Verizon, SBC on Different Tracks to Residential Fiber

Verizon Communications Inc. today confirmed it’s on track to reach 1 million homes with its fiber-to-the-premises builds in nine states and more than 100 wire centers by the end of this year. The company held a meeting with press today at SUPERCOMM to provide an update on its FTTP initiative. The Verizon meeting was just a few hours after Ed Whitacre, president and CEO of fellow RBOC SBC Communications, announced that SBC may spend up to $6 billion in the next five years to push fiber to 300- to 500-home nodes for delivery of IP-based digital TV, super high-speed broadband and VoIP services.

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, says Mark Wegleitner, CTO and senior vice president at Verizon. “We still remain somewhat skeptical of a couple of tens of megabits,” says Wegleitner. “We’d like a little more headroom.” While Verizon expects to deliver ADSL2+ as an evolution of its DSL service, he explains that 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.

Meanwhile, SBC has opted to use FTTP in new developments only, and to bring fiber to 300- to 500-home nodes in existing deployments. Chris Rice, SBC’s executive vice president and CTO, says that will allow SBC to get to market faster with a bundle of services over 15 to 25mbps downstream and 1 to 3mbps upstream connections. Fiber to the node will enable SBC to get to market in one-fourth of the time it would take to build FTTP networks, he says. And Rice adds that if additional bandwidth is needed in these fiber-to-the-node networks down the road, 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 (RFP) for the fiber-to-the-node equipment in the near future, says Rice, adding that award will be separate from its FTTP award, which last year was given to Alcatel.

Following the joint FTTP procurement effort from BellSouth, SBC and Verizon that started a little more than a year ago, Verizon in mid May of this year announced it has begun deploying 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,” says Keiko Harvey, senior vice president of the FTTP program office. Verizon this year will spend $1 billion on FTTP. By the end of 2005 Verizon expects to have 3 million homes passed 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 has been laid.

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.

The Keller deployment 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 (FTTH) Council and the Telecommunications Industry Association (TIA). Prepared by consulting firms Render, Vanderslice & Associates and TeleChoice, the list tracks communities nationwide that are delivering broadband services to customers through FTTH solutions.

Thirty-six communities representing a cross-section of America were added to the list since it was last compiled in September 2003. These include cities such as Indian Head, Pa.; Joshua, Texas; Holiway, Minn.; Clovis, N.M.; Jamestown, N.D.; Gypsum, Colo.; Scio, Ore.; and Phoenix. The list shows that FTTH deployments continue to be driven by municipalities, CLECs and residential developers. Other infrastructure providers include RBOCs, ILECs and power utilities. More than half of these deployments are confined to neighborhood developments, but a significant percentage (30 percent) extend throughout a municipality and a few (3 percent) throughout entire counties.

The new analysis also shows an increase in FTTH subscribers, with average subscriber take rates exceeding 40 percent overall and more than 75 percent in some communities. Since launching its FTTH network in St. Marys, Ohio, for example, CLEC TSC has experienced a 75 percent subscription rate. TSC overbuilt the pre-existing copper network to provide high-speed Internet, telephone and cable television service to this city of approximately 9,000 people.

“This technology offers the most advanced communications in the world,” says St. Marys Mayor Greg Freewalt. “We are confident it will help attract new businesses to our community.”

Attracting tenants to empty office buildings and residents to greenfield residential developments is a selling point for infrastructure providers like Verizon that are seeking buyoff from planners and builders. While state and city officials turned out for Verizon’s press conference announcing the buildout, they are not offering Verizon incentives. However, the carrier is partnering with local developers.

One of Verizon’s selected vendors, Corning Cable Systems, also announced in May a formal marketing initiative to partner with homebuilders to promote the benefits of fiber-optic infrastructure to builders and potential homebuyers. Pulte Homes, which has selected PAXIO Inc. to design, install and service fiber networks in the San Francisco Bay Area, is a charter member of the Corning Connected Community Program. Relationships with other builders are expected to be announced later this summer.

To qualify as a Corning Connected Community, each connected neighborhood must provide at least 5mbps symmetrical service to all homes via fiber-optic connections using Corning products, which cover the outside plant from the CO to the home. In turn, Corning supports the community with marketing tools, such as signage, leaflets and advertising materials, designed to educate prospects about the benefits of owning an optically-connected home. The company has begun a branding campaign at HomeBuilders.com; users clicking on the “Find a New Home” tab will see the banner ad on the right side of the screen showing the Corning Connected Community logo.

“We also have a Corning Connected Community Web Site to educate home buyers on the value that fiber to the home brings you,” says Bernard Deutsch, director of market development. “We help them market their communities.”

Corning also will support builders’ public relations initiatives for individual developments as they come on the market.

Pete Mahnke, market development manager, says while builders like Pulte may already have selected their installer or service provider, Corning also can make recommendations or provide training to preferred contractors.

Corning touts advances in easing installation of FTTx deployments. In February at the 2004 Optical Fiber Communications Conference, for example, it introduced a pre-terminated access solution that combines the OptiSheath Advantage Terminal with up to 12 “pre-connectorized” OptiFit Advantage Drop Cable Assemblies. Deutsch says the ability to connect subscribers without re-entry into the terminal reduces the time to connect subscribers by 50 percent. In addition, he says ease of installation enables lower-skilled techs to do the job.

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