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Gigabites: 'No Boundary' on Verizon Fiber Expansion

Mari Silbey
7/29/2016

Welcome to the last Gigabites in July. In this edition, Verizon hypes its wireline ambitions again, Cruzio Internet moves forward with gigabit plans in Santa Cruz, EPB plans for a leadership change and more.

  • After years of stating that its Fios deployment days are done, Verizon Communications Inc. (NYSE: VZ) CEO Lowell McAdam told investors this week that the telco may yet expand its fiber-to-the-home footprint to new cities. The news has a number of caveats and contextual issues to consider, however. First, Verizon just got rid of its Internet service business in California, Florida and Texas, so any newfound wireline commitment would stand in contrast to the company's strategic shedding of undesirable fixed-line markets.

    Second, Verizon's interest in deploying new wireline networks comes less from wanting to offer additional FTTH residential services, and more from the telco's ambitions in 5G and the Internet of Things. During his company's earnings report, McAdam highlighted Verizon's surprise decision in April to bring Fios to Boston, noting that "the farther we push out fiber into the network, the more small cell technology works for us." In the Fios agreement with Boston, Verizon is also gaining new right-of-way access for installing wireless equipment, and it will use its network to begin testing out new smart cities applications. (See Verizon Drops Wireline Clues as Strike Ends and Verizon Throws Surprise FiOS Party for Boston.)

    On the earnings call, McAdam also mentioned Verizon's recent work in San Francisco ahead of the last Super Bowl, where the telco built out further wireline infrastructure to support wireless Internet traffic.


  • For more gigabit coverage and insights, check out our dedicated gigabit/broadband content channel here on Light Reading.


  • In a show of faith that the city of Santa Cruz will make good on its plans to figure out funding for new gigabit services, Cruzio Internet has announced that it will make fiber-to-the-home broadband available to about 1,000 homes this fall. The decision comes even before the city finalizes its financing strategy, with Cruzio CTO Chris Neklason noting, "The best way to demonstrate how successful this network can be is to just start building it."

    Cruzio says it will begin construction on the network immediately, and that it aims to offer gigabit service for the comparatively low price of $50 per month. (See Gigabites: Santa Cruz Revs Up Wireless Gig.)

  • Gigabit leader EPB Fiber Optics in Chattanooga, Tenn., is in for a leadership change. CEO Harold DePriest has announced he will retire next month after two decades on the job. Current president and COO David Wade is expected to take over the CEO position.

  • And finally, in case you missed it, Verizon got the go-ahead from the Federal Communications Commission (FCC) this week to lease high-frequency spectrum assets from XO Communications Inc. , which it plans to use for future gigabit-capable 5G deployments. And Adtran Inc. (Nasdaq: ADTN) officially announced its new Mosaic software-defined broadband access platform, a version of which is being used by Verizon for upcoming NG-PON2 trials. (See Verizon Cleared for Take-Off on Fixed 5G.)

    — Mari Silbey, Senior Editor, Cable/Video, Light Reading

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    kq4ym
    kq4ym
    8/12/2016 | 11:12:17 AM
    Re: To recap...
    It seems to me the Santa Cruz project to get 1000 homes on gigabit is a bit weird if they're depending on the philosphy that ""The best way to demonstrate how successful this network can be is to just start building it."
    thebulk
    thebulk
    8/2/2016 | 1:03:52 PM
    Re: To recap...
    @mendyk, LoL thats a great comparison. 
    mendyk
    mendyk
    8/1/2016 | 2:01:15 PM
    Re: To recap...
    Agree -- which is why the Verizon strategy feels a lot less than fully formed.
    brooks7
    brooks7
    8/1/2016 | 12:55:55 PM
    Re: To recap...
    Maybe...I think this whole notion ends up being a problem for out of area connectivity and will slow deployment once they get going.  Take an area like say Chicago and all of its suburbs.  That is an AT&T area.  How many micro-cells are they going to place?  Where are they going to place them (lightpoles?).  How are they going to get big connectivity out to those microcells (otherwise what is the point of having a 3 Mb/s backhaul for a 5G microcell).  

    The number of placements, power, and maintenance (god help you if you have to roll trucks in any kind of quantity) make this a really hard thing to do.  Talk to the ex-Sprint LTD guys in Vegas about heat and battery issues in small enclosures.  Its a nightmare.  

    I remember a guy I met from US West who was talking about the Next Level deployment in Phoenix.  Took 1,400 sites.  They were an incumbent and had one hell of a time coming up with 1,400 sites that can be approved for deployment.  Now imagine you are not an incumbent.  You have to get the city to grant you access to how many locations?  And who is bringing the bandwidth and how is it getting there?

    seven

     
    mendyk
    mendyk
    8/1/2016 | 11:42:25 AM
    Re: To recap...
    Won't they have to run fiber deeper into the network (beyond cell sites) to support the microcell strategy?
    brooks7
    brooks7
    8/1/2016 | 10:59:24 AM
    Re: To recap...
    They are saying that they will run fiber to cell sites.  That idea has been around forever.  The challenge is what do they do out of their wireline footprint where there is no fiber.  If they can get a city to cut them a deal, perhaps they do FiOS.  Otherwise they will find some lower cost way.

    seven

     
    mendyk
    mendyk
    8/1/2016 | 10:30:53 AM
    Re: To recap...
    My reading of Verizon's increasingly inscrutible tea leaves is that what it really wants is more of an FTTN infrastructure that will use fixed wireless for the end-user link. What makes this puzzling is why this is being presented as an expansion of FiOS -- a product that Mr. McAdam clearly has little enthusiasm for.
    brooks7
    brooks7
    8/1/2016 | 10:21:40 AM
    Re: To recap...
    The original business case around FiOS was all about wireline line loss.  You can go back in time and remember that cable was dominating Verizon in residential.  The problem with FiOS is that it has a relatively high absolute cost based primarily on the cost of construction.  That is why they addressed suburbs first (less buried infrastructure).  There was (and still is) a real problem in getting access to Apartment Buildings to deploy FiOS and they gave up on the VDSL in the basement model long ago and chose FTT Apartment as a more consistent deployment pattern.

    The challenge always is once you have crossed those boundaries where the cost of construction begins to hurt the ROI even more what do you do?  

    Google's answer has been pretty simple.  Get the cities to remove all the social obligations of building a network.  

    AT&T's answer has been to announce many things, especially where Google announces.

    Verizon's answer has been to cap its construction (which it said at the start of the project it was going to do - it was part of the original RFP).  The fact that they have a new use (5G) means there may be a bit more deployment.  Beyond that, I wouldn't hold my breath.

    I am a firm believer that the only way that we get FTTH and Gigabit networks everywhere is an old fashioned way - make it a Universal Service just like POTS.

    seven

     
    mendyk
    mendyk
    8/1/2016 | 9:02:51 AM
    Re: To recap...
    Kind of like deciding to open up a chain of restaurants that won't actually serve any food because, well, the margins in the food business are pretty bad.
    thebulk
    thebulk
    7/31/2016 | 4:58:34 AM
    Re: To recap...
    that pretty much seem to be it. push fiber deep to benneifit them but not to roll out the service to anyone. It sort of makes sense in a VZ type of way. 
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