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Optical/IP

FTTH Dispute Boils Up

What began as a cheerleading session for fiber-to-the-home (FTTH) this week looks to have wedged Alcatel SA (NYSE: ALA; Paris: CGEP:PA) and Corning Inc. (NYSE: GLW) into an awkward space.

At the annual Fiber-to-the-Home (FTTH) Council conference in New Orleans, the equipment manufacturers reportedly were asked to support opposing camps -- one led by keynote speaker Kevin J. Martin of the U.S. Federal Communications Commission (FCC), the other led by key customer BellSouth Corp. (NYSE: BLS).

The fight is over the definition of FTTH, which has important regulatory consequences. The FCC says FTTH services require a fiber loop that runs all the way into the customer's home. In its Triennial Review released in August (see FCC Rules Out!) the FCC says FTTH services can remain unbundled -- that is, exempt from forcible sharing at reduced rates with competitors, which is required of incumbent carriers in other parts of their networks.

BellSouth wants the definition of FTTH to be widened to include not only fiber links into houses, but also fiber to the curb (FTTC). The RBOC says so-called FTTH services, such as triple-play voice/data/video offerings, can be delivered effectively through fiber links from the central office to the curb or neighborhood box, where individual homes tap broadband services via copper. BellSouth has spent heavily in recent years to deliver broadband services this way. It resents having its broadband initiative hampered by what it views as a short-sighted definition by the FCC.

Now here's what happened this week: According to one FTTH Council conference attendee, analyst Timm P. Bechter of Legg Mason Inc., commissioner Martin used his keynote to ask the council to formally support the FCC in its efforts to keep the definition of "fiber to the home" the way it is now.

Bechter says Alcatel and Corning, both conference sponsors as well as key members of the FTTH Council, felt pinched because BellSouth has pressured them to back up the carrier on this issue. At the same time, a BellSouth spokesman today confirmed that the carrier wants the vendors to support its position.

What's an equipment vendor to do? Both Alcatel and Corning are driving forces behind the FTTH Council, which invited Martin to speak and has announced its support for FCC decisions in the past (see FTTH Council Applauds FCC). At the same time, BellSouth is clearly an enormously influential customer for both. How can both masters be served?

Some apparently hope the matter will go away if no one pays attention. Officials at Alcatel and Corning both declined to comment on the issue. Leonard Ray, market development manager at Corning's Global Broadband Group, who also is FTTH Council Government Relations co-chair, did not return a call at press time. A call to the FTTH Council main number went unanswered, as did an email to commissioner Martin.

Bechter of Legg Mason thinks the vendors and the FTTH Council shouldn't stay mum for long. In a note to clients today, he says the group has a chance to take a stand against what he sees as BellSouth acting in its "own self-interest" in this matter of redefining FTTH. He says opening the definition to include fiber to the curb goes against the "goals of the FCC, the FTTH Council, or the economic interest of the country." In his view, though, the FTTH Council will probably do nothing to formally oppose either the FCC or BellSouth.

This isn't the first time an RBOC has taken a strong stand against the FCC that's had a potential impact on suppliers. Last month, SBC Communications Inc. (NYSE: SBC) appeared to backpedal on support of an RBOC PON (passive optical networking) RFP in light of FCC actions (see SBC Ratchets Up PON Politics). BellSouth and Verizon Communications Inc. (NYSE: VZ) also are part of that RFP, but analysts recently have questioned the seriousness of any of the incumbents in rolling out PON deployments in the near term.

— Mary Jander, Senior Editor, Light Reading

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Dredgie 12/4/2012 | 11:20:39 PM
re: FTTH Dispute Boils Up

Gǣthe FCC says FTTH services can remain unbundledGǪGǥ

Surely this should read something like Gǣthe FCC says FTTH need not be unbundled [to competitive carriers] while FTTC must be unbundled.Gǥ
photonsu 12/4/2012 | 11:20:36 PM
re: FTTH Dispute Boils Up So what happens to bundling in the case of a FTTC (router/hub / FTTH distribution architecture? Seems to me this is an all-around winner that has none of the limitation of the PON.
photonicGuru 12/4/2012 | 11:20:35 PM
re: FTTH Dispute Boils Up I confer with the FCC that FTTH services require a fiber loop that runs up till the customer's home. Widen the definition of FTTH leaves again the poor customer with copper loop and paying the RBOC for each augmented byte everytime whenever they move from one broadband technology to another.

one do not understand the comments such as

"The RBOC says so-called FTTH services, such as triple-play voice/data/video offerings, can be delivered effectively through fiber links from the central office to the curb or neighborhood box, where individual homes tap broadband services via copper"

What does that mean? If fiber runs all the way to the customer's home then customers' can't get the triple play?

New DSL architecture release by DSL forum suggested that one can have triple play over DSL line - all copper. However, that doesn't mean FCC include DSL into definition of FTTH. This is not fair....FCC is a fed organization, they should take the long term view instead of short term profit making views of RBOS(harks)!!

Cheers....
strands555 12/4/2012 | 11:20:34 PM
re: FTTH Dispute Boils Up Bell South is nuts,in claiming FTTC is equal to FTTH, just because the data rate they choose to provide is similar in either case. By their logic, a fiber-fed wireless access point serving the last mile should also be called FTTH. Why should fiber-fed copper over a similar distance be given FTTH "status" but not wireless? Heck, why stop there? Next thing you know the cable MSO's will want HFC to qualify as FTTH. It's just not a good precedent to set.

On the other hand, in Japan they are counting fiber to an MTU (w/ copper distribution from a switch within the MTU) in their FTTH numbers, which is essentially what Bell South is asking for. That doesn't make it right, but they do have something similar to point to.

