Posted 04/15/2001
Network Solutions
Closer to Home
Vendors, Service Providers Push Fiber Further Into Neighborhoods
By Paula Bernier
More than 10 years have passed since the Bells undertook efforts to drive fiber to the home to offer voice, video and potentially other services. But, as happens so commonly in the world of high-tech, those plans never panned out. Infrastructure capital costs and a lack of revenue-generating services, it turned out, were the spoilers.
But the dream of driving fiber ever closer to the customer never died. That makes sense, since bandwidth demands continue to increase, and maintenance of fiber is typically less expensive than that of copper.
With those justifications still intact and improvements in technology pushing down the cost of fiber loop installations to equal to or just a little higher than that of copper, the notion of deploying "deep fiber" in residential areas is now experiencing something of a resurgence. The jury's still out as to whether it will get any further than it did the first go-round, but at least a handful of carriers are now working on fiber to the curb (FTTC) builds for new neighborhoods. At the same time, service providers are asking vendors to design affordable new network interface devices that could enable them to bring fiber all the way to the home.
"FTTC makes DSL services at prescribed speeds easy and predictable, while 'futureproofing' the local network and making value-added services, such as cable television, possible," writes Jeff Moore, senior analyst of network services at research firm Current Analysis Inc. (www.currentanalysis.com), in a recent report about FTTC and fiber to the home (FTTH).
BellSouth Corp. (www.bellsouth.com), according to Moore, already reaches about 200,000 homes in various new-build areas with six-home-node FTTC networks and has plans for several hundred thousand more. Meanwhile, Sprint Corp.'s (www.sprint.com) ILEC division is doing eight-home-node FTTC as a standard method of deployment, he says. BellSouth and Sprint declined xchange's requests for interviews.
"Sprint's use of FTTC will be for DSL," explains Ron Westfall, senior analyst of the broadband infrastructure unit at Current Analysis. "There's an interplay of marketing here because what you can't do is have one group of customers get higher bandwidth and another with lower. You want a consistent approach to marketing and selling the DSL product."
Sprint is using FTTC where DSL over copper from the CO is not a viable option, he explains. While enabling Sprint to extend the DSL footprint, FTTC also allows the service provider to "future proof" its network, because once it has fiber closer to the customer, it can upgrade a remote terminal card from asymmetric DSL (ADSL) to very high data rate DSL (VDSL). And VDSL requires the equipment to be very close to the user,-- typically within 5,000 feet, he says.
BellSouth, meanwhile, is using FTTC to offer DSL and TV services. Moore adds that BellSouth is moving "a minimum of thousands" of its Americast digital TV service customers from fixed wireless and satellite infrastructure to the newer FTTC network.
Meanwhile, a handful of competitive carriers are also employing FTTC to reach new home developments. One such company is First Mile Technologies Inc., which offers a bundle of services in a 900-home subdivision known as Centennial in Westfield, Ind. The company has captured "a couple hundred customers" since its service launch in August of 2000, says COO Mike Farmer.
First Mile plans to reach eight other developments throughout Indianapolis as well as new builds in Dallas, Denver and Tampa, Fla., in the coming years. Included in its bundle of services are local phone; high-speed data (offering 200kbps, 1mbps and 1.5mbps options); cable TV with a base offering of 60 analog channels; digital TV; home security; a community intranet; and resold long distance. And there are plans to add a video-on-demand capability by the end of this month.
First Mile's network takes fiber to nodes, each serving 50 homes, where all services are put over a coaxial cable to be transported to each home. All outside plant equipment is provided by ANTEC Corp. (www.antec.com), while Arris Interactive LLC (www.arris-info.com, a Nortel Networks Ltd. [www.nortelnetworks.com]/ANTEC joint venture), is the vendor for CO-based wares such as the boxes that do baseband Ethernet conversion. The capital equipment cost of the network, according to Farmer, is just shy of $2,000 per subscriber.
"The key for us [in choosing FTTC] was the fiber electronics," says Farmer. "If you're sharing the cost of a node between 50 homes, you're saving $1,300 a home subscribed by this over FTTH."
But First Mile is looking at FTTH for future deployments.
"In fact, one of our owners is Nortel, and Nortel's next product line is under the banner of FTTH," says Farmer. Nortel Networks declined to be interviewed for this article, stating it was not ready to discuss its plans for FTTC and FTTH.
The New NID
Farmer says a key piece in a FTTC to FTTH upgrade would be the installation of a new kind of home-based network interface device (NID) that would have to be multi-IP addressable.
"If you have four TVs, each kid has a PC, there's a PC in the study for the parents and there are six phones, each device in the fiber to the home environment needs to be able to send and receive IP addresses. The cost of those electronics are too high at this point," he says, noting those NIDs make FTTH deployments add $1,200 to $1,500 per home over the cost of FTTC. And although some vendors attempt to sell FTTH on a revenue model, Farmer says he's not interested in that. Instead, he's looking at it purely from a capital equipment cost standpoint.
"In fiber to the curb, you have one laser shared by multiple subscribers. With fiber to the home, you have to put a laser at everybody's house. That's what drives up cost--that laser, coax ports, the phone jack, Ethernet ports--all that processing to split off various services," says John Gibbs, director of access systems product marketing at Marconi Corp. plc (www.marconi.com), which says it's the leader in FTTC today with 3 million U.S. lines installed. "Those products are available at $900 to $1,000 per subscriber. They need to be $300 to $400 per subscriber for mass deployment."
