BT Group plc (NYSE: BT; London: BTA) announced a fiber-to-the-home (FTTH) deployment at a new housing development in Southeast England today, claiming its access network offshoot, Openreach , will be able to provide access speeds of up to 100 Mbit/s to end users, with technology from Huawei Technologies Co. Ltd.

The new development is at Ebbsfleet Valley in the English county of Kent, where, during the next 25 years, about 10,000 homes will be built. The first homes will be built and hooked up in August.

Openreach is building a fiber access network using GPON equipment from Huawei, which is already an access and optical equipment supplier for BT's £10 billion (US$19.6 billion) 21CN next-generation network project. Huawei launched its GPON platform in 2006. (See BT Unveils 21CN Suppliers, Vendors Sign BT 21CN Contracts, BT's 21CN Deals: Booty or Bloody? , and Huawei Launches FTTx Products.)

Once built, Openreach plans to offer a wholesale access product, called Generic Access Ethernet (GAE, totally), to the U.K.'s service providers (including BT's retail business), comprising 10 Mbit/s downstream and 2 Mbit/s upstream.

While it may seem somewhat counterproductive to build a fiber access network to offer only 10-Mbit/s access, the carrier says that service providers taking capacity on the network will be able to buy two higher-speed products from Openreach -- one that offers up to 30-Mbit/s access, and one that offers up to 100 Mbit/s, though both of those speeds are peak rates, and not guaranteed.

No financial details, about pricing or the capital cost of the deployment, were available.

And for BT, the deployment is as much a fact-finding mission as anything else.

"This is really a test bed," notes a BT spokesman. "The best way to find out how this all works is to do it. That's how we'll find out what services are used, what speeds people want, which service providers are interested in the [wholesale] service. We'll learn plenty from this."

Heavy Reading chief analyst Graham Finnie says this is a "great win for Huawei," but notes that GPON technology, where fiber connections are shared by multiple end users, is perhaps not the most suitable technology option for such open access networks, where wholesale access to multiple service providers is planned.

Finnie notes that "it's much easier to build an open-access network with active Ethernet technology," where each end user is connected with a dedicated fiber connection, hence enabling dedicated (not best effort) broadband speeds of 100 Mbit/s downstream and 50 Mbit/s upstream.

That hasn't stopped GPON's most vocal supporters from touting the passive access technology as being very suitable for wholesale activities -- Alcatel-Lucent (NYSE: ALU) already has its GPON gear deployed by network operators, such as Swedish utility firm Jönköping Energi, that are offering wholesale access. (See Alcatel-Lucent Wins GPON Deal.)

Finnie also notes that BT's base-rate broadband offer of 10 Mbit/s is "very disappointing," especially compared with the much higher, dedicated fiber access speeds being offered just across the Channel in France. (See Iliad Gets Active With FTTH and Neuf Launches 50-Mbit/s FTTx.)

The Heavy Reading analyst adds that French regulator Arcep is currently grappling with the regulatory challenges of competitive access to fiber access networks, and deciding exactly how and where in the physical network competitive access should be enabled. (See FT Wants Open Ducts.)

No change to BT's FTTH policy
BT stresses that the Ebbsfleet deployment doesn't herald the start of an FTTH revolution in the U.K., and that its access network strategy hasn't changed.

BT has been saying for some time now that fiber access, or Next Generation Access (NGA) as it also calls it, makes economic sense in greenfield sites, where new access infrastructure needs to be laid.

Where it already has copper access lines, though, the carrier maintains that it's uneconomical to replace that infrastructure with fiber because of the upfront costs. "There would be no guaranteed payback. We couldn't go to our shareholders with that sort of proposition," says a spokesman.

"But we are committed to looking at how a fiber upgrade of the existing network could be done if the economic case got better. But with new builds it absolutely makes sense to install a fiber access network," he adds.

So BT is looking at the possibility of deploying FTTH in all new housing projects, which, if the current U.K. government's plans are executed, could see the construction of 3 million new homes during the next 12 years.

That would require a change in the current regulations, though. The U.K.'s current telecom rules are based around BT offering wholesale services over copper infrastructure. The carrier says it has been awarded special exemption by U.K. regulator Ofcom for the Ebbsfleet rollout.

For further FTTH deployments, "Ofcom would need to update the regulations," something that's being discussed at the moment with BT and the U.K.'s competitive operators. (See Ofcom Checks Out B'band.)

In the meantime, BT is upgrading its DSL broadband base to ADSL2+, and plans to introduce broadband services of up to 24 Mbit/s during the first half of this year.

— Ray Le Maistre, International News Editor, Light Reading