Front Page: Vendors Size Up RBOC FTTP Opportunity

The RBOCs haven’t been coy about the timing either. When asked by a newspaper reporter whether the request for proposals (RFPs) is a “wink and a nod” to the FCC, SBC Laboratories President and CEO Keith Cambron replied it was a direct message to the FCC.

The FCC’s Triennial Review of network interconnection regulations is expected to include provisions that more clearly set forth the FCC’s policy regarding new network technologies, including the extent to which unbundling and pricing regulations, such as those imposed on traditional copper technologies, will apply. General consensus is the ruling, which had not been issued as of press time, will not require the RBOCs to unbundle elements in their new fiber access networks for competitors.

If that is indeed the outcome, it would make fiber access more attractive to the Bells. Fiber access would give the RBOCs more bandwidth for services like video, enabling the telcos to compete with cable companies that already have rolled out voice services in addition to high-speed cable and video. Fiber also is much less expensive to maintain on the long term than is copper.

With the release of both the FCC review results and the RBOC consortium’s specific FTTP requirements still pending during SUPERCOMM, vendors talked about this potentially large new RBOC contract opportunity with cautious optimism.

Probably the most optimistic was Alcatel, which would seem to be the favorite to win at least a good portion of the FTTP business from the RBOCs, which are looking for a solution based on broadband passive optical networking (BPON) technology. Alcatel is far larger than the other FTTP PON vendors in the field, and has the ability to scale up manufacturing easily, if demand warrants, and to offer the RBOCs other related support services. Several years ago, Alcatel won a similar RFP issued by a RBOC consortium related to DSL. In fact, Verizon just extended its DSL contract with Alcatel through the end of 2005. If the RBOCs elect to take fiber to the curb rather to the home, some form of DSL likely would be the final link to the user. As if that wasn’t enough, Alcatel also is the equipment supplier for SBC’s greenfield PON deployment in a San Francisco community called Mission Bay.

But companies like Optical Solutions, Terawave Communications, Quantum Bridge and Wave7 Optics Inc. also have been at PON for some time now, although they’ve had the most success in business applications and municipal builds. Look for these smaller vendors to partner with larger suppliers like Cisco Systems Inc., Lucent Technologies Inc. and possibly Nortel Networks, which can offer them the manufacturing scale, integration services and other support required by the RBOCs.

William Engler, vice president and general manager of broadband access internetworking systems at Lucent, says the company is working with a PON vendor partner, which he declined to name. Lucent has been aggressive in marketing the professional services aspect of its business, which would be a key part of its selling point in the PON proposal.

“We know the RBOCs aren’t going to buy direct from us, instead we’’ will be a supplier through a larger channel, says Frank Lockwood, vice president of marketing at Terawave, whose ATM-based PON solution is today used primarily in business applications.

Quantum Bridge already has a relationship in place with a large vendor. It was announced at SUPERCOMM that Motorola now manufactures, sells and brands the smaller supplier’s ONT, an APON-based residential network interface device that attaches to the side of a home. Jeff Gwynne, senior vice president of marketing, says Motorola, with its experience in set-top boxes, cable modems and cellular phones, is well versed in the CPE side of equation. That could be important in the case of PON, because the PON CPE is the most sensitive piece of the fiber to the premises puzzle in terms of bringing down pricing and mass delivery and distribution, Gwynne says. However, Quantum Bridge won’t rule out additional relationships with other large vendors. He says the company has been selling its PON equipment for three years to customers including Comcast Corp., Time Warner Cable and various municipalities.

Gwynne says, although this RBOC RFP is new, the RBOCs’ activities in PON are now. The former Bells are among the 22 service providers involved in FSAN, an eight-year-old industry consortium focused on APON and future gigabit PON technology. FSAN makes technical recommendations relating to PON to the ITU.

AFC, the smaller rival to 1,000-pound-accessgorilla Alcatel, also is a likely bidder in the new RBOC RTP. In fact, the company recently upgraded its AccessMAX under AFC’s FiberDirect brand to support fiber to the home applications.

ADTRAN also plans to join the pack at some point. Keith Atwell, director of business development, says his company doesn’t have a PON solution “but this could change.” Atwell says ADTRAN tells its customers “our plans are what your plans are,” and adds that ADTRAN wasn’t in on the initial DSL RFP the RBOCs issued a few years ago “but now we’re a big player in the DSL space.”

Of course, whether PON technology will see the kind of success that DSL has experienced in RBOC networks will depend upon the FCC ruling, the prices at which vendors are able to deliver PON equipment and whether the RBOCs decide to push fiber to the curb or home in greenfieldonly deployments or as a significant network upgrade strategy.

Ralph Ballart, vice president of broadband at SBC Technology Resources Inc., would not discuss with xchange the product pricing SBC and its RBOC counterparts are looking for, but says “I’m pretty optimistic we’ll get good numbers.” Various vendors tell xchange end-to-end per subscriber system bids are expected to range from $350 (according to Terawave) to around $1,000 (opines Lucent) or about $1,200 (says Quantum Bridge).

Ballart adds the RBOC is “studying all possible applications” of FTTP, “but greenfield is high on the list because the trench is open.” He says: “Moore’s Law doesn’t apply to trenching.”

BellSouth, SBC, and Verizon have said they plan to independently finalize their FTTP deployment plans for 2004 and beyond based on the evaluation of vendor proposals, ongoing internal studies, and on the resolution of related regulatory issues. Assuming the FCC’s ruling on fiber access is favorable to the RBOCs, these carriers are expected to name vendors sometime in the September time frame.

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