SBC investing $6 billion in fiber

On the heels of a favorable regulatory ruling, SBC is building out a fiber network to bring higher-speed services and new applications to businesses and consumers.

The RBOC is investing $6 billion over the next three years for a so-called Fiber-to-the-Neighborhood (FTTN) deployment, SBC Chairman Ed Whitacre said during his keynote address last week at the Supercomm 2004 conference in Chicago.

The buildout follows the DC District Court of Appeals decision to dismantle the FCC’s Unbundled Network Elements-Platform (UNE-P) policy on wholesaling RBOC facilities to competitive local exchange carriers. RBOCs have maintained for years that UNE-P’s government-mandated rates lost them money and discouraged investment.

UNE-P was extracted for the Telecom Act of 1996 earlier this month.

The FTTN deployment is also based on SBC’s assumption that new FCC wholesaling regulations being developed will be more market-friendly.

“The stage could be set for a regulatory environment that encourages rapid deployment of next generation networks,” Whitacre said in his address.

“Everybody recognized the rules have held back what we need to do,” he said. “Everybody’s ready to try something different.”

FTTN will provide 15M to 20M bit/sec of bandwidth for switched video, and higher-speed DSL and VoIP services to homes and businesses, Whitacre said. SBC is working with Microsoft to provision IP TV to home on the network, he said.

FTTN is mostly in trials this year but next year 20 million to 25 million of the access lines in SBC’s 13-state territory could be connected to the network, Whitacre said.

SBC will continue to invest in Fiber-to-the-Premises (FTTP) buildouts for new homes and other greenfield deployments, he said. But FTTN is a less expensive and disruptive way to get fiber close to homes and businesses because it does not require as much trenching to lay new cable, Whitacre said.