FTTP Gets Plenty of Airtime
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