FTTP Debate Heats Up
It's now clear that the fiber to the premises (FTTP) debate has become a central issue facing the telecom industry.
Today it reared its head again in a Light Reading Webinar, "Fiber to the Premises: Closing the Capacity Loop," moderated by Heavy Reading chief analyst Scott Clavenna.
A primary conclusion among Webinar participants was that the competitive threats from cable providers are likely to be the main catalyst for widespread FTTP in the next several years. In an audience poll taken at the end of today's event, 36 percent of the respondents said competition -- not services, regulatory freedoms, nor opex reductions -- would be the critical driver for FTTP deployments. Only about 6 percent of the poll's respondents said that fiber does not need to touch the consumer.
The FTTP question has come front and center, as demonstrated by this week's guest column by venture capitalist Drew Lanza, which has already chalked up a lively thread on Light Reading's message boards (see Fiber's Sticky Wicket). Lanza, as well as others, have argued that ubiquitous fiber deployments are just too expensive -- and possibly unnecessary -- so it's unlikely they'll happen in the next 10 years. (For more viewpoints, see also DSL Revival , FTTP Influenza, VPLS & the Third Mile, and Car Pools & QOS.)
Many of today's Webinar participants counter that FTTP's momentum will increase, because the race is about access network dominance, not finding the killer application that will force more bandwidth demand. Granted, many of these proponents are equipment providers, so they do have an axe to grind.
Don McCullough, director of product marketing for Entrisphere Inc., said it all comes down to the race for innovative broadband services. "If you don't have the best access network and can't pump the most bits, you're going to lose that battle," he says.
Many fiber access proponents have long held that carrier cost savings were paramount in the carrier's decision to deploy fiber access technologies. But the ability for cable providers to sell triple-play services, in concert with the decreasing cost of fiber access gear, has eroded the argument.
Industry analysts Kermit Ross and John Celentano have been vocal against the notion that FTTP really adds up to carrier opex savings. Ross and Celentano, in a call hosted by Jeffries & Co. analyst George C. Notter in July, said that the equipment deployed at customer sites in a fiber network -- especially in the case of residential customers -- creates additional operating expenses that fully offset the opex benefits of having a fiber network.
"Customer ownership of batteries and power supplies, configuration issues, and failures might be ongoing sources of operational expenses at the customer premises," wrote analyst Notter in a July 30 note to clients.
Another argument in the FTTP world concerns whether active Ethernet will overtake any of the various passive optical network (PON) flavors. The panelists on today's Webinar conceded that there's room for all and deployment scenarios simply vary by the type of carrier. "We're not going to rewire the country overnight," says Jay Fausch, senior director of strategic marketing for Alcatel SA (NYSE: ALA; Paris: CGEP:PA).
Despite the high-profile Joint Procurement Consortium request for proposal from Verizon Communications Inc. (NYSE: VZ), BellSouth Corp. (NYSE: BLS), and SBC Communications Inc. (NYSE: SBC) for fiber access gear, each RBOC has a completely different approach to fiber access -- and only Verizon has made noteworthy progress (see SBC RFP Refreshes Remotes and Verizon's FTTP Texas Feeler).
Table 1: Incumbents and FTTP
|BellSouth Corp. (NYSE: BLS)||Part of US RBOC Joint Procurement Consortium for FTTP gear. Focused today on FTTCurb. Vendor Selection in 2H 2004.|
|SBC Communications Inc. (NYSE: SBC)||Announced FTTNode architecture at Supercomm �04, and plans for $6 billion in capex on fiber and DSL-based access. Will aggressively enter IP TV business.|
|Verizon Communications Inc. (NYSE: VZ)||Leader among RBOCs in FTTP enthusiasm. Already rolling out FTTP today, targeting 100 central offices for 2004, passing 1 million homes. 5, 15 and 30 Mbit/s data, plus voice and analog video overlay.|
|BT Group plc (NYSE: BTY; London: BTA)||21st Century Network. FTTP part of overall network transformation strategy. Trialing gear in 2004.|
|Telstra Corp.||FTTP pilot underway for full triple play|
|Source: Heavy Reading|
What matters in all fiber-based deployments is that the vendor provides a unified management system and a way to control and provision services across whatever deployment scenario a carrier requires, says Barry Kanter, VP of marketing for World Wide Packets Inc.
— Phil Harvey, News Editor, Light Reading
The Webinar, "Fiber to the Premises: Closing the Capacity Loop," will soon be available for viewing here.
For more on the FTTP market, check out:
- The Light Reading Insider report:
— FTTP Reality Check
For further education, visit the archives of related Light Reading Webinars: