Cable Starts to Seed All-Fiber Future
Several small cable operators are located in remote areas. In some circumstances, fiber build costs are on par with, or are less expensive than, traditional HFC plant in low-density rural areas. These MSOs also may face a serious telco fiber threat.
More importantly, small, privately held MSOs rarely encounter any close examination from Wall Street, known for its tough scrutiny of publicly traded MSOs and their capex outlays.
For other MSOs, it’s hard to justify the price tag for a fiber rollout under any circumstance. Fiber is at times more expensive to install when compared to HFC. However, as Breznick points out, fiber is cheaper to operate and maintain when compared to traditional cable infrastructure. And those opex savings may have some MSOs more aggressively investigating fiber.
Also, the price gap between fiber and coax installations is constantly narrowing, the report says.
The seventh deadly sin
And then there’s simple pride to consider. The cable industry is loath to contradict itself when it comes to past comments about telco fiber. “They don’t want to be seen as rewarding Verizon’s fiber strategy,” says Breznick, referring to Verizon Communications Inc. (NYSE: VZ)’s massive (and massively expensive) FiOS rollout.
Residential requirements aside, the best argument for cable FTTP may center on its business services potential. But RFoG, which doesn't give much in the way of a capacity edge over HFC, may not be enough.
With that in mind, the cable industry is also considering Passive Optical Network (PON) technology in an attempt to reach businesses with the capacity needs they require, says Breznick.
Heavy Reading believes cable may emphasize EPON technology (rather than GPON, the standard being used by Verizon) because it's considered more "cable network friendly" in some circles. Some vendors already have added EPON products to their RFoG portfolios. (See RFoG Gets the Squeeze.)
Although the market for RFoG and RFoG with PON extensions remains small, it has attracted a sizeable and still-expanding vendor pool. Arris Group Inc. (Nasdaq: ARRS), for example, just joined the RFoG crew this week. (See Arris Enters RFoG Fray .) Last month, Motorola Inc. (NYSE: MOT) fleshed out its RFoG portfolio via a partnership with Alloptic Inc. . (See Moto, Alloptic Tag-Team on RFoG .)
Other vendors in this sector include cable veterans Cisco Systems Inc. (Nasdaq: CSCO), CommScope Inc. , and Harmonic Inc. (Nasdaq: HLIT) and traditional telecom equipment powerhouses such as Calix Inc. (NYSE: CALX), Hitachi Telecom (USA) Inc. , and Pacific Broadband Networks (PBN) . Newer players like Aurora Networks Inc. and Salira Systems Inc. also are promoting cable fiber portfolios.
— Michael Hopkins, Special to Cable Digital News
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