OEN delivers Houston customized content

Dec. 1, 2005

Optical Entertainment Networks (OEN-Houston) turned a few heads when it debuted at the recent FTTH Conference, thanks to the company’s claim that it would begin delivering IP-based triple play services via fiber to a whopping 1.6 million homes in the Houston area. Houston may be the 10th largest TV market in the country, but OEN is far, far more than simply about TV.

Dubbed “Fision,” OEN’s entertainment service is designed to leverage the full capabilities of FTTH. Officially launching this month in the Cypress-Fairbanks area of north Houston, Fision will deliver both local and long-distance IP voice services, plus Internet access at speeds of 10-100 Mbits/sec-eight times the speed of a T1 connection.

But OEN’s key differentiator may be its ability to deliver 400 channels of standard TV and more than 50 high-definition TV channels, plus video on demand (VoD) and original and specialty programming developed and created at OEN Studios, the company’s creative television production arm. “We use video like most companies use PowerPoint,” jokes OEN president and CEO Thomas Wendt,.

What sets OEN apart from the typical cable multiple systems operator (MSO), for example, is its ability to create and deliver what Wendt calls “communities of content.” The folks behind OEN originally developed the concept as a unique service to offer the community, but it has evolved into “a great way to beat cable,” says Wendt.

Houston has a very diverse population, including a large and robust Hispanic community, which represents one of OEN’s first communities of content. OEN struck deals with content providers in the United States, South America, Latin America, Europe, and Mexico to amass what it claims is the largest library of Hispanic content available in the country, if not the world. OEN’s channel lineup includes Hispanic programming from HBO, Showtime, and ESPN, plus Hispanic channels Univision, Galavision, Telefutura, and TuTv.

“These are channels that the cable companies can’t do,” Wendt asserts. “Because what are they going to do-eliminate English programming, eat away at their core to make room for the Hispanic programming? Are they going to decrease the quality of their signal to compress it into there? It’s a hard, hard decision that they have to make.”

Thanks to the nearly limitless capacity of fiber, that’s one decision OEN doesn’t have to make. In fact, the company is developing similar communities of content for Russian, Vietnamese, and Korean subscribers in the Houston network’s footprint. Eventually, says Wendt, OEN would like to offer programming optimized for movie buffs, music lovers, sports fans, and other groups.

A partnership with the Diabetes Center of America has created another community of interest for OEN. There are 900,000 diabetics in the greater Houston area, and OEN plans to launch a channel specifically targeting their needs with a complete lineup of original on-demand programming. Moreover, thanks to an external smart card in the set-top box, subscribers can connect their glucometers-the devices that measure blood sugar-to the set-top box and send test results in real time back to their health care provider. “When you have a gigabit per second going all over, it’s really easy to do these things,” says Wendt. “It’s not rocket science anymore.”

OEN also has the capability to enable subscribers to create their own networks. OEN will be able to accept content from subscribers via their personal video recorder (PVR). “We accept this content, and then other people can watch it on demand or in real time,” Wendt explains. “You can say, ‘Look everyone, I’m going to go multicast the birthday party in the backyard.’ We eventually see a point where we have ports using WiMax all over cities. Then you could say, ‘Hey, I’m at the soccer field. I’ve got a camera, and I want to multicast this game.’ We’re not just creating the content; the community is creating the content.”

But to deliver these customized services, you need a conduit, and therein lies the company’s genesis. According to Wendt, OEN was founded by like-minded individuals who believe in two principles: FTTH is the future and IP ultimately will emerge as the ideal method for video service delivery.

The company knew it needed the unlimited capacity afforded by fiber to support its high-bandwidth services, and last February, it hit the mother load. OEN inked an exclusive 35-year deal with Phonoscope, the largest privately owned metro fiber network. Phonoscope’s 8,000-route-mi network already reaches 250,000 household easements and brings OEN to within 100-500 m of about 1.6 million households throughout Houston and seven neighboring counties.

Those in the investment community are often leery of FTTH projects, says Wendt, because such undertakings are expensive, revenue models are unproven, and the return on investment is lengthy. But OEN mitigates such concerns by leveraging Phonoscope’s existing network. “We will be paying for the drops, but compared to the cost of putting in all that backbone, our cost of deployment is extremely low,” he admits.
Scheduled to launch this month in Houston, Optical Entertainment Network�s �Fision� will deliver IP-based voice, video, and data, including 400 channels of standard TV, more than 50 channels of HDTV, and a minimum data connection of 10 Mbits/sec per subscriber.

In terms of the drops, OEN has employed a two-pronged infrastructure strategy. The bulk of OEN’s subscribers will receive service via an EPON, which can support anywhere from two to 32 houses on a single fiber, and the bandwidth is shared among them. “Especially when you’re dealing with apartments that may have only one TV set, there’s no sense giving them a full gigabit,” explains Wendt. “At the same time, you’ll run into people who have a mansion, and they have 14 TVs. You don’t want them upsetting the balance of your network, so you say, ‘Okay, I’m going to give them an active connection, a dedicated fiber all the way to the network.’”

Flexibility, he says, is a key component of OEN’s network topology. “People have turned active versus passive into a religious battle, which has always puzzled me,” he muses. “If one becomes more dominant than the other in fiber to the home, who cares? Eventually, you’re going to need both.”

Analyst Michael Render, president of Render Vanderslice and Associates (Tulsa, OK), tracks the FTTH space, and he’s not aware of another network that employs both active and passive technology. Several network operators are currently migrating from BPON to GPON and are therefore running both simultaneously, but OEN seems to have entered new territory with its hybrid approach. “What it says, in a way, is the technology isn’t as important as just getting a lot of bandwidth to the customer to allow a platform for their applications,” Render notes.

OEN tapped Alloptic (Livermore, CA) to provide its EPON equipment. While momentum continues to build for GPON-at press time, the RBOCs appeared close to issuing an RFP for GPON equipment, for example-OEN has opted for EPON, partly because of the ubiquity of Ethernet but also for its ability to support video services.

“Ethernet is the native language of IP, and it is ideally designed for large packet-sized applications like video,” reports Alloptic product marketing director Mike Serrano. “For this to be a lifelike experience for the consumer, you need a transport protocol that has large enough packets so you don’t end up with pixelization or you don’t end up leaving some packets behind.”

Swedish vendor PacketFront will supply the active equipment and its control and provisioning system, while Nexans and Corning were tapped for the cable infrastructure. OEN has developed several systems internally, including ad-insertion