Hype Is Back

Nothing like old times, eh? The next wave of techno-hype is here, and this time it comes with all-new, flashy four-letter acronyms. This year we’ve got FTTP and VOIP.

And yes, we're as guilty as anybody for jumping on the bandwagon. We just can't stop covering this stuff. For example, here are some news items from just the last couple of weeks:

Let the latest hype cycle play itself out – it still has some time. But let there be no doubt about it: The companies (and, more likely, the investors) in these markets will eventually figure out that they're in another cutthroat game, where it'll be tough to make a dime.

FTTP? Sure, why not. Wire me up, baby. Nothing's as smooth as glass. The only problem is that FTTP isn't really high-tech at all, because it's all about shovels, backhoes, and union labor. Nearly 50 percent of the cost of FTTP comes in the form of trenching and connection of the fiber itself, rather than all the technology gear. It's really blue-collar stuff.

In our latest Light Reading Insider, Light Reading's paid subscription research service, Senior Editor Mary Jander did some top-notch work uncovering such relevant details. In addition to the fact that half the average FTTP installation can be attributed to trenching and splicing, the current Insider, "FTTP Reality Check," also points out that the RBOC track record for quickly rolling out new technology is hopeless. Let's face it, when the Bells move on something, it's typically with the blinding speed of a pack of Florida Manatees.

A recent poll conducted by Light Reading bore out this perception (see Poll Finds RBOCs Tepid on FTTP). A plurality of respondents (38 percent) said that the chance of RBOCs deploying widespread FTTP next year is "unlikely."

VOIP is likewise promising, but it's also being hopelessly overdone – especially in the stock market, where tiny, unprofitable VOIP service providers are enjoying lavish valuations (sound familiar?). Watch out, because VOIP may best be known for its destructive effect on capital, rather than its constructive effect on services. After all, VOIP is to the telecom industry what Napster was to the music industry – it's going to be FREE!

I'd liken the VOIP market to the early days of email. It's a neat application, but one whose value is constantly dropping, as everybody expects it to be free. On the whole, no doubt, its use will explode. The folks selling next-generation VOIP gear and software may do well. But how do service providers expect to make money from it?

I think it's more likely that VOIP will succeed on the back of other software installations – be it instant messaging, or something like Skype. These communications applications will use VOIP to help generate a captive audience that can be sold something else (advertising or e-commerce, perhaps?). Call it the Yahoo approach. As a feature that's added to existing Internet communications applications, it's a must-have. As a standalone service, VOIP goes nowhere in the business plan.

[Editorial disclosure: That hasn't stopped us from hyping Skype as the new service archetype – check out Skype Me? Skype You!, Skype Spooks Operators, Skype Ain't Hype, Says Poll, and founder Niklas Zennstrom's profile in our Top Ten Movers and Shakers in Telecom feature. Yowza!] Yes, FTTP and VOIP are crucial next-generation moves for the telecom industry. Huge fast pipes are certainly good for something – getting more stuff into the hands of you and me, the users – but making money on them is going to take some savvy thinking. And plenty more time.

— R. Scott Raynovich, US Editor, Light Reading

For more on this topic, see the latest Light Reading Insider report: FTTP Reality Check. Annual single-user subscriptions to Light Reading Insider – which include access to the current report, the complete archives, and each of the monthly reports issued over the next 12 months – are available for $1,250.

Archives of Related Light Reading Webinars:

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luc.asselin 12/5/2012 | 2:45:59 AM
re: Hype Is Back Dear sir,
I'm not at all a pro of optical or copper technologies explained in the series of interventions given here but much more interested in the video showing the big arc initiated around a diconnecting switch opening operation.
Could you put me in contact with somebody able to give me some added technical information on the phenomena observed ?
Best regards

Luc Asselin
sigint 12/5/2012 | 2:45:59 AM
re: Hype Is Back big arc initiated around a diconnecting switch opening operation.
Could you put me in contact with somebody able to give me some added technical information on the phenomena observed ?
Best regards

Luc Asselin

No big deal - there's plenty of inductive elements in a high-voltage utility power-line. As the circuit opens, the Ldi/dt (L being the total inducatnace) produces the flashover. It can be sustained in some cases (depending on favorable climatic conditions) as the air ionises in the weird patterns observed in the video. Ionised air can conduct with the normal opearting voltage across the switch.

This must be a poorly designed/selected switch - in most cased there would be mechanism to squelch the arc.

You should be able to get info from companies that manufacture switchgear (eg. Asea Brown Boveri, GE)

bonnyman 12/5/2012 | 2:45:56 AM
re: Hype Is Back That's a great video sequence!

For what it's worth, when we put fiber on the power regions for last mile access, it's usually near the neutral and several feet from the conductors, which range from 7 kV to 35 kV (considered "medium voltage" in the utility world).

From the length of the insulators and the size of the arc gap, the voltages on this line were very, very high -- maybe 500 kV or 765 kV.

We do design OPGW (optical groundwire) and ADSS (all-dielectric self-supporting) fiber cable installations for very high voltages like this, but the telecom application is either internal utility telecom or long haul/metro telecom -- not last mile broadband. (ADSS gets tricky over 220 kV due to a phenomenon known as dry band arcing).

