xchangemag.com | March 5, 2002 | By Fred Dawson

Fiber in the loop is making a quiet comeback among strategic planners at ILECs and other entities who are looking for ways to enter the “triple play” residential services market with some measure of advantage over incumbent cable operators.
BellSouth has gone further with FITL than anyone with an upgrade of narrowband fiber loop systems to broadband fiber to the curb (FTTC) in networks now passing close to 300,000 households, more than 50,000 of which are taking video services, according to company sources. Verizon Communications, in what officials say is a trial that could lead to wider deployments, is working with a developer in Brambleton, Va., a planned community near Leesburg, to deploy a fiber to the home system (FTTH). And Sprint’s ILEC division is planning to test FTTH at an undisclosed location this year, according to informed sources.

Adding to the impact of these activities, several new broadband service providers are building large scale FTTC or FTTH systems in California, Tennessee and Texas, and more than a dozen municipalities or other public authorities have launched FTTH projects in various towns around the country. It all adds up to a much improved market opportunity for suppliers of broadband fiber access systems, notes Peter Hayman, senior marketing manager for the advanced systems group at Alcatel.

“The ILECs are very cautious and will be conducting a lot of field trials before we see major deployments (of FTTH),” Hayman says. “But, with success of the trials, we anticipate they’ll make 100 percent use of all fiber networks in greenfield buildouts.”

Much faster expansion of the market for FTTH will be driven by municipally owned projects and big housing project developers, Hayman adds. “There’s a high tech draw that cities and developers want to exploit, and they don’t have the rapid return on investment requirements that the ILECs have.”

The new market conditions have prompted Alcatel to introduce what it calls a “fiber to the user” broadband system, to designate the fact it is for businesses as well as households, which Hayman says is the first all-fiber access system to conform to the ITU’s new Broadband PON (passive optical network) standard. By employing multiple wavelengths for different services, along with passive splitters and very low cost optoelectronic devices at subscriber premises, Alcatel can offer its system at close to cost parity with a state of the art hybrid fiber/coaxial system and at costs that are about equal to the costs of installing a digital loop carrier-based network extension with ADSL into a newbuild area, Hayman says.

The Alcatel 7340 FTTU system puts services onto three wavelengths delivered from the central office at a distance of up to 20 km. from the user, with one wavelength used for voice and data in the downstream, one for video on a point-to-multipoint HFC-like basis and one for the return. The video feed, delivered as a QAM signal in traditional cable fiber mode at the 1550 nanometer wavelength, can be split to feed eight fibers, each of which can be split again into strands serving 32 homes each, Hayman says. The ATM-based voice and data wavelength, operating at the 1310 nm, can be split to serve up to 1,152 households from the single strand out of the central office, he adds.

Alcatel has its work cut out for it if it hopes to make inroads into the fast moving FITL market, where the dominant player in the U.S. is Marconi. BellSouth is using Marconi’s technology, and Marconi has been working closely with Verizon since early 2000 to develop the FTTH system that’s being deployed in Brambleton. Marconi is also the supplier of FTTC systems being deployed in Austin, San Antonio and points in between by Grande Communications and an FTTC system deployed in Knoxville, Tenn. by Knology Inc., along with other smaller projects around the country.

By all appearances, Verizon’s interest in use of FTTH technology goes well beyond the Brambleton project, a planned community near Leesburg that envisions construction of hundreds of single and multiple dwelling units over the next decade. “Usually, when an RBOC does a trial like this they deploy a traditional network as a backup, but this is something they’ve been working on for a long time, and there is no backup,” notes Mark McDonald, vice president of Marconi’s broadband fiber access unit.

“Verizon believes that developers are key to expanding the reach of advanced services,” says Mary Yarbrough, vice president of affiliate integration at Verizon. “By collaborating with developers, we can deliver unparalleled high tech services, attractive prices and streamlined billing.”

Verizon is the first RBOC to show a willingness to work with third parties in this fashion, says Tom Reiman, president of The Broadband Group, a consulting firm that represented the Brambleton Community in drafting the technology master plan for the project. “Cable operators are also starting to be motivated in this direction, although it’s definitely not a groundswell yet among incumbents,” Reiman says. With about 40 planned community projects in play around the country, his firm would like to see more incumbents willing to do business with developers, because there are fewer competitive carriers out there to do business with, he adds.

The Marconi system developed for Verizon marks a departure from past designs, even in the case of Marconi’s commercial products, McDonald notes. “They’ve brought new thinking into this by calling for a low split ratio of only four or eight homes per splitter on the PON,” he says. This approach allows technicians to more easily view and test the connections when they install the links, which leads to fewer truck rolls for follow up repairs. The low split ratio also opens the opportunity to eventually deliver a single wavelength over the coarse WDM system to each end user, although, at this point, the separate wavelengths in the Marconi system are used to segment voice, video and data, much as is the case with the Alcatel system.

One measure of the validity of the claim that FITL has reached cost parity with HFC is Knology’s decision to shift to the Marconi FTTC platform for its new build in Knoxville. All of the other nine markets Knology has under construction in the Southeast are HFC, but the firm, with about half a million homes passed and 1.5 million targeted by 2005, has made to the move to FTTC “because it costs the same as HFC,” says Rodger Johnson, CEO. “Ultimately, all of us who are building these new networks will take the position that we want to do fiber as deep as we can,” he says.