Fiber Access Plans Proliferate
PON, a technology that enables multiple optical channels to share a single fiber via passive optical splitters, hit the big time with last week's news that three RBOCs, BellSouth Corp. (NYSE: BLS), SBC Communications Inc. (NYSE: SBC), and Verizon Communications Inc. (NYSE: VZ) are serious about fiber-to-the-premises and plan to issue a wide-ranging RFP (request for proposal) for PON deployment this month (see RBOCs Hungry for Fiber).
The carriers involved are the prime-target customers PON vendors have longed for, and their announcement set news (and speculation) wheels in motion at the show.
On Tuesday, for instance, Quantum Bridge Communications Inc. announced a partnership with Motorola Inc. (NYSE: MOT). Motorola will use Quantum Bridge's PON technology inside its own broadband fiber-to-the-home aggregation unit, called the ONT1000 (see Next Level Teams With Optical Solutions). The platform will be used for residential delivery of voice, video, and data, the vendors say.
Intriguingly, a company now owned by Motorola, Next Level Communications (Nasdaq: NXTV), by most accounts the market leader in switched digital video, has a similar arrangement with PON vendor Optical Solutions Inc. (see Next Level Teams With Optical Solutions). The deal will enable Next Level to sell its platform as a fiber-to-the-home or -curb solution, adding PON to a range of access capabilities it already has, such as DSL and switched video.
As an interesting aside, Optical Solutions wasn't present at this year's Supercomm. CEO Darryl Ponder is attending in person, but boothless. He says he decided to forego the show months ago, but would probably have changed his mind if he'd known how things would unfold. "This year's Supercomm is turning out to be the hottest show I never exhibited at," he quips.
Motorola hasn't answered whether it plans to pick one PON partner -- or both -- in its response to the RBOC RFP. It's also not clear whether all the parties involved will respond separately, with Motorola alone, or with Motorola and other parties. At press time, a spokeswoman said Motorola doesn't comment on customer-related plans such as these. Spokespeople at Quantum Bridge, Optical Solutions, and Next Level referred us to Motorola.
Motorola isn't the only vendor hedging its bets on the PON RFP. None of the vendors contacted for this story would commit to specific partnership plans -- despite a spate of rumors. Many seem to be waiting to see what the RFP holds before committing to specific alliances. "We can't wait to get it and see," says Bill Shank, VP of sales and marketing at Paceon. He says it's not clear whether the carriers will ask for fiber-to-the-curb, in which aggregation devices for other access technologies may come into play, as well as fiber-to-the-home, which includes dedicated PON facilities [ed. note: or, perhaps, fiber-to-the-middle-of-the-front-lawn, which includes water sprinklers].
Whatever is called for, one thing is clear: Partnerships will be vital to the effort, because so many vendors have just one piece of the puzzle. Quantum Bridge and competitor Terawave Communications, for instance, started out focusing on business PONs. Others, such as Optical Solutions, have taken more interest in rural residential rollouts. Vendors that don't already have partners will need to cover their options in video and fiber-to-the-whatever aggregation.
There's also the question of whether the RBOCs will focus on one kind of PON technology over others. A range of alternatives exists for implementing PONs -- Ethernet PONs from the likes of Alloptic Inc. are often presented as competing with ATM-based ones from the likes of Quantum Bridge, for instance (see Alloptic Scores $35M). And some vendors, such as Wave7 Optics Inc., suggest a combination of PON with active-component alternatives.
There's also the chance the RBOCs could balk, even after the RFP is delivered and decided. One variable is the regulatory environment. "I'm excited about fiber to the premises," said Ralph Ballart, VP of broadband at SBC, in an interview this week (see Telcos Tackle Triple Play ). "The technology is ready and it's mature. Now we're waiting for the FCC rules. They promised relief, but we need to see it and look at the fine print. Fiber all the way to the premises is a hard business case. If you take that risk, you want the reward."
There have been disappointments before. Paceon, for instance, won a contract with BellSouth a couple of years back, only to be told the project they'd applied for was canceled. Marconi Corp. plc (Nasdaq/London: MONI), too, has been in a range of RBOC trials with PON gear for a couple of years. But, as with some of its competitors, not much has come of it.
Now, the stakes are raised again, and, as ever, PON vendors hope this time it's for real. The response of Frank Lockwood, VP of marketing at Terawave Communications, was typical: "We're very upbeat. The announcement shows there's an end to the tunnel, and there's light there, and it's access."
— Mary Jander, Senior Editor, Light Reading