Phones