Corning Pipes Up on Last Mile
Despite the industry-wide meltdown, Corning Cable Systems (CCS), a wholly owned subsidiary of Corning Inc. (NYSE: GLW), is suddenly bullish on companies and individuals launching large-scale rollouts of fiber in the last mile.
The company's marketing blitz is being met with skepticism, however. Analysts don't expect extensive last-mile deployments for years to come.
Adding on to the Evolant Solutions umbrella it announced at SuperComm in June (see Corning to Showcase Advanced Fibers), CCS announced its Evolant Solutions for Access Networks yesterday (see Corning Unveils Access Solutions). The company claims the new set of products, services, and support for last-mile fiber deployements will dramatically cut the cost of bringing fiber to the building and the home. The products will be on display at this year’s NFOEC.
"As the Internet continues to grow, traditional networks will have to be redesigned to facilitate that growth,” says Jim Cummins, CCS’s ILEC market manager for public networks, Americas. “We think [fiber in the last mile] is going to be the next step.”
But even if the solution set offers cheaper material and help for connecting the last mile with glass, some observers don't see less costly hardware and services as enough to spur demand. Frank Dzubeck, the president of Washington, D.C., consultancy Communications Network Architects, points out that especially now, the price of the fiber and equipment needed in the rollout is immaterial compared to the real money-guzzlers: labor and gaining access to dig up the ground to lay the fiber. “How can you get rid of the cost of labor? You can’t,” he says, adding that “the customers are not necessarily educated in deploying fiber to the last mile like copper.”
”I don’t care if they can come up with a way to decrease the fiber cost by 99 percent,” says Network Conceptions LLC analyst Phil Jacobsen. “You still have to dig up the ground and put in the fiber.”
"There are still some obstacles,” Cummins admits, but he insists that several of the Evolant solutions, like the Advanced Right-of-Way (AROW) products announced in June, also reduce labor costs and help avoid large right-of-way charges.
As for the hardware products announced yesterday -- the local convergence cabinet (LCC) and the fiber network interface (FNI) -- Cummins says they offer scaleability and flexibility. Unlike many products out there that were initially meant to carry copper, he says, both boxes are specifically made for fiber. The LCC is a box about six-feet tall that can support the interconnection of up to 192 lines of fiber. Because of its scaleable design, Cummins says, customers can add technology such as DWDM as the need occurs. “It’s a pay as you grow approach." The largest FNI box is 14 inches by 13 1/2 inches and is mounted on the side of a building. It can hold from one to 12 fibers.
The Fiber-to-the-Home (FTTH) Council claims that deployments of fiber to the home increased more than 200 percent between July 2001 and July 2002, but some observers say mass deployment is a long way off.
“To make money on fiber to the home, you need to do a massive deployment,” Dzubeck says. “That’s not going to happen for years… I just don’t see it.”
Geoff Wilbur, an analyst with KMI Corp. agrees. “Mass deployment of fiber to the home won’t happen until 05 or 06, and a prolonged recession would push that back,” he says. “I wouldn’t imagine they have a large department working on this. When the market comes around, it will come around slowly.”
CCS’s Cummins admits that it could take a while before we see such wide-scale deployments, but he has no doubt that they are coming. “There may not be mass-deployment today, but we think that this will be the path,” he says, insisting that the company already has customers for its solution. “As a responsible supplier with an eye on the future, supplying options is what we’re about.” CCS claims that it will connect more than 10,000 homes in 2002.
Jacobsen is not convinced. This kind of "build it and they will come" mentality belongs to another era, he says. “This is bubble mentality at a time when we don’t have any money… Certainly any VC that has money would be smart enough not to do this. We don’t even know how service providers are going to charge for services… and we don’t know what people would do with it if they had it. There’s just no business model that justifies this kind of spending.” CCS hasn’t put a pricetag on its new Evolant solutions for access networks, since it says the price will vary greatly depending on each customer's needs. Customers can, for instance, choose whether they require CCS training, support, services, or simply products, as well as how many different products they want to deploy. “It’s like building a car from the ground up,” Cummins says.
At the NFOEC, CCS will also be demonstrating its Access software that will allow customers to explore different deployment techniques, demonstrating the advantages and the prices of different solutions.
In a separate release today, CCS announced another addition to its Evolant solutions -- this time for high-speed metro networks (see Corning Unveils Multimode Fiber). These solutions will also be on display at this year’s NFOEC.
— Eugénie Larson, Reporter, Light Reading