The Clock Ticks for Gfast in Europe

A regulatory obsession with fiber bodes ill for the makers of Gfast equipment in Europe.

Iain Morris, International Editor

September 20, 2017

9 Min Read
The Clock Ticks for Gfast in Europe

Any technology that promises to boost broadband speeds over copper lines should find itself in comfortable surroundings in Europe, where copper is still used to connect millions of homes to the Internet.

Yet Gfast, one of several copper-fortifying technologies that have caught the attention of European telcos, has not been universally welcomed in the European market. Regulatory distaste for it is such that Sckipio, one of the world's biggest manufacturers of Gfast chips, now admits to being "worried."

The Israeli vendor this week unveiled some long-awaited Gfast improvements that could provide the spur the technology needs. Yet these are unlikely to see commercial rollout for at least another year, Sckipio Technologies admits. In the meantime, there is a danger that developments overtake Gfast in some important markets. (See Sckipio Unveils Speedy Next-Gen Gfast Chipset.)

The Gfast pushback stems largely from European authorities and their current preference for networks that have an all-fiber flavor.

This was spelled out very starkly in October 2016 during an event hosted by broadband vendor Adtran Inc. (Nasdaq: ADTN), one of Sckipio's key partners. In a presentation at that event, Tony Shortall, a director for consulting group Telage, said the European Commission's latest regulatory framework was driving service providers toward a much narrower selection of high-speed technologies based heavily on fiber. (See EC Rules to Narrow Tech Options for Telcos and Could Use a Boost.)

Gfast from the distribution point would probably make the grade, said Shortall. But over much longer distances, it would be unlikely to measure up from a regulatory perspective.

Nor was Shortall the only one then highlighting Gfast's dilemma. "From a capacity point of view, cabinet-launched Gfast would probably fall short of requirements for the majority of the serving area," said Ronan Kelly, Adtran's chief technology officer.

A pick-me-up for copper
Gfast essentially works by extending the frequency range over which a broadband signal travels on a copper loop. The original idea was that an operator would, indeed, take fiber up to a distribution point near the customer's premises and then use Gfast to perk up the signal over the last few meters. It would be like an energy supplement for a long-distance runner on the home stretch. (See The Dawn of Gigabit Copper?)

But clever researchers at Sckipio and other Gfast vendors have continued to make improvements. So compelling have these been that in early 2015 the UK's BT, one of Europe's biggest fixed-line operators, began eyeing the "cabinet-launched Gfast" about which Adtran's Kelly has more recently expressed reservations.

The rollout of Gigabit broadband access networks is spreading. Find out what's happening where in our dedicated Gigabit Cities content channel here on Light Reading.

In this scenario, the fiber network would extend only as far as the local street cabinet. Gfast would then carry the signal over a copper loop that could be as much as 300 meters from the customer premises. It would make Gfast more of a performance-enhancing substance than an energy supplement.

The worry is that Gfast will still lose some of its potency over these longer distances due to signal attenuation, falling short of regulatory speed targets.

Even so, having already pumped funds into a fiber-to-the-cabinet deployment, BT Group plc (NYSE: BT; London: BTA) has subsequently put a cabinet-based rollout of Gfast at the very heart of its broadband plans. Using the technology, it reckons it will be able to provide connection speeds of about 330 Mbit/s to around 10 million UK premises by the end of 2020. (See Long-Range, High-Speed Gfast Is Coming – BT.)

Since then, however, it has not exactly been full speed ahead for Gfast in the UK. BT is still very much at the trial stage, having announced additional locations for pilot schemes in its last Gfast update in August. It aims to cover about 1 million premises with the technology by the end of 2017 -- nearly three years after first announcing its plans for Gfast trials. To hit its end-2020 target will mean covering 3 million homes in each of the next three years. (See Eurobites: BT Broadens Gfast Rollout.)

Next page: Speed injection

Speed injection
The big problem for BT is that, despite all the recent Gfast innovation, the current commercial versions of the technology do not suit its overarching plans.

Until now, BT has had to rely on products based on Amendment 1 and Amendment 2 of the Gfast standard, or what Sckipio calls "first generation" Gfast. Broadly speaking, these work across a frequency range of 106MHz and with distribution point units (DPUs) that feature a limited number of ports. "At the moment, we are stuck with 16-port vectoring," said Eric Joyce, a systems engineer with Adtran, at the company's October 2016 event. "We want to be going into 48- and 96-port vectoring solutions for cabinet deployments."

The much newer Amendment 3 technology could give BT exactly what it needs. Besides doubling the frequency range to 212MHz, it promises to bolster vectoring, which cuts out crosstalk interference, and support the introduction of DPUs with many more ports.

