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Cable/Video

DSL Revival

CHICAGO – Supercomm 2004 – The biggest news this week at Supercomm? SBC says fiber’s coming to the ’hood. The service provider declared that it intends to spend $4 billion to $6 billion on new deployments of so-called “fiber to the neighborhood,” or FTTN, over the next five years.

So what’s it all mean? The most common interpretation of SBC’s big announcement is that telecom spending is back, and fiber access is where the action is. But this interpretation is simplistic, and, for the most part, just plain wrong.

Why’s that? First of all, there weren’t many details on what type of equipment SBC would be buying to deploy these new FTTN networks, so it’s a major leap of judgment to pick who’ll benefit (example: “Buy JDSU!”). More on this later.

Secondly: Overall, SBC hasn’t necessarily said that aggregate capital spending (capex) numbers are going up. After all, technological advances mean it should be able to do more with less money. Keep in mind that SBC’s capex budget in 2003 was about $5 billion. So if that figure holds, and it spends $5 billion over five years on FTTN – the middle end of the range – it’ll only consume about 20 percent of its capital spending budget. These numbers are still relatively small compared to bubble-era spending.

To put things in perspective, the cable industry spent nearly $100 billion over eight years to build out its networks, according to the Congressional testimony of Comcast chief Brian Roberts.

All of this isn’t necessarily bad. It’s great that SBC’s acknowledged some advances in technology, that it's willing to make the investment in broadband, and that it may now be able to do so in a measured, calculated fashion. I do think it will accelerate the deployment of broadband. But where folks get this wrong is what it means for specific technology platforms.

I think the big winner here isn’t PON or even fiber optic doodads. It’s DSL, as well as the packet-switching, routing, and aggregation gear – such as the broadband remote access server (B-RAS) – that's needed to deploy and manage DSL services (see New DSL Network Architectures).

Here’s why: The advent of newer technology in the DSL market, including the ADSL2+ standard and coming VDSL gear, much of which has been displayed here at Supercomm, means that service providers can squeeze in even more bandwidth than ever before. ADSL2+ will get them to 25 Mbit/s, which is plenty of bandwidth for voice, data, and video – even HDTV.

According to SBC, it’s defined its new FTTN strategy as pushing fiber deeper into residential neighborhoods, but not necessarily directly to homes. The bulk of cases will most likely make that last leap to the home over copper lines. It’s actually quite a sensible strategy: Push fiber out as far as you can without the hassle of digging up everybody’s yard and laying fiber – 50 percent of the cost of which comes in the form of expensive labor, according to research from Light Reading Insider. Then use new, improved DSL to make the last leap of a few thousand feet.

There’s evidence that this is a growing trend among service providers, as they have been demonstrating a healthy interest in B-RAS gear. The next-generation B-RAS targets higher DSL subscriber counts and quality-of-service technology that will allow service providers to deliver different levels of service. Service providers like this stuff.

Will SBC deploy fiber directly to some homes? Of course – but most of those are likely to be in new developments, which is a tiny percentage of SBC's present telecom plant. FTTH will happen eventually, but right now we’re hitting the sweet-spot of DSL deployments, and the technology is really starting to come together.

This all comes as good news for broadband enthusiasts, but be careful about the assumptions you make about specific equipment categories. Service providers will continue to experiment with a wide range of access methods and technologies, including PON, Ethernet-over-fiber, DSL, and wireless.

It’s also clear that throughout the telecom downturn, innovative access technologies such as ADSL2+ and newer B-RAS gear have been marching forward – giving the service providers more tools with which to pursue a multifaceted broadband strategy.

— R. Scott Raynovich, US Editor, Light Reading


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lightbeer 12/5/2012 | 1:30:48 AM
re: DSL Revival Scott,

Nice job of summarizing some of the technology aspects. The missing part and most important point is the regulatory side. As I mentioned in another thread "The Ed show" has been going on for quite a long time now. It goes something like this: FCC starts to make noise about changing or modifying copper tarrifs and regulations....Ed dangles the carrot of spending infinite amounts of money on Fiber in the Loop if the FCC sees things his way. FCC goes away and ponders a little more, tinkers around the edges and the whole cycle starts again. This started shortly after the Telecom Act in 1996 and we are closing in on ten years of the "Ed Show". Maybe the Acadamy will one day recognize his acting abilities and give him the Acadamy award he so richly deserves.

