fttp: verizon gets gigE with it

VERIZON COMMUNICATIONS INC. IS preparing to move from its current ATM-based BPON FTTP technology in favor of an IP-based GPON FTTP architecture. “GPON is something we’re evaluating with the vendor community, especially 2.4 gig, and we’re looking to start rolling it out in 2006,” Mark Marchand, director of media relations at Verizon, told xchange in April.

This news, of course, points to a larger trend of service providers adopting IP both to reach higher bandwidth capacity as well as create networks that deliver a wider variety of voice, video and data services, and without doing overlays.

Marchand tells xchange Verizon expects to name its GPON vendor(s) “probably early next year; best case is end of this year.”

At the same time Verizon is planning a move to GPON, the carrier is in the midst of deploying BPON FTTP systems to homes and businesses in about 200 communities in parts of several states, including California, Delaware, Florida, Indiana, Maryland, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Texas and Virginia. In those states, Verizon already has passed 1 million homes and businesses. It expects to have passed 3 million by the end of this year.

“Part of Verizon’s reason for choosing BPON when they did is because they wanted to do video as an RF overlay, so they didn’t need a specialized set-top box in the home,” says Malcolm Loro, director of product marketing for the broadband access group at Ciena Corp. “But when you get into the IP world, GPON can take you to switched digital video and IP for much more interactivity so you can do more VoD, stream content and personalize content.”

Verizon’s current FTTP BPON systems provide 622mbps downstream and 155mbps upstream, typically divided by 32 individual homes. That allows Verizon, initially, to offer customers its FiOS-brand data products at 5mbps or 15mbps downstream and 2mbps upstream, or 30mbps downstream and 5mbps upstream.

GPON technology, however, will enable Verizon to turn it up a notch, offering 1.2gbps downstream and 622mbps upstream, or 2.4gpbs and 1.2gbps. “What it will do is enhance our ability to offer more applications, including variations of IP TV,” says Marchand, adding that Verizon will unleash its first digital broadcast video offering on its FTTP network later this year and will start rolling out IP-based services after that. “Overall, BPON provides a terrific platform for all three of the so-called triple play, voice, data and video — far more than any cable TV or other RBOC system being built now and for the foreseeable future,” Marchand continues.

In addition to the bandwidth, GPON allows Verizon “to look at more cost-effective architectures, such as Ethernet,” he adds. “Overall, GPON gives us the capability to offer more services and enhance the performance for our end users,” he continues. “We are now evaluating the move to GPON with our vendor community.”

“If you look at sales of large terabit Ethernet switches — Cisco [Systems Inc.], Force10 [Networks Inc.], very large Ethernet switches — Verizon is buying those. SBC is buying those,” says Bill Zakowski, vice president of business development at Amedia Networks, “and not just for data; for data, voice and video. So you look at the sales of these very, very large Layer 2 switches — that’s an indication of what’s going on.”

In late 2003, Verizon disclosed its initial vendors for the BPON FTTP build. Advanced Fibre Communications Inc., which now is owned by Tellabs, was picked to provide the central office and premises optical electronics for the project, also known as the “active” elements of the FTTP build. The carrier also named seven suppliers for the outside plant/cable piece. And just this April Verizon disclosed it had awarded Motorola Inc. a five-year contract to supply ATM-based BPON equipment for the FTTP effort. Terms of the contract were not disclosed.

Verizon’s Marchand says the carrier always intended to use a second vendor for the active component piece of its FTTP, adding “we tend to be a two-vendor company.” He says that makes sense, given the size of the FTTP build, which will take place in half of the states within Verizon’s region. Under the new contract, Motorola will provide Verizon with advanced electronic equipment that will be installed in Verizon central offices, as well as at customer locations. This equipment includes high-density, multiprotocol optical line terminals (Motorola AXS2200 OLT), intelligent optical network terminals (Motorola residential and business ONTs) and video-optimized optical amplifiers (Motorola EDFAs).

Motorola was involved in the FTTP build prior to the announcement in April. In a separate multiyear contract announced in October 2004, Verizon selected Motorola to help build the video network infrastructure portion of FTTP, providing head-end technology, digital set-tops and integration services.

As for GPON, moving to this Ethernet-based version of FTTP will require both new optical network terminals (ONTs) at the home and new optical line terminals (OLTs) in the central office, according to Marchand. He notes there are 10 to 15 vendors in the GPON space, but wouldn’t disclose which ones Verizon is considering or the size of award it intends to make. “Perhaps ... some existing vendors could be involved, or totally new ones,” he says.

Tellabs declined to be interviewed for this article, but Stu Benington, Tellabs’ director of global portfolio marketing, recently told xchange that “Tellabs’ move to GPON will be pretty heavily communicated next year.”

Of course, Verizon’s relationship with Tellabs on the BPON build has not been completely smooth sailing. In discussing its financials last June, Tellabs reported it had to pay a $1 million fine to Verizon for missing a June deadline. The delay was caused by a parts shortage, according to one report. “While there were some initial delays/problems, expected with any startup effort of this scale and scope, AFC remains the major supplier of the ‘active’ electronics for our FTTP deployment effort,” says Marchand. “We continue to work with them. As is always the case with projects of this size, we’ll eventually add another vendor in this space.”

When Verizon moves to GPON, Marchand says, the plan is to use GPON “on a go-forward basis” but to leave in existing BPON equipment.

WORLDWIDE OLT AND ONT PON EQUIPMENT REVENUE HIT $525 MILLION IN 2004, AND is projected to grow to $2.2 billion in 2008, with port shipments reaching over 8 million, according to Infonetics Research’s biannual market share and forecast report, PON Equipment.

BPON is the PON technology gorilla in North America, making up 81 percent of North American PON revenue in 2004, and will continue its reign through 2006, when its successor, GPON, becomes more available. GPON is a flexible option for providers because it is designed to handle Ethernet, IP and ATM traffic, and can stream video over IP or a separate analog wavelength. GPON offers roughly twice the capacity of EPON.