True geeks can learn a little more about fiber cable on HV lines at our web site (although I'm way overdue in updating the high voltage section):


diag_eng 12/4/2012 | 11:12:22 PM
re: Hype Is Back Dig deeper Scott and you'll find a contrast in the VOIP that Vonage supplies and VOIP that Tier 1 MSO's plan on providing.

Vonage & Skype offer secondary line/best effort service, whereas the Tier 1 MSO's will be shooting for Primary/Lifeline services, like E911 and CALEA.

Tier 2 & 3 MSOs will revenue share with players like Vonage.

Tier 1 MSOs will make money by owning the pipe, thus off-loading expensive leased lines and Class 5 switches. Ask Comcst what they're paying LNS to manage their Northeast region. You'd be amazed.
technonerd 12/4/2012 | 11:12:21 PM
re: Hype Is Back LR, the big story is the wireless NID. CellSocket is the first of a wave. Wireless NIDs are a combination of existing technologies. With a few easy tweaks and the typical scale economies, these things are going to flood the market and cause the mass cannibalization of local wireline and what's left of consumer LD by cellular.

Children, go look at the numbers. Take a look at how much revenue the ILECs get from residential LD. Now subtract three-quarters of it but keep all the network maintenance costs. Then tell us what happens to Cap-X on your nifty hobby horses like FTTP, VoIP and the rest.

This ain't rocket science. It's going to happen, and soon. Two years from now, the so-called free press will be shocked, just shocked.
lastmile 12/4/2012 | 11:12:20 PM
re: Hype Is Back It is Reality that is back. There has been growth in broadband. Some people tout wireless and some talk about VOIP and many like me talk FTTH/FTTP.
Even a two year kid will realize that all this is possible only as fiber inches slowly but closer to the user.
If someone feels that old Copper can provide enhanced broadband services without support from fiber then that is Hype. Fiber is reality.
wap545 12/4/2012 | 11:12:05 PM
re: Hype Is Back We all seem to stuck on using CAPEX to do cost comparisons of Last Mile Technologies. Need to get over this-it is obsolete.
CAPEX is only good when one compares similar distribution Infrastructures.
If you draw 3 last Mile Network diagrams from CO/Base Station to customer Premise and look at the pieces (and support required) between these end points you can see what I mean very quickly.
Take a Standard DLC deployment, (CO-DLC-NID) and compare it to a FTTH/Premise (OLT-Passive Splitter-ONT) and then show a Broadband Wireless Infrastructure (Base Station-Premise CPE).
Now take a look at what it costs to Install, Maintain and Support (the last 2 items are the key)these different networks on a Cost/Subscriber/Month over 5-7 or 10 years.
The cost/sub/mo on the Legacy DLC plant is a killer when you include all the recurring Overhead=Manpower, Power Usage and Replacement Inventory Parts, recurring Training on Voice/Data and Video parts, rolling stock to support and all ENgineering & NOC back office support over the 5-10 Years.
All this (most of it) goes away with FTTH/P and even better with Wireless.
These are the real cost we all need to be looking at. FTTH becomes really attractive very quickly when you use Cost/Sub/Mo. over 5 to 10 years.
Wireless is even better.

whyiswhy 12/4/2012 | 11:10:43 PM
re: Hype Is Back FTTH in Japan is going from "can't deliver the goods" digital-hype to "faster, better, cheaper" analog. Content security, installed base of TV's, etc. The holistic economics / politics of content delivery...not just (fiber) install costs strongly favors HFC.

China next. Then India.

bonnyman 12/4/2012 | 11:09:56 PM
re: Hype Is Back whyiswhy wrote:
"FTTH in Japan is going from "can't deliver the goods" digital-hype to "faster, better, cheaper" analog. Content security, installed base of TV's, etc. The holistic economics / politics of content delivery...not just (fiber) install costs strongly favors HFC."

In the U.S., it's now cheaper for municipal power utilities to install FTTH using ADSS cable in the power region of their poles than it is for them to build HFC systems using coax in the communications region of their poles.

That's because building a new HFC system requires replacing some poles (typically about 20% of them) with taller poles in order to meet the National Electric Safety Code's requirement for a 40" safety zone between communications cables and power conductors. Pole replacements are expensive -- typically $3k+.

In contrast, the NESC allows power utilities to install all dielectric self-supporting (ADSS) fiber cables anywhere they want in the power region. That's not practical or safe with metallic coax cable.
whyiswhy 12/4/2012 | 11:09:55 PM
re: Hype Is Back Wha?

HFC is basically PON fiber, dude, not coax. Coax is just the hook-up. Coax is already installed to over 99% of the homes in the USofA!

IOW, HFC today is all about installing fiber deeper, not greenfield, like ADSS. Waiting for greenfield fiber installs is like watching grass grow. Yea, it's green, but nobody can pay their bills with the pitiful sales it generates.

Hey, how many TV's out there have a fiber feed installed? zero. How many have an analog coax input: 100%

Its' too freakin' expensive (aka plain stupid) to deliver VOD by digital network. That's why VOD over HFC from a neighborhood server is the winner.

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