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Managing Editor

Laying it out

Jan 09, 20044 mins

RBOCs plan to turn up FTTP this year

RBOCs say they will begin deploying fiber-to-the-premises technology this year, a rather speedy time frame considering that the proposal for FTTP equipment was issued only a little more than six months ago.

RBOCs say they will begin deploying fiber-to-the-premises technology this year, a rather speedy time frame considering that the proposal for FTTP equipment was issued only a little more than six months ago.

Of the three RBOCs that jointly issued the proposal, Verizon is the most bullish and aggressive on FTTP. Verizon has already named its equipment suppliers – Advanced Fibre Communications is the chief vendor – and disclosed plans to pass 1 million homes in 2004, perhaps doubling that coverage in 2005.

SBC has also named its supplier – Alcatel – but remains the most conservative on its FTTP implementation.

“Right now, it’s not on our front burner,” SBC CFO Randall Stephenson said at a recent investment conference. “There’s no sense of urgency to take FTTP for a compelling product offering.”

BellSouth is the third RBOC proposing FTTP.

RBOCs hope the investment they make in running fiber to homes and businesses will generate more revenue for them by way of enticing new services and higher-speed transport for their customers. They also hope it will stem the loss of customers and access line revenue to alternative service providers such as cable companies.

But FTTP is rife with deployment challenges. The main one is in the fiber run and how much that fiber run will cost.

RBOCs have a choice of overbuilding their existing copper cabling plant with fiber, or limiting fiber runs to new homes and business structures. RBOCs also have to consider how to run the fiber – aerially or underground – and how much those rights-of-way will cost.

Generally, it costs more to trench fiber underground than it does to string it along the wires that run from telephone pole to telephone pole. It also costs more to overbuild an existing copper infrastructure vs. running fiber where there are no existing facilities, such as new homes or buildings.

To date, only Verizon has said it will undertake an overbuild project, while BellSouth and SBC are for the most part holding back.

Current estimates list buildout costs at $600 to $1,000 per home. The cost of the build undoubtedly will be factored into the cost of service to the subscriber.

And if subscribers aren’t willing to pay the asking price for the service, the hole dug for the fiber quickly becomes a money pit. This is not lost on SBC, which is why the RBOC is most cautious on FTTP.

That’s why SBC will limit its initial FTTP buildouts to greenfield builds and new and existing multi-dwelling units (MDU) that do not require trenching, Stephenson says. As a result, the FTTP opportunity will be targeted instead of broad-based, he says.

According to Wachovia Capital Markets, SBC will commence FTTP trials in the first half of next year with some limited greenfield or MDU deployments in the second half of the year. SBC projects 250,000 to 350,000 new greenfield lines will be added each year after that, according to Wachovia.

BellSouth says it will have approximately 1 million households on fiber by year-end. Approximately 800,000 are greenfield builds, and the remainder are overbuilds, says Peter Hill, BellSouth vice president of technology planning and deployment.

Looking ahead, BellSouth will turn up its “first office application” of FTTP in the second half of next year, Hill says. But the RBOC foresees no significant increase in fiber investment next year, CFO Ronald Dykes told analysts last month.

The RBOCs say the FCC’s recent Triennial Review of policies regarding competitor access to RBOC facilities still needs clarification before the Bells continue to invest in and build out new broadband infrastructure such as FTTP.

According to the RBOCs, the Triennial Review largely kept current unbundling wholesale regulations in place for existing copper facilities – regulations the Bells say cost them money and discourage investment – but requirements for new builds, such as FTTP, are still unclear.

Managing Editor

Jim Duffy has been covering technology for over 28 years, 23 at Network World. He covers enterprise networking infrastructure, including routers and switches. He also writes The Cisco Connection blog and can be reached on Twitter @Jim_Duffy and at

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