Fighting FiOS With Fiber
Heavy Lifting Analyst Notes Alan Breznick, Cable/Video Practice Leader, Light Reading 5/14/2008
In a Light Reading Webinar that I moderated on the cable industry's fiber activity late last month (FiOS Fighters: Cable MSOs & FTTP), two leading fiber equipment vendors ticked off as many as ten major North American MSOs that have started exploring, testing, or even deploying various fiber plant extensions in their markets. The list includes such industry giants as Time Warner Cable Inc. (NYSE: TWC) and Rogers Communications Inc. (NYSE: RG; Toronto: RCI), as well as such still-sizable MSOs as Suddenlink Communications , CableOne , and Canada's Vidéotron Telecom Ltd.
Executives from Aurora Networks Inc. and CommScope Inc. noted that cable providers are trying out two basic ways to make more use of bandwidth-rich fiber. In the "fiber deep" approach, MSOs are extending fiber lines further in the network, leaving coax just for the last-mile connection to the home or office. In the second approach, they're tinkering with building full fiber-to-the-premises (FTTP) branches from their main hybrid-fiber/coax (HFC) trunks, usually for new housing developments.
Both approaches make sense strategically and, increasingly, financially. Fiber-deep installations allow cable providers to boost bandwidth to each subscriber, get rid of bottlenecks at the node, and increase network availability to the levels of the big phone companies. A fiber-deep architecture also reduces the need for network amplifiers and power supplies, slashing operational costs in half.
FTTP extensions don't produce quite the same savings yet, which is why they're mostly being used for new builds so far. But early field research indicates that one such cable FTTP platform, known as BrightPath, is actually proving to be cheaper than HFC builds in low-density areas and only 20 percent more expensive in high-density settings. That's because FTTP extensions like fiber deep drastically reduce the need for amplifiers and other plant-powered gear, without disrupting operations or requiring a total network overhaul.
All this fiber activity doesn't mean that cable operators are going to junk their tried-and-true HFC architecture overnight. Indeed, HFC technology, which has served the cable industry quite well, will still be with us for a long time to come. MSO executives are not about to scare shareholders and Wall Street or drive off customers by embarking on a major fiber-network construction project, à la Verizon and AT&T Inc. (NYSE: T).
But this does suggest that FTTP is no longer a four-letter word (or at least, acronym) for the cable industry. Although they still may not talk much about it publicly, cable providers will steadily increase the proportion of fiber in their HFC networks over the next few years, leaving coax for just the last link to the home or office, as well as the inside wiring.
And don't be surprised if some U.S. or Canadian MSO somewhere soon quietly turns exclusively to fiber whenever it needs to lay new plant or replace an aging coax line. While they may continue to swear by HFC technology, cable operators increasingly realize that fiber is not just the future, it's their future too.
— Alan Breznick, Senior Analyst, Heavy Reading