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Ethernet equipment

Stimulus Winners Get Active With Ethernet

A substantial number of the rural telcos building fiber optic networks using broadband stimulus funds are bypassing GPON architectures in favor of building active Ethernet networks all the way to the home.

Calix Inc. (NYSE: CALX), which has landed 25 broadband stimulus projects thus far, is seeing about half of those go toward active Ethernet, and seeing most use some active Ethernet for business customers, according to Geoff Burke, senior director of corporate marketing. (See Calix Wins in North Dakota and Calix Wins Tennesee Stimulus Deal.)

Other vendors, including Adtran Inc. (Nasdaq: ADTN) and Clearfield Inc. (Nasdaq: CLFD), also report growing interest in active Ethernet as an FTTH solution. (See GTC Taps Clearfield for Missouri Project.)

The appeal, says Nancy White, president and CEO of North Central Telephone Cooperative, a rural Tennessee company that just chose the Calix E7 Ethernet Service Access Platform for its $49 million fiber project, is the ability to future-proof a network, knowing that the stimulus money is a one-time opportunity.

NCTC serves an area that is extremely rural, located not just 40 miles from the nearest interstate, but 30 miles from the nearest four-lane road. With 20,000 customers spread out over five counties in north central Tennessee and southern Kentucky, NCTC will install 1,000 miles of fiber optic cable under the stimulus grant, reaching 15,000 of those customers and 1,000 businesses or anchor institutions.

"We thought, if we are going to run fiber past them, why not run fiber to them as well," White says. "We offer a video service and I have a security company as well. GPON would work, but you could very quickly exceed the bandwidth. With active Ethernet, we are future-proofing our network."

While active Ethernet requires a home-run fiber connection from the CO to each individual subscriber -- versus passive networks that split the capacity of one fiber to as many 32 homes -- that home-run is accomplished using fiber from the CO to a remote terminal, and from there to the ONT on the side of a home.

"We are basically instantiating a network that is non-blocking throughout," Burke says. "We are putting in an infrastructure that basically runs into no roadblocks from premises to CO. You only have to change out the electronics and you still have wave guide in place, if at some point you want to upgrade."

Some stimulus award winners who have already built a cable headend for video are choosing GPON as their FTTH strategy so they can more easily overlay an RF video signal on the fiber, he says.

Distance is also a factor -- active Ethernet signals can go much farther and so are more suited in some very rural areas.

NCTC's primary goal is economic development for its region, which has lost most of its factory base, and has also seen basic services, such as medical care decline, White says. Many of its aging residents must travel 40 miles to see a doctor and, until NCTC installed a fiber connection to the local hospital in Lafayette, Tenn., it had been using a 1.5Mbit/s DSL link to send X-rays to a technician to be read, sometimes days later.

With active Ethernet connections, NCTC will be able to give anchor institutions such as the hospital, the local schools and libraries much faster connections as well.

Many of the stimulus award winners who have chosen GPON for residential service are using active Ethernet for the businesses they pass, according to Burke, who doesn't miss a chance to tout the Calix E7's ability to support both.

— Carol Wilson, Chief Editor, Events, Light Reading

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spc_markl 12/5/2012 | 5:14:32 PM
re: Stimulus Winners Get Active With Ethernet

Carol,


I wonder whether your article indicates that for all practical purposes, at least at this time in the US, the term “EPON” may be a misnomer as well as misleading.  While it probably does not matter when you are getting free money from the government, does not active Ethernet in general imply the potential for much greater costs than GPON with all of the additional outside plant expenditures, particularly fiber, and less density of the network elements?


Mark, Telecom Pragmatics

cnwedit 12/5/2012 | 5:14:32 PM
re: Stimulus Winners Get Active With Ethernet

Mark,


Certainly the stimulus money is impacting decisions because these folks know this is a one-time deal, and it's more money than any of them are going to see again.


