7:30 AM -- In September, I'd talked to Jessie Mason, general manager of Greenlight Communications, which was considering WDM-PON for a greenfield fiber network passing about 7,000 homes.

But WDM-PON lost out. I got the update from Mason at TelcoTV earlier this month.

"It was very close until I started looking hard at the pricing," which was indeed high, especially considering that WDM-PON has gotten relatively few real-world deployments, he said. "It may have worked perfect. But it just hasn't been tested, so we backed off a little."

Greenlight is building a municipal broadband network for Dunnellon, Fla., a city within shouting distance of Orlando, Gainesville, and Tampa. In our video interview, he explained some of the basics of the project, which will offer minimum speeds of 10 Mbit/s downstream.

{videoembed|200458} What I first liked about Greenlight was the WDM-PON possibility. It was a greenfield project that needed a point-to-point technology, so, what the heck. But even in September, when I met Mason at the WDM-PON Forum, it was clear that the cost would be a big question. (See Verizon: WDM-PON Still Sounds Expensive.)

Even without WDM-PON, it's an interesting project, in part because we get to watch it unfold before services start up. AT&T Inc. (NYSE: T) and Comcast Corp. (Nasdaq: CMCSA, CMCSK) compete in Dunnellon but don't offer advanced services there (no U-verse, for instance). Among the customers that would be interested: The city itself, which is taking advantage of hosted services for things like its financial software. Mason tells me there did come a day when both AT&T and Comcast connectivity went down -- and that helped make a city-owned fiber network look awfully attractive.

In lieu of WDM-PON, Greenlight is going with GPON and active Ethernet using Zhone Technologies Inc. (Nasdaq: ZHNE) equipment, which beat out Motorola Inc. (NYSE: MOT). Video services will come from Avail-TVN transport and a Motorola-hosted version of Microsoft Corp. (Nasdaq: MSFT) Mediaroom. (See Motorola Plays Host to Microsoft IPTV.)

Services are set to launch in March, and Mason says he's already got a waiting list of more than 1,000.

— Craig Matsumoto, West Coast Editor, Light Reading