Taking Fiber to the X?
Heavy Lifting Analyst Notes Alan Breznick, Cable/Video Practice Leader, Light Reading 3/15/2011
In late December, the Society of Cable Telecommunications Engineers (SCTE) finally approved its Radio Frequency over Glass (RFoG) standard, after more than two years of discussion and sometimes very testy technical debates. The new RFoG specs enable cable operators to extend fiber lines all the way to homes and businesses without having to switch out their existing headends, back-office systems, set-top boxes, cable modems, and other equipment. As a result, MSOs now have a common way to deploy fiber-to-the-premises (FTTP) networks and deliver multimedia services to subscribers.
In the wake of the SCTE's move, Cable Television Laboratories Inc. (CableLabs) then approved its Docsis Provisioning over EPON (DPoE) specs late last month, after a much shorter deliberation process. This new set of eight specs provides a common way for cable operators to use Docsis provisioning and back-office systems for EPON support. With DPoE now in place, MSOs will be able to deploy Ethernet passive optical networking (EPON) technology over fiber lines, just as telcos already do.
These two separate but related moves should make it easier for North American cable operators to bring multimedia services to their subscribers over FTTP networks. Such a fiber-driven strategy seems critical as MSOs increasingly compete with ambitious fiber builds by such leading telcos as Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T) in the U.S. and BCE Inc. (Bell Canada) (NYSE/Toronto: BCE) and Telus Corp. (NYSE: TU; Toronto: T) in Canada.
Although U.S. and Canadian cable providers have built a few fiber extensions in smaller markets and limited settings over the past couple of years, they have generally shied away from deploying full-fledged FTTP networks. In fact, fiber was pretty much a four-letter word in cable circles until recently, because MSOs feared alarming Wall Street about potentially high capex bills.
That's now beginning to change, albeit slowly, as larger MSOs such as Shaw Communications Inc. and smaller ones such as Bend Broadband start tinkering with FTTP networks in new areas and existing markets. If not exactly embracing fiber networks, cable operators have at least started talking openly about trying them out in a few select locations.
The big question now is how much cable providers will leverage these two new industry technical standards to plant their fiber flag much deeper. At our Cable Next-Gen Broadband Strategies conference in Denver late last month and again at the SCTE Canadian Summit in Toronto last week, equipment vendors have promoted the two new standards and assiduously pitched fiber's virtues. They played up fiber's durability, flexibility, higher capacity, and power savings, among other benefits.
But even fiber's strongest proponents admit that they don't expect RFoG and DPoE to make a big difference, at least not overnight. In RFoG's case, most cable operators and equipment vendors view the standard as primarily a niche play. With the housing construction industry still in the tank, they see MSOs using RFoG primarily for greenfield deployments, rural plant extensions, and business service connections, not the new housing developments that were originally contemplated.
As for DPoE, its backers insist that it's aimed mainly at helping cable operators deliver commercial-class IP and Ethernet services to business customers – not video, voice, and data services to residential subscribers. Although there's no apparent reason why the new CableLabs standard couldn't be used for residential services, nobody is even talking about doing that right now.
So, even though such aggressive rivals as Verizon, AT&T, and Bell Canada are now building fiber networks as quickly as they can, cable operators have not roused themselves from their fiber slumber just yet. It will be interesting to see if they wake up in time.
— Alan Breznick, Senior Analyst, Heavy Reading