Hey, Cable Guys! Don't Ignore FTTH
2:10 PM -- Has Verizon Communications Inc. (NYSE: VZ) seen past the critics of fiber-to-the-home (FTTH) in realizing that it will ultimately be the end game? Just be careful trying to convince the cable industry or telcos such as AT&T Inc. (NYSE: T), which have their own vision of what the broadband landscape should look like, at least in the near term.
But not to be too over optimistic, FTTH is costing Verizon on the front end.
But as we peer into where broadband, video, and wireless are headed, both now in the long term, one must wonder how cable's networks will stand up with the onslaught of applications, file sharing, video content, and data needs driven by femtocells. Their current platforms aren't necessarily engineered to carry all of the above, and not at the speeds consumers, and businesses, will demand down the road.
Yes, FTTH is expensive to build, and making the case for this type of capital commitment has to be a hard sell in the confines of the boardroom. After all, MSOs have been making stellar profits, even in a down economy, while continuing to believe that building capacity, redundancy, and low latency does not necessarily add to shareholder value.
A switch to FTTH would take time and money, something executives should be planning for now, and not just relying on Docsis 3.0 or AT&T's U-verse architecture to carry them through to the end. Unfortunately, executives continue to focus on the short term, which correlates to the quarterly profits Wall Street has mandated for them.
Looking forward technologically is seemingly not on the cable industry's immediate agenda -- but it should be, and faster than anyone imagined a few years ago. [Ed note: Cable's not about to wreck a perfectly good hybrid fiber/coax (HFC) plant, but don't cable's ambitions with RF over Glass (RFoG) and Docsis-enabled PON systems count for something?]
Consider that municipalities as well as some countries are getting on the FTTH bandwagon, bypassing traditional cable construction while realizing the many benefits of this type technology.
Other FTTH benefits include its relative "greenness"; plus it offers a cheaper alternative to maintaining copper wires, not to mention the long-term capacity benefits. Yet, some naysayers could offer opinions that money is better spent on other things as profits continue to rise, and consumers are not complaining.
Is this not why the Federal Communications Commission (FCC) is currently revisiting the rules governing broadband -- that restricting or blocking access to broadband networks has initiated a firestorm of complaints, not only from consumers, but also from Google (Nasdaq: GOOG) and other businesses that have something at stake here? (See FCC Sets Sail on Internet Rulemaking and FCC's Net Neutrality Plan Faces New Attack.)
The point is that an investment in a long-term technology like FTTH might keep governmental agencies from over regulating your industry out of business, while also keeping immediate and future competitors at bay. Does that not make good business sense in the long term?
— Leonard Grace, a cable industry vet, is a telecom strategist and blogger. He can be reached at [email protected]. Special to Cable Digital News