That will happen if volumes go up on transceivers, but they'd have to reach millions of sales annually to get there, says Gibbs of Marconi, which also has a FTTH product line. He adds that the outside plant also plays a big role in how economical it is to bring fiber all the way to the home. Passive optical splitters, which would be used in FTTH deployments and would bring down maintenance costs because there would be no active elements in the field for the network operator to service, are not widely deployed. Volume deployments could also drive down the cost of that passive optical networking equipment and drive FTTH. But, as with most new technology, it's a chicken and egg problem.
Grande Communications Inc. (www.grandecom.com) is another company offering services via a FTTC network. The company has built a 24-home-node FTTC network in Texas in the Austin to San Antonio corridor, and in Houston. Grande said it expected to launch service in March or April. Its services include more than 200 digital TV channels with video on demand, high-speed data services, and full-featured local and long-distance telephone services.
"We're one of the new breeds of company that's doing what's been hyped for a long time. That is bringing fiber to home--down to 500 feet from the home," says Grande president Jerry James.
Grande is now evaluating new home-based NIDs and expects to deploy them once vendors can prove they are scalable and prices come down. "Recently, a large manufacturer developed an AC-powered NID that plugs into the house electric current--we rejected that," says James. "Now we're working on a DC-powered solution because we use DC power [in the Grande network]. They're prototyping it now, and by fourth quarter, we hope to test it in the field." James says AC-powered networks can lose power in a rainstorm, whereas DC power means the network is 911-compliant.
James declined to name the vendor Grande is working with on the NID. Its current vendors include Nortel, which provides it with a DMS-500 switch, as well as some optical equipment. Marconi provides the remote digital terminals, optical network nodes and related equipment. The network consists of an intracity SONET backbone with additional SONET rings to Marconi hubs, each serving 40,000 to 60,000 homes; 2,500-home remote digital terminals; and optical network units each serving 24 homes.
"It offers unlimited bandwidth to the home," says James. "We have SONET rings down to the remote digital terminal, so we're a completely passive network. We're not doing optical switching, but are optical to the remote digital unit."
Flirting With FTTH
While these other companies have started out with FTTC and are toeing the waters of FTTH, a startup service provider called WINfirst (Western Integrated Networks LLC, www.winfirst.com) took the fiber plunge last fall when it announced plans to take fiber all the way to the consumer. But four months after announcing a five-year, $800 million deal with equipment provider Lucent Technologies Inc. (www.lucent.com) and saying initial deployments would begin immediately, WINfirst has yet to launch commercial service.
"We're still not there in terms of customers. We are building all the elements of the network from the CO to the fiber--switching, IP routing and the switching office. I'm not trying to make excuses, I'm just trying to explain the magnitude of the job," explains WINfirst's Shiraz Moosajee, vice president of business development.
As of February, WINfirst said it expected to turn up beta customers in Sacramento, Calif., by May, and had tentative plans to go commercial by summer. Each month, the company hopes to reach about 10,000 homes in new developments with its network. Initial cities on its hit list include Austin, Dallas, Houston and San Antonio, Texas; and Sacramento and San Diego, Calif. Services are expected to include analog and digital cable TV; video on demand; high-speed Internet access; and telephone service, including lifeline POTS (offered using a Lucent 5ESS switch) and custom calling services.
Whether, or when, WINfirst and other newcomers get FTTH networks up and running, Moore of Current Analysis doesn't expect the adoption of the access technology to be significant any time soon. Barriers to FTTH include high capital costs, lifeline issues related to power (some methods of FTTH include lines that require power from the home to operate the phone line, which would require at least a battery backup as an add-on), and the question of whether households really need the 100mbps that some vendors are promising, Moore notes.
FTTH is not a priority among top ILECs, and the fact that BellSouth is not expanding on its 400-home 1999 deployment in Atlanta is telling, says Moore. Meanwhile, Sprint is experimenting with FTTH in Pacific, Calif., but the company has said nothing about deployment, he says.
Marconi's Gibbs disagrees with Moore's grim assessment of FTTH's potential. He says Marconi announced a fiber-to-the-home trial with Verizon Communications Inc. (www.verizon.com) last year at SUPERCOMM. The carrier has not given an update as to its status, but Gibbs says, "it's still very, very active. Incredibly active."
Gibbs adds that in the last few months several major carriers have come out with formal proposals for FTTH, with plans to deploy in 2002. Among them is "a major ILEC that has an RFP [request for proposal] in the Midwest."
"Ten years ago, people thought video on demand would be the driver for fiber to the home. But now with demand for higher-speed access to the home and other applications, there's a whole lot of interest. And electronics costs have dropped, enabling service providers to make the business case for fiber to the home," adds Jim Pattillo, product marketing manager for fiber apparatus at Lucent.
Service providers could help further lower the cost of equipment by banding together, similar to how the Bells did in forming the Joint Procurement Consortium to get DSL equipment, says Westfall of Current Analysis. Network operators interested in FTTH might also benefit from developing partnerships with content providers so they can create the infrastructure to automatically provision bandwidth on demand for services like video on demand, Westfall adds. That could help standardize portal deployments so content providers and bandwidth providers are on the same page, he says, and justify investment in FTTC and FTTH by creating quick access to all that bandwidth for specific applications.
"As wonderful as the technology sounds," says Westfall, "it all boils down to what services you can offer that customers are willing to pay for."
