Sources: RBOCs Are Gawking at GPON

The three largest U.S. RBOCs -- BellSouth Corp. (NYSE: BLS), SBC Communications Inc. (NYSE: SBC), and Verizon Communications Inc. (NYSE: VZ) -- are considering gigabit passive optical networks (GPON) for the next phase of their broadband fiber buildouts, based on a request for information (RFI) sent to industry equipment suppliers.

The RFI came out sometime around April 28, and responses from equipment vendors were due Friday, May 20, according to multiple sources.

"We expect to see an RFP [request for proposal] issued at the end of the summer," says Don Parsons, director of marketing for PON chip vendor BroadLight Inc..

But some aren't convinced the RFI points definitively to GPON.

The RFI "was very broad and asked for a little bit of everything -- GPON, EPON, BPON," says Mark Abrams, director of marketing for Passavé Technologies Inc., another PON chip vendor. The mix was a surprise, he says, because many in the industry were expecting an all-GPON RFI. "I don't want to use the words 'fishing expedition,' but it left it unclear what the future plans are for PON in North America."

One reliable source in the vendor community gave this account: "It asked about pricing of various forms of BPON, GPON, and EPON with different constraints... It was very much a fishing expedition."

Still the RBOCs' GPON inquiries are worth noting because two of the RBOCs -- BellSouth and SBC -- weren't using PONs to begin with in their respective fiber-to-the-curb and fiber-to-the-node networks. Both have relied on point-to-point optical connections that terminate before reaching the home, with DSL technologies connecting that last segment. SBC, however, does also have some select FTTP deployments where it is using BPON technology (see SBC Takes a Dip Into PON).

Verizon has been using BPONs, however, taking equipment from Motorola Inc. (NYSE: MOT) and Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA). Motorola is the most recent supplier Verizon picked and, in a telling development, has equipment that it says can support BPON and GPON concurrently (see Moto Gets a Piece of Verizon FTTP).

But the industry has seen a sprinkling of hints that RBOCs want GPONs. The driver, as is the case for so much in telecom lately, is IPTV. GPON's higher bandwidth -- 2.5-Gbit/s downstream and 1.25-Gbit/s upstream, compared with BPON's 622-Mbit/s downstream and 155-Mbit/s upstream -- makes it a better candidate than BPON for video delivery. Also, GPONs are based on Ethernet and IP, while BPONs use Asynchronous Transfer Mode (ATM).

"This is part of a larger realization that BPON doesn't have the flexibility or speed to do what telephone companies are convinced they need to do for consumers," says Millennium Marketing's principal analyst, Kermit Ross.

Even the joint RFP for FTTP that the three RBOCs issued in 2003 had some specific questions about vendors' GPON capabilities. "Please describe your views on, plans, and cost impact for evolving your FTTP system to support GPON downstream linerate of 1.2 Gbps... Can your OLT support PON interface cards with 1.2 Gbps downstream," the document asks. "Please provide... details on cost for OLT and ONT for evolving to 622 Mbps from 155 Mbps for upstream direction compared to remaining with 155-Mbps upstream."

Alcatel, which has admittedly been developing a line of GPON products, dropped strong hints that the RBOCs were up to something GPON-related during its most recent earnings call. "There is also now a move we are seeing for fiber-to-the-home... I think you would probably see some interest from all three of the larger RBOCs in the U.S. in GPON technology," said Alcatel president Mike Quigley, during the call. "I think the game, when we look for fiber-to-the-home... is going to be around GPON and there would be a fair bit of activity during 2005 in that area."

Even with the RBOCs looking ahead to GPON, the BPON business is still seeing more entrants, with large players such as Siemens AG (NYSE: SI; Frankfurt: SIE) dropping in (see Siemens Enters BPON Business).

What of EPON, the Ethernet alternative? The RBOCs won't go for it because GPON, standardized by the International Telecommunication Union (ITU), has stronger operations, administration, and management (OAM) standards in place, BroadLight's Parsons says.

The Institute of Electrical and Electronics Engineers Inc. (IEEE), which crafted EPON as part of the Ethernet in the First Mile standards, is still working on getting OAM in place, Parsons says. "They're not really working on interoperability. They're trying to muscle each other out," each hoping theirs will become the de facto standard, he says.

As far as GPON suppliers go, Optical Solutions Inc. has been peddling the technology for three years, scoring handfuls of wins among small-market and rural carriers (see Optical Solutions Secures GPON Contract and Optical Solutions Wins GPON Contract -- they're not the same, honest). FlexLight Networks Inc. has been selling GPON equipment as well (see FlexLight Wins GPON Order).

BroadLight appears to be the first to offer a merchant GPON chipset, with a product line announced Monday (see BroadLight Intros GPON Chips). Those devices are due to ship in November and December, making it possible for BroadLight-laden GPONs to hit the market in mid- to late-2006.

The RBOCs might be aiming to deploy right around then. "It's been hinted from the carriers that that's how things are going to pan out," Parsons says.

Neither Passavé nor EPON rival Teknovus Inc. has announced plans for GPON chips.

BellSouth and SBC expect to use GPONs mostly in greenfield installations, Parsons says. Verizon is taking the more aggressive approach of doing overlay GPONs as well, "because they have a very large overhead [versus underground] outside plant -- they don't have to trench."

One surprise in the RFI is the preservation of a three-wavelength architecture for GPON, according to Passavé's Abrams.

That's the setup used in BPON, which reserves one downstream wavelength for broadcast TV, putting all other downstream traffic on a second wavelength. (The third wavelength is the upstream side.) Because GPON has enough oomph to carry TV, it was expected that GPON implementations would be a two-wavelength affair, Abrams says.

"There were questions [in the RFI] about GPON and EPON with RF overlays," Abrams says, referring to the use of the broadcast TV wavelength. He notes that Verizon, having deployed some three-wavelength BPONs, "might have insisted on having it in there."

It's no surprise that the RBOCs aren't saying much about their plans at the moment. But they aren't smacking down the idea, either.

SBC spokesman Wes Warnock wouldn't comment on any of that carrier's RFI or RFP activity. But he did offer this regarding an eventual move from BPON to GPON networks: "GPON is definitely something we're interested in and we do see that evolution taking place in the next few years."

— Craig Matsumoto, Senior Editor, and Phil Harvey, News Editor, Light Reading

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