Step up Sckipio. Claiming a few technology "firsts," the Israeli company this week revealed its inaugural Amendment 3 chip as well as a 96-port Gfast DPU. And while Sckipio will not comment on BT's specific plans, the message is that Amendment 3 technology addresses needs that operators could not previously meet.

"You cannot deploy current systems in large bundles without losing the ability to serve all the customers in the large bundle," says Michael Weissman, Sckipio's vice president of marketing. "If you have a 16- or 48-port box and a 96-port need, you don’t fill that slot. You wait."

Unfortunately, BT may have to wait for longer than it would like. While Sckipio's 96-port DPU is due to start shipping in the fourth quarter of 2017, Weissman does not expect to see products in commercial networks until this time next year, at the earliest.

"Generation 2 [Amendment 3] is at least a year away. It is not certified or interoperable and there is a lot that has to be done to make products ready," he says. "For sure there are global markets that require the speed of 212MHz and for sure those customers are waiting."

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The risk now is that mounting regulatory and competitive pressure drives incumbents like BT toward fiber before Gfast plans have come to fruition.

If that sounds far-fetched, consider this: In July, BT began talks with UK regulatory authority Ofcom, government authorities and other companies about a fiber-to-the-premises (FTTP) deployment that would cover 10 million homes and businesses -- the same number of premises it is targeting with Gfast -- by the later date of 2025. Even more recently, BT was rumored to be in talks with UK mobile operator Vodafone about co-funding an FTTP rollout. (See Europe's Backhaul Black Hole Looms Above 5G and Eurobites: Vodafone, BT Eye Joint Fiber Rollout – Report.)

While nothing is set in stone, this would clearly represent a far more ambitious FTTP scheme than BT's current one, under which it plans to cover 2 million premises by the end of 2020. And it would naturally have implications for Gfast -- especially if that project encounters delays. (See BT to Cover 2M Homes With FTTP in $8.7B Plan.)

Have BT and Ofcom been cowed by the European Commission? With the UK set to leave the European Union in the next 18 months, that will seem improbable. Yet BT has clearly been under some regulatory pressure to invest in higher-speed networks. Its current investment promises are partly aimed at warding off punitive measures, such as the forced divestment of its Openreach infrastructure business. (See Only BT's Dismemberment Will Sate Rivals.)

Next page: Fiber enthusiasm

Fiber enthusiasm
Elsewhere in Europe, regulators' fiber enthusiasm has also rubbed off on telcos. France, Portugal and Spain each host multiple operators investing in FTTP. Even Germany's Deutsche Telekom AG (NYSE: DT), chiefly focused on another copper-boosting broadband technology called vectoring, says it will start to increase spending on FTTP in 2019. It recently launched a gigabit-speed service that is available to about 700,000 existing FTTP subscribers. (See DT to Ramp Up FTTH Capex Starting in 2019.)

Nevertheless, while this fiber momentum might curtail some Gfast opportunities, it could open up others. Deutsche Telekom, for example, has talked about using Gfast in the basements of fiber-connected buildings. According to Telage and Adtran, European regulators should be satisfied with this use of Gfast. Yet Weissman is evidently concerned their aversion to the technology is now ingrained.

"I'm worried about regulatory blockage of superior price performance," says Weissman. "I'm worried that regulators are technologically bigoted and have a prescription for fiber devoid of economic and time-to-market realities."

As far as Sckipio is concerned, while Gfast will never match an all-fiber network on pure speed, it is likely to deliver more bandwidth than most consumers will need, under the right conditions. (Weissman likes to joke that the only service currently requiring gigabit-speed connectivity is a speed test.)

Naturally, Gfast should also be much cheaper to deploy. While independent estimates are hard to find, Sckipio reckons connecting a fiber network to a home it passes might cost as much as $600. Hooking that same property up to Gfast would probably cost as little as $80, claims Weissman.

Sckipio's hope is that fiber setbacks elsewhere might persuade European authorities to think again. Google Fiber Inc. and Australia's NBN Co Ltd. are two high-profile examples of fiber projects that overreached, says Weissman. Yet European authorities appear to have taken little heed.

"They seem unwilling to give those cautionary tales much credence and part of it is fear they will be left behind," says Weissman. "I understand that their job is to make sure citizens are cared for, but this technology will help them achieve their goals much faster and more cheaply than with a pure fiber play."

Sadly, unless there is a regulatory change of heart, the addressable market in Europe may start to look far less appetizing than it once did.

— Iain Morris, News Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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