In the meantime the real RBOC business will be trying to break the back of the Union and doing technology upgrades where they can see a return in 3 years or less.
lastmile 12/5/2012 | 1:30:19 AM
re: DSL Revival "HereGĒÖs why: The advent of newer technology in the DSL market, including the ADSL2+ standard and coming VDSL gear, much of which has been displayed here at Supercomm, means that service providers can squeeze in even more bandwidth than ever before. ADSL2+ will get them to 25 Mbit/s, which is plenty of bandwidth for voice, data, and video GĒō even HDTV."

25 M/S is possible only if Fiber is put deeper into residential neighborhoods, but not necessarily directly to homes. In terms of distance the requirement for ADSL is far more stringent compared to DSL. FTTN/FTTB/FTTX/FTT? are acronyms used to justify fiber closest to the end user.

ADSL and DSL are in no way similar because there is too much of fiber in ADSL.
paolo.franzoi 12/5/2012 | 1:30:12 AM
re: DSL Revival
DSL - Generic acronym for all DSL flavors.

ADSL2+ - One of those variants.

The basic need for ADSL2+ to reach 24 Mb/s is around 5 Kft. Given the bandwidth used, that is pretty close to the Shannon/Nyquist limit given the alloted power for transmit.

Rate/Reach curves for all DSL types converge around 8 - 9 Kft. This is the point at which (given the FCC power limit and the desire to support baseband voice on the same line) the Shannon/Nyquist limits rule the technology.

Interesting to note that none of the SBC folks who would be in charge of making this happen had any idea that this was coming.

seven
Scott Raynovich 12/5/2012 | 1:30:09 AM
re: DSL Revival "Interesting to note that none of the SBC folks who would be in charge of making this happen had any idea that this was coming."

Seven,

That's interesting. Are you saying that the technology planning staff at SBC had no input into the now-famous "$6B FTTN program" announced by Whitacre?

If not, then what are they working on?

I'm curious as to what you think about current broadband access architectures and which strategies would be most cost-effective in getting the most broadband to the market as fast as possible.

--Scott
paolo.franzoi 12/5/2012 | 1:30:06 AM
re: DSL Revival
If you read the Whitacre stuff carefully and spoke to SBC, you would find that this is not an incremental budget at all. There is in fact a small incremental budget of up to around 10% of the amount you listed if things go swimmingly.

Its rather a game to play to show the regulators that SBC is playing just like BellSouth and Verizon. They are saying thank you regulators and keep up the good work.

As for Broadband Architectures, Cable did its investment so it has its lead. If you mean triple play with HDTV support, BellSouth has the right idea. However, they know that they are just spending money to spend it again on Fiber Access. It frustrates them terribly. If you are talking about pure high speed Internet Access, the DSL architectures today seem to be working just fine. In the long run, Verizon is taking the approach that will cost the least amount of capex. They are driving to the ultimate solution and skipping the intermediate steps (one wonders if Sprint PCS now wishes they had copied this model from Verizon Wireless).

I note that you did not notice BellSouth's announcement from the day before about Video over DSL trials. That is significantly more real than what Whitacre said.

seven
paolo.franzoi 12/5/2012 | 1:29:38 AM
re: DSL Revival
From a high level viewpoint, SBC has talked about FTTN for over a year. The Senior Tech guys found out about this announcement say 24 hours before it went out.

There is nothing specific going on in TRI to support this yet.

seven
Scott Raynovich 12/5/2012 | 1:29:38 AM
re: DSL Revival "If you read the Whitacre stuff carefully and spoke to SBC, you would find that this is not an incremental budget at all."

So you are talking about the budgeting aspect, not the technology. Obviously the engineers "knew this was coming," because they had been working on it.
Scott Raynovich 12/5/2012 | 1:29:37 AM
re: DSL Revival "From a high level viewpoint, SBC has talked about FTTN for over a year. The Senior Tech guys found out about this announcement say 24 hours before it went out."

Well, I guess they should read the paper. Or LR (lol). All kidding aside, this conflicts with what I've heard. I'm curious as to where you get your information.
paolo.franzoi 12/5/2012 | 1:29:35 AM
re: DSL Revival
My sources are within TRI. Beyond that I will not give names or additional details.

seven
dodo 12/5/2012 | 1:29:34 AM
re: DSL Revival Scott
it is SBC Technology Resources Inc (TRI), which is headquartered in Austin, TX.

EOM
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