FTTH shouldn't be defined in terms of data rates that SP's choose to provide today. It should be as simple as: to be counted as FTTH in market numbers, each individual dwelling (whether detached or part of a multi-dwelling unit) must have an optical connection at the ingress point to the dwelling. If it is instead wireless or copper or even free-space "optics" (even if a true optical connection is only 50 feet away) it is not FTTH. The aggregate data rate of the service(s) provided today should not even enter into it.
bonnyman 12/4/2012 | 11:20:34 PM
re: FTTH Dispute Boils Up "Fiber to the curb" is one of the great examples of marketing "spin". Ask folks what they think it means, and most will tell you it means fiber to the curb in front of their house (or perhaps their immediate neighbor's house) and a copper drop into the house of perhaps 50 or 100 feet.

They're wrong. More often it's one fiber link shared by several dozen homes served with 500' copper runs.

Here's a pro-FTTC propaganda piece from Marconi:
http://www.convergedigest.com/...

The author writes:
"The GǣModifiedGǥ POTS only model is depicted in Figure 2 and has also been deployed as an even better economic solution for FTTC deployment. In this model, every other ONU is populated with electronics, and each ONU turned up supports twice as many living units, or 14.4 in this example.- Under this scenario, all ONUs are placed, while every other ONU is turned up.- The FTTC system supports POTS delivery at distances up to 1500 feet from the ONU.- Thus, for narrowband service delivery, populating every other ONU is a feasible option.- As enhanced services are desired, all ONUs are GǣenergizedGǥ so that broadband services may be delivered over the 500 feet of copper without requiring advanced, or any, modulation techniques, such as Very High Speed Digital Subscriber Line (VDSL)."

In other words, if BellSouth gets its' way and uses this model, they eliminate their competition while getting a free ride to stick with copper and POTS (plain old telephone service). They don't even have to offer DSL ("maybe this will induce folks to keep paying for second line for their modem"), let alone advanced video services.
palomar7 12/4/2012 | 11:20:34 PM
re: FTTH Dispute Boils Up Actually there's even a more straight-forward way to resolve this: stop calling it FTTH.

Instead, call it FFTH (fiber from the home). There can be no doubt that FTTC is not equivalent to FFTH.
lastmile 12/4/2012 | 11:20:32 PM
re: FTTH Dispute Boils Up "The RBOC says so-called FTTH services, such as triple-play voice/data/video offerings, can be delivered effectively through fiber links from the central office to the curb or neighborhood box, where individual homes tap broadband services via copper. BellSouth has spent heavily in recent years to deliver broadband services this way."

BellSouth may have spent heavily to deliver DSL.
What the FCC wants is deregulation for a product that is far superior to DSL. BellSouth has no triple-play offerings as of today. The last 50-100 feet of copper is as good as FTTH. What they are fighting for is the last 3000 feet of Copper because they control it. FTTC and FTTH are two different aspects of the last mile problem.

Only FTTH should be deregulated completely period.
The FCC is correct.
sevenbrooks 12/4/2012 | 11:20:31 PM
re: FTTH Dispute Boils Up
So, does fiber to the home have to go to an actual apartment or is the apartment building good enough?

If DSL is put within 500 feet and one gets 50Mb/s to every home, why is FTTH so much better?

If one can do Voice, Video and Data over DSL (and its being done today), what does FTTH bring the consumer?

seven
mrblobby 12/4/2012 | 11:20:31 PM
re: FTTH Dispute Boils Up I submit that the core of the issue is whether unbundling mechanisms currently in place (specifically pricing) fairly compensate investors in new infrastructure.

Unbundling regulations have historically been put in place in order to secure competitive access to infrastructure that has long been in place and paid for (e.g. copper loops). The fact that many jurisdictions require unbundling prices to be based on incremental costs reflects this. That is: the owner of the infrastructure is only paid for whichever bits of network are specifically needed for providing the unbundled service (e.g. _additional_ capacity).

This scheme causes infrastructure owners not to be paid for the basic investment needed to enable the service to be set up in the first place (such as, for example, the increased fibre penetration needed for a VDSL deployment).

One would hope (but I haven't checked whether the FCC have done so) that regulators would do away with the incremental aspect of unbundling pricing when regulating services based on new types of infrastructure, rather than those based on infrastructure that has already been fully depreciated. Only then is investment suitably incentivised.

If that is indeed the case, then I agree with other posters that the RBOCs should not have any reason to oppose unbundling of fibre-based services, whatever the level of fibre penetration.
lastmile 12/4/2012 | 11:20:30 PM
re: FTTH Dispute Boils Up "If DSL is put within 500 feet and one gets 50Mb/s to every home, why is FTTH so much better?"

sevenbrooks

If the RBOC's had any intention of getting DSL within 500 feet of (any) home they would have done it a long time ago. This would have provided the consumer a true broadband connection and not 'fraudband' at about < 1.5 mb/s. The RBOCS are using their earlier deployment techniques to suggest to the FCC that this indeed is FTTP (and should be unregulated)

Yes a few Bells have invested heavily in fiber, but with no intention of getting fiber closer than what is required of DSL.

Clarification regarding fiber to an apartment complex is due any time soon and it is my belief that the FCC will not insist on fiber all the way to a home/apt if short strands of Copper are involved. If 500 feet of Copper can get us consumers 50Mb/s then the Copper involved should be treated as a necessary part of FTTH.

There is a big difference between 500 feet of Copper and 3000 feet of Copper.

JMHO




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