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Carrier Ethernet Coming to FiOS

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
11/9/2012
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NEW YORK -- Ethernet Expo 2012 -- Reach remains a key challenge for Ethernet wholesalers: one way Verizon Global Wholesale intends to overcome it is by tapping into the FiOS network, an executive stated here during a Thursday panel.

Verizon Communications Inc. (NYSE: VZ)'s FiOS network, which passes about 19 million homes along with millions of businesses, will give the wholesale unit a way to "dramatically extend the reach," said Brendan Gunn of Verizon Global Wholesale, a unit that sells services to a wide range of wireless, fixed line (CLEC and ILEC) and cable providers. "Leveraging the retail FiOS plant will take that [plan] to the next step," he added.

"For us, the challenge is reach," Gunn said, noting that FiOS-related activity is still in the test/project phase. When the idea gets rolling, he sees FiOS being built into the wholesale portal and perhaps "drive a different cost point" compared to its other offerings.

That strategy is coming into view as cable operators get more aggressive with their Ethernet strategies. Several MSOs are delivering Ethernet over fiber, but many already deliver those services on their hybrid fiber/coax (HFC) plant. Most of the coax-based deployments have been marketed as T1 replacements with symmetrical speeds of about 2Mbit/s, but cable is looking to improve the speeds and performance by delivering Ethernet services over their higher-capacity Docsis 3.0 infrastructures. (See TW Cable to Blend Ethernet With Docsis 3.0.)

Unlike the cable guys, the wholesale Ethernet providers represented on Thursday's panel -- Verizon, Zayo Group Inc. (NYSE: ZAYO) and Sidera Networks Inc. (formerly RCN Metro) -- aren't currently looking at copper as a way to expand their reach.

It's not because they are fiber snobs, per se, but because they view fiber as the platform that can keep up with the kind of bandwidth demands that their customers require.

Delivering Ethernet over copper presents "an attractive access method," but Verizon's preference is to work with partner companies that use fiber, Gunn said.

"The driver is where the [bandwidth] demands are going," said Sidera CTO Philip Olivero. "We feel that fiber is uniquely positioned to handle those kinds of bandwidths."

Zayo, meanwhile, doesn't have a copper infrastructure, so it's going to leverage what it has, which happens to be 68,500 route miles with 10,000 buildings on-net, noted Pam Moore, Zayo's VP of Ethernet services.

The small cell challenge
The explosion of smartphones and tablets has caused bandwidth demand to come from mobile devices rather than fixed positions, and is giving rise to small cell wireless networks that make capacity needs more difficult to predict. "Demand is going to move around, basically," said Olivero. "We'll have to plan for a dynamic environment."

Another challenge ahead for wholesale Ethernet providers is how to support small cells with an economic model that works.

Gunn said Verizon's seeing requests for proposals (RFPs) from carriers that want a low-latency product for about one-tenth the price they typically get charged for macro sites. Providing affordable connectivity to small cell sites "will be a big challenge with us going forward in the next three to six months," he said.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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joanengebretson
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joanengebretson,
User Rank: Light Beer
12/5/2012 | 5:17:53 PM
re: Carrier Ethernet Coming to FiOS


It's interesting to learn about Verizon tapping in to FiOS fiber ro support wholesale carrier Ethernet just a few days after AT&T's investment announcement. As part of that announcement, AT&T said it planned to tap into U-verse fiber to support small cells.


Wonder if Verizon will do the same with FiOS -- and if AT&T would consider a U-verse-supported carrier Ethernet wholesale offering like Verizon's.

steve q
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steve q,
User Rank: Light Sabre
12/5/2012 | 5:17:50 PM
re: Carrier Ethernet Coming to FiOS


The only problem Verizon has is that there is still alot more of the cust on the copper network . If  Verizon trying to push them onto the fios network  they have to come out with a better plan.   Verizon Fios and Verizon Wireless should find a way work together so they can come up with a way to grp the amount of data speed and video as a large package in large neighorhood to off set the cost .

tmc8080
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tmc8080,
User Rank: Lightning
12/5/2012 | 5:17:50 PM
re: Carrier Ethernet Coming to FiOS


This is Verizon wanting back into the business/wholesale markets, after lackluster performance with residential customers. They seem to have plateaued at around 25% int he most competitive market of NY Metro-- due in part to their own actions/fault over the last 9+ years. In Manhattan, TWC is deploying fiber optics directly to BUINESSES and it's no surprise that Verizon would want a piece of that action. This is a market they are used to serving and geting these customers to pay large service bills at the end of the month-- similarly to the size and ROI of cellular services. We all know these short sighted approaches will come back to bite the company's profits in the futre by ignoring the will of the residential FIOS base at their own peril.

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