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FTTP Gets Plenty of Airtime

Light Reading
OFC/NFOEC News Analysis
Light Reading
3/8/2005

ANAHEIM, Calif. – OFC/NFOEC 2005 – Yes, FTTP is still a hot topic. And, as somebody pointed out at the bar here at the Anaheim Marriott, that may be because it's one of the few bright spots for optical technologists.

In a subdued atmosphere at the OFC Executive Forum on Monday, service providers and investors tried to put the best face on the optical industry, painting a bright outlook for fiber to the premises (see PON Is King at OFC and Inside SBC's IPTV Factory).

"The good news is, Verizon and SBC are talking about large capital deployments for eight to 10 years," said John Kunschner, a vice president with Broadview International. "And on the regulatory front, the FCC is starting to remove disincentives to investment."

Meanwhile, execs from RBOC behemoths Verizon Communications Inc. (NYSE: VZ) and SBC Communications Inc. (NYSE: SBC) laid out their plans for getting customer access to their next-generation fiber networks -- but their words were cautious.

Brian Whitton, Verizon's executive director of access technologies, said the company's FTTP initiative is preceding apace and will enable advanced voice, data, and video services to all its customers. But he also said that much of the expansion is predicated on end-user demand.

"We plan to pass each and every home in our network with fiber so that when customer demand increases we won't have to build feeder lines [to that neighborhood]," he said. "But, we won't deploy the ONT [optical networking terminal] to the home until the customer requests service."

With fiber connectivity, Whitton says Verizon will begin offering new products to its customers like IP-based voice services with battery backup, basic and advanced data services, video (including premium, pay-per-view, video on demand, HDTV, and PVR), and eventually cellular bundling, making the company a one-stop shop for communication and entertainment needs.

According to Whitton, the ONT will play a big part in helping slash costs of deployment. Compared to a standard "dumb" copper connection to a house, the ONT is "an intelligent piece of equipment that can be used to find out how the equipment in the home is used," he says. It can help reduce operating costs by enabling remote management and provisioning of services.

Eugene Edmon, executive director of broadband access at SBC Laboratories says that SBC's multi-strategy fiber plan based on a combination of FTTN (fiber to the node) and FTTP, would allow for quicker deployment to customers in the short term. He noted that while SBC's FTTP strategy is being implemented at greenfield sites, an FTTN strategy makes more sense for upgrading existing customers to fiber-speed access and advanced services (see SBC Sheds Light on 'Lightspeed').

The overall goal -- like Verizon's and other service providers moving to fiber -- is to lower operating costs while offering new services. Project Lightspeed will place DSL electronics within 3,000 to 5,000 feet of most customers. Edmon estimates the company will spend $4 billion to $6 billion upgrading its networks and will have service to 18 million customers within three years.

Both speakers stressed that the long-term goal of these initiatives was to hasten the move to IP-based services with more integration and lower operating costs. "We're moving out of the ATM world with Lightspeed," Edmon says.

"This is not a modest, incremental change to the network," Whitton says of Verizon's plan. "It represents a network transformation."

But some observers say in order for FTTP and triple play to boom, it will take more than investment and optical technology -- namely, it needs to be marketed aggressively.

"It's marketing 101," says Michael Lebby, director of technology at Bookham Inc. (Nasdaq: BKHM; London: BHM). "There are two catalysts. One is education, educating the public about where they are going. The other is to try to enlist the government to help."

In sum, the big moves by Verizon and SBC, as well as projects by other large carriers such as BT Group plc's (NYSE: BT; London: BTA) 21st Century Network, are providing the optical industry's brightest glimmer of hope (see New Networks Beckon Vying Vendors).

— Chris Somerville, Senior Editor, Next-Generation Services, and R. Scott Raynovich, US Editor, Light Reading

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Keebler
Keebler
12/5/2012 | 3:24:03 AM
re: FTTP Gets Plenty of Airtime
What about the keynote address on lobbying the government for broadband in the US? Or the panel of startup FTTP providers who all stated that they are making money in FTTP without selling the RBOCs (and are looking forward to IPOs)? Or the fabulous debate on passive vs. active architectures?

True, the RBOC presentations were interesting, but only in that they repeated and somewhat expanded on what has already been publicly stated. Some of those other talks surely deserved mention and - perhaps - analysis.

I, for one, found the lobbying talk a bit depressing. Not in the numbers showing how the US is lagging. That's not new information. Instead, I was depressed that lobbying efforts are focusing on pie-in-the-sky strategies in a world where SBC is claiming that VDSL at 30Mbps is plenty for the foreseeable future and Verizon is offering 5Mbps over a FTTH architecture. There's a disconnect, and I'm concerned that this disconnect will only further confuse the matter and delay progress.

Details: http://www.wilkinsons.com/Bana...
rjmcmahon
rjmcmahon
12/5/2012 | 3:24:02 AM
re: FTTP Gets Plenty of Airtime
The point is that there are lobbyists in Washington representing our industry who believe that everyone in the US is clamboring for 10Gbps broadband. At the same time, Verizon and SBC are stating that their business model works at 5Mbps. If you are a non-technical congressman, who are you going to believe and where are you going to put your efforts?

