Charting the Course

SBC, Verizon Pursue Divergent Tacks on FTTx

Although, as with all things SBC, its plans hinge on favorable regulations, SBC could spend up to $6 billion in the next five years on fiber-to-the-node deployments, said Chairman and CEO Ed Whitacre in his keynote speech at SUPERCOMM this summer.

In the speech, he noted recent decisions related to RBOC wholesale requirements now allow the company to move forward more aggressively with broadband. “The recent decision by the Bush administration to allow unlawful telephone wholesale rules to lapse and let stand the FCC’s decision not to unbundle broadband is a positive step,” said Whitacre. “We are now more optimistic that we may be headed toward rational, market-oriented regulations that will promote investment and deployment of new capabilities.”

He added “the fact that we seem to be overcoming these obstacles... is a source of optimism” at SBC. The ruling means SBC now will “deploy more fiber than we otherwise” would have.

SBC’s new fiber-to-the-node (FTTN) plan targets millions of residential and small business customers in the carrier’s territory; whereas the carrier’s previously announced FTTP strategy initially is focused on new housing and business developments. Whitacre said the company is going with FTTN technology because digging trenches to lay fiber in areas where buildings already exist creates too much disruption.

In a SUPERCOMM interview with xchange, Chris Rice, SBC’s executive vice president and CTO, added the FTTN architecture also will allow SBC to get to market with a bundle of services in one-fourth of the time it would take to build FTTP networks. Rice added if additional bandwidth is needed in these FTTN networks, the company can either bond the copper pairs that run from the neighborhood nodes to the users, or it can push fiber closer to those customers. SBC plans to issue a request for proposals for the FTTN equipment in the near future, said Rice, adding that award will be separate from its FTTP award, which last year was given to Alcatel.

While SBC already has begun to deploy FTTP, Whitacre said in late June that FTTN builds are pending final regulatory requirements and successful completion of neighborhood-level trials, which were set to begin this summer.

The FTTN infrastructure will provide each customer with 15mbps to 25mbps of downstream and 1mbps to 3mbps of upstream bandwidth. That will allow SBC to deliver facilities-based video, voice and high-speed Internet services, Whitacre said. (The company already offers television services as part of its bundles through a resale deal with digital broadcast satellite provider EchoStar.)

SBC also revealed at SUPERCOMM it is the first U.S.-based service provider to test an IP-based switched television service based on the Microsoft TV IPTV platform, which enables standard and high-definition programming, customizable channel lineups, VoD, digital video recording, multimedia interactive program guides, event notifications, and other features and services. IP-based television services also will allow TV devices to connect with other devices in the home, according to SBC. The carrier and Microsoft plan to begin field trials of the IP-based TV platform later this year.

Noting SBC’s acquisitions over the years, Whitacre said, “we are not just trying to be bigger versions of our old selves.” SBC, he said, “is working hard to be a communications company” that looks different than a traditional telco. That’s being achieved through SBC’s investments in IP technology and fiber, he said. “This is a big transformation,” Whitacre said, that until the recent Bush administration ruling, was being held back. That ruling will “offer extraordinary benefit to American consumers,” Whitacre said, noting President Bush’s recent comments on the administration’s desire to make broadband widely available to the U.S. populace.

As for Verizon, the company at SUPERCOMM confirmed it’s on track to reach 1 million homes with its FTTP builds in nine states and more than 100 wire centers by the end of this year.

Verizon intends to use FTTP even in brownfield deployments to ensure it has plenty of bandwidth for any services it might want to deliver down the road, said Mark Wegleitner, CTO and senior vice president at Verizon. “We still remain somewhat skeptical of a couple of tens of megabits,” said Wegleitner. “We’d like a little more headroom.” While Verizon plans to deliver ADSL2+ as an evolution of its DSL service, he explained FTTP will be Verizon’s primary video vehicle, adding that he questions whether DSL-based video can be fully competitive with cable’s video offerings.

Following the joint FTTP procurement effort from BellSouth, SBC and Verizon that started a little more than a year ago, Verizon in mid-May announced it had begun deploying PON-based FTTP technology in Keller, Texas, a growing community in the Dallas-Fort Worth area. The $15 million deployment is a first for the Bell company. But Keller is just the starting point. Verizon is building FTTP networks based on AFC technology in undisclosed locations in nine states.“We are, as we speak, building in all nine states,” said Keiko Harvey, senior vice president of the FTTP program office, in a SUPERCOMM briefing with reporters. Verizon this year will spend $1 billion on FTTP. By the end of 2005, Verizon plans to have passed 3 million homes with FTTP, according to Harvey.

In Keller, FTTP equipment already has been placed inside Verizon’s local central office as well as on aerial cables, in underground conduits and buried throughout neighborhoods, where more than 1 million feet of fiber-optic cabling had been laid as of late June.

Verizon plans to begin offering service over FTTP in Keller and other unspecified communities this year. The initial product set will be traditional voice and a selection of super-fast broadband products — featuring download speeds of 5mbps, 15mbps and 30mbps. Pricing was not released. Video products are on the drawing board for next year.

Verizon also announced it will open in Dallas a new national technical support center for customers of products delivered over FTTP.

Meanwhile, SBC is working on FTTP networks in Canton Township, Mich., and Pabst Farms in Oconomowoc, Wis.

Click here to view FTTP architecture diagram

The former, an overbuild to existing homes, is in the early stage design phase, Joe Walkoviak, president and CEO Midwest, told xchange. Pabst Farms, where 150 homes had been sold as of early July, is under construction and the first homes on the FTTP system are expected to be turned up this fall, says Walkoviak, who had just returned from a visit to Oconomowoc.

Unlike Verizon’s Keller deployment, these SBC FTTP activities are very clearly trials. “For the initial stage of Pabst Farms, we also put in copper to make sure we have no issues with services,” says Walkoviak. Hopefully, we’ll never have to use the copper.”

SBC initially will offer just high-speed Internet access and Class 5 voice services on its trial FTTP networks, says Walkoviak. The company wants to do more testing of equipment and software; fine-tune provisioning and other processes; and have a better understanding on how to troubleshoot on the FTTP networks before offereing video service, he adds.

If SBC is convinced FTTP is a workable solution following these trials, the company will consider the technology for greenfield deployments and situations in which copper needs to be rehabilitated, says Walkoviak.

The SBC and Verizon Keller deployments soon will join a growing list of optically-enabled communities, which now number 128, according to the most recent research published in mid-May by the Fiber-to-the-Home Council and the Telecommunications Industry Association. Prepared by consulting firms Render, Vanderslice & Associates and TeleChoice, the list tracks communities nationwide that are delivering broadband services to customers through FTTH solutions.

PON-based FTTP “is growing rapidly in Asia Pacific, especially Japan, where hundreds of thousands of subscribers are using ePON and aPON,” says Michael Howard, principal analyst and co-founder of Infonetics Research Inc. “PON is slowly lifting off in North America, mostly in new home builds and in neighborhoods where the copper plant is being rehabilitated.We expect PON to continue expanding rapidly through 2007.”

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