May, 2003 Issue

THE VIODI VIEW

by Ken Pyle

In this Issue: FTTH, Cross-Ownership, Mouse Ears or Rabbit Ears and More...
 

Fiber to the Home - Finally

The year was 1994 and I boldly made the prediction at the National Fiber Optics Engineering Conference that, “initial commercial realization of an HFC [Hybrid Fiber Coax] FTTH [Fiber to the Home] implementation is most likely to occur sometime between 2007 and 2018.” Well, I was wrong, unless I redefine what is, is. Regardless, it looks like the year 2007 came a little early, based on what I saw at NTCA’s conference, Fiber: Opticmize Your Network.

The numbers of communities and subscribers that are connected via FTTH, admittedly, is still very small. Bob Whitman of Corning suggested that there are over 70 communities that have deployed FTTH and more than double that are under construction. NTCA’s conference brought together the perfect mix of service providers, engineering firms and suppliers to discuss the challenges and opportunities associated with the existing and impending FTTH deployments, particularly in the context of independent telcos.

As with many other telecommunications’ technologies, some of the first deployments are by independent telcos and are occurring in rural markets. And the approaches to implementing FTTH are as varied as the independent telcos are numerous. Suppliers of hardware, including Alloptic, Optical Solutions, Wave7Optics and World Wide Packets gave their arguments for their various flavors of FTTH.

One thing that is clear from their presentations, as well as the presentations given by the Engineering Consulting firms of Martin Group and Vantage Point Solutions, is that FTTH can be economically viable. It still is at least 15 to 20% above a traditional copper/DSL build, but the increased capability it provides can be worth the premium. It was stated several times a triple play of voice, data and video is required to justify the investment in FTTH.

It was also pointed out that now is a good time to deploy fiber deep in the network, as both the cost of the fiber and the cost of construction has significantly dropped with the slowdown in telecom. In fact, Dustin Maier of the Martin Group said he has seen the cost of construction drop from $12 to $15k per mile to as low as $6.5k per mile.

And the independent telcos that presented at this conference confirmed their success by describing their FTTH deployments. These telcos are using FTTH both within their existing exchange areas, as well for overbuild situations. Many of the greenfield deployments are in new developments. Several speakers explained the importance of working with builders to ensure the success of FTTH in new developments.

Kevin McGuire of Hancock Telecom, an Indiana independent telco, stated that Hancock has made, “a commitment to deploy FTTH to any new subdivision in their service territory.” McGuire said Hancock has gone as far as supplying CAT-5 wiring in exchange for pre-wiring new houses to their specifications.

NextTech, a subsidiary of Rural Telephone in Kansas, has overbuilt several communities in outside their existing exchanges. Jeff Wick, Chief Operating Officer of NextTech projected that they would need 70% penetration to make FTTH viable for one of their overbuild communities. In fact, they achieved 97% penetration. Their recipe for success includes:

1) Hiring a local office with local people
2) Lots of groundwork with the community – pre-signup in the new community
3) Customers want one bill from one provider

Another interesting tidbit from the conference is that all of the service providers represented at this conference use local battery back-up power supplies from APC. APC has a battery replacement program to ensure that batteries are kept fresh. Huxley Communications uses the need to replace batteries as a marketing tool, by sending their staff out to talk to the customers.

Bob Whitman of Corning, a self-described FTTH evangelist, discussed the trend of municipalities implementing FTTH. He stressed that they are generally providing these networks out of frustration with the local service providers. In many instances, these municipal entities will work with neighboring independent telcos, such that the independent telco will provide the service and effectively lease bandwidth from the municipal utility.

NTCA’s Fiber: Opticmize Your Network conference was more than just about FTTH, as speakers from Glow Networks, Confluence Research Group, Turin Networks and Cisco Systems discussed SONET, Ethernet, CWDM and DWDM technologies as they relate to inter-office transmission. Along those lines, several regional networks created from independent telcos were represented at the conference. Max Huffman, of the Missouri Network Alliance, described the formation of a newly formed entity, Indatel, which brings together the state networks into a national alliance of networks.

I asked the FTTH Solutions’ panelists, consisting of representatives from World Wide Packets, Alloptic and Optical Solutions, of their plans for adding the capability to deploy copper from their platforms. Both World Wide Packets and Alloptic said they have no plans to add this capability. Frank Delle Donne from Optical Solutions said to look for a press release in the near future that discusses their plan is to work with an established VDSL provider (my prediction is it is Next Level/Motorola), whereby the Optical Solutions equipment will integrate with that provider’s copper Digital Loop Carrier solution.

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