The recent testimony in front of the US Congress Energy and Commerce Committee chaired by Rep. Barton suggests that congress is primarily listening to SBC and VZ. There were no indications suggesting industry lobbyists promoting 10Gbs were having any effect at all.

The pragamatist-broadband-idealists, who testified when the committee had pretty much disbanded, seemed to be focussing on wireless solutions. This included spectrum reform which would free up the analog broadcast frequencies. I have a hard time believing this will drive our industry or that the media companies will ever cede control over that spectrum.

Enough confusion and nothing at all gets accomplished.

The US Congress gets all kinds of feedback. Confusion is part of their job. Unfortunately, at the end of the day, the feds tend to pass legislation which serves those already in power strengthening the status quo. 10Gbs and even 1Gbs technology is disruptive to the status quo.

So unless one has some real power on their side, which our industry doesn't seem to have, it may be better to focus lobbying efforts on municipal governments. At the federal level the thing to request is policies which enables and protects municipalization as a form of competition to the SBCs and VZs, taking the position that that this could stimulate investment into access infrastructure. Another thing to request is support for rural fiber projects.
minnecool
minnecool
12/5/2012 | 3:24:02 AM
re: FTTP Gets Plenty of Airtime
The lobbyist's you refer to are 1) Trade associations that need to justify their existence 2) Cynical RBOC's using the so-called broadband deficit as a means to kill Telcom 96' once and for all 3) Sorry ass equipment manufacturers with their hands out to somehow save themselves from Asian competition.
I get the point very well. The answer will not be in Washington, it will be in the trenches.
minnecool
minnecool
12/5/2012 | 3:24:02 AM
re: FTTP Gets Plenty of Airtime
There is no disconnect. The RBOC's FTTx efforts are based, solely, on ECON 101: Make money now. This is a buyers market and the RBOC's are taking control of procurement decisions. BellSouth, SBC, and Verizon lose nothing by installing electronics that support what the customer is willing to pay for now. If new app's appear out of the clear-blue sky they will change the electronics and give everyone 100Mb.
Bottom line: They are all from Missouri - show me. They will no longer buy the blue-sky crap (build and they will come). Get over it and deal with it.
The only defense for the optical industry is to shrink through either/or a Darwinian or consolidation process. Pick your poison.
Keebler
Keebler
12/5/2012 | 3:24:02 AM
re: FTTP Gets Plenty of Airtime
Thank you. My point exactly (or pretty close).

Our industry lobbyists should be focusing on achievable goals. Statements about 10Gbps to every home are so far out in left field as to be ignorable. Focus on municipal broadband. Tie achievable broadband goals to education and development. Those are groups with much more power in DC and much larger and more easily defineable constituencies.

The lobbyist who spoke at the Forum just didn't get that. Snide comments about retirement communities are not going to get the job done.
Keebler
Keebler
12/5/2012 | 3:24:02 AM
re: FTTP Gets Plenty of Airtime
You miss my point. The point isn't that there's a disconnect in what we're providing in the US vs. what's provided worldwide, although that might be arguable.

The point is that there are lobbyists in Washington representing our industry who believe that everyone in the US is clamboring for 10Gbps broadband. At the same time, Verizon and SBC are stating that their business model works at 5Mbps. If you are a non-technical congressman, who are you going to believe and where are you going to put your efforts? Enough confusion and nothing at all gets accomplished.
Road Trip
Road Trip
12/5/2012 | 3:24:01 AM
re: FTTP Gets Plenty of Airtime
The lobbyist's you refer to are 1) Trade associations that need to justify their existence 2) Cynical RBOC's using the so-called broadband deficit as a means to kill Telcom 96' once and for all 3) Sorry ass equipment manufacturers with their hands out to somehow save themselves from Asian competition.
I get the point very well. The answer will not be in Washington, it will be in the trenches.
------
You forgot 4.) the something-for-nothing CLECs and resellers being chauffeured around the Hill in AT&T limos.

The trenches it is.
rjmcmahon
rjmcmahon
12/5/2012 | 3:24:01 AM
re: FTTP Gets Plenty of Airtime
Our industry lobbyists should be focusing on achievable goals.

That's good advice for everybody. The challenge becomes determining what is achievable, particularly when complex organizations are involved, and in not selling ourselves short.

If anybody tells you it's impossible to get fiber installed in their municipality, ask them to start counting the poles. Who put up those poles and built our electrical distribution systems? How did previous generations get that job done for us? Municipal fiber is an achievable goal as proved by their example.
DZED
DZED
12/5/2012 | 3:23:53 AM
re: FTTP Gets Plenty of Airtime
Guys:
The goverments must pay for unnecessary infrastructure and jobs:
Isn't that communism? The US really is going down hill.

10Gbps Broadband:
How many of you need a DVD movie per second?

Marketing 101:
Maybe 'Supply and Demand' 101 comes first?
rjmcmahon
rjmcmahon
12/5/2012 | 3:23:52 AM
re: FTTP Gets Plenty of Airtime
The goverments must pay for unnecessary infrastructure and jobs: Isn't that communism? The US really is going down hill.

What infrastructure do you deem as unnecessary? Also, ask yourself why our brethren and former British colonies are just now getting around to building modern roads. Imagine if previous US generations, alive during the early days of the internal combustion, treated roads as "unnecessary infrastructure." Where would we be today? So let's be careful about what is deemed as unnecessary.
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