But both the vendors and telcos are saying the cost differential isn't that great. The biggest part of the fiber installation cost is the labor, not the amount of cable, and that is very similar for the two approaches.


 


Carol

spc_markl 12/5/2012 | 5:14:31 PM
re: Stimulus Winners Get Active With Ethernet

Carol,


But if you are probably going to have home-running of fiber more with active Ethernet – in a sizable town, won’t those labor costs be exceedingly high?  Not to mention being awash with fiber and needing to deal with the problem of managing all that fiber.


Mark

spc_markl 12/5/2012 | 5:14:30 PM
re: Stimulus Winners Get Active With Ethernet

Seven,


I realize that.  It was more of a general statement.


But even in a reasonably compact town of say, 7,000 households, I am aware of a case in which over a million dollars was saved in outside plant cost in going with GPON over Ethernet.


Mark


 

paolo.franzoi 12/5/2012 | 5:14:30 PM
re: Stimulus Winners Get Active With Ethernet

 


Stimulus Winner and Sizable Town are incompatible.


 


seven


 

cnwedit 12/5/2012 | 5:14:29 PM
re: Stimulus Winners Get Active With Ethernet

Thanks for the addition - my list was certainly not comprehensive! I suspect there are lots more.

MSBridge 12/5/2012 | 5:14:29 PM
re: Stimulus Winners Get Active With Ethernet

In addition to the wins mentioned in Carol's article, VTX Telecom, a subsidiary of Valley Telephone Cooperative in southern Texas, is using its Broadband Stimulus funds to upgrade services to 15,000 subscribers. They tapped Enablence as their equipment vendor partner for this upgrade.

VTX Telecom offers a full range of telecommunications services – voice, data and video — in 18 exchanges, covering approximately 7,300 square miles and touching 19 counties in South Texas.  Valley says they selected the Enablence platform because of its ability to scale quickly, its cost-effectiveness and the reliability of its products. You can see more on this here: http://www.enablence.com/corporate-investors/press-releases/2011/1/18/valley-telephone-selects-enablence-for-broadband-stimulus

paolo.franzoi 12/5/2012 | 5:14:28 PM
re: Stimulus Winners Get Active With Ethernet

 


Let's use Valley Telephone as an example.  6500 homes in 7500 square miles....


Mark, all I am saying is that 7000 homes equates to about 30K people.  The IOC carriers break at around 10K subs.  Not just a town, but a town and all of its surroundings farms/homes.  So we need to be realistic about who we are talking about:


Tier 1s:  AT&T, Verizon, Centurylink (at least in terms of linecount)


Tier 2s:  Windstream, Frontier (maybe on the border of a Tier 1), Fairpoint, TDS, CBT, Hawaii Tel, Alaska Telephone


Tier 3s:  Pretty much everyone else.


I am sure I have missed some Tier 2s.  But all the Tier 2s ignored the stimulus and there are VERY few Tier 3s that have more than 10,000 lines.


Now, is it cheaper to run GPON over point to point ethernet?  Yes, and I have argued this in the past and pointed to a BT article about this that was written sometime back.  So, I think you are off not by an order of magnitude but just a bit of degree - think 1000 homes max in one of these Tier 3 towns. 


One big advantage of direct ethenet would be that it is easier to get longer distances than you can with GPON by buying longer reach optics versus placement of PON amplifiers (which require that the OLTs support them).  A second advantage for a small company would be that they would not need to have anyone that knew about PON.  When Grandma is your provisioner and Uncle Ed is your installer (don't laugh - this is not far from reality in some of the smaller T3s), having a single ubiquitous technology has its attraction.  I can tell you that sold a lot of gear for us at AFC (don't worry we will have a plug for that service).


seven


 

Mark Sebastyn 12/5/2012 | 5:14:28 PM
re: Stimulus Winners Get Active With Ethernet

Clearfield is a public company symbol CLFD

cnwedit 12/5/2012 | 5:14:27 PM
re: Stimulus Winners Get Active With Ethernet

I will get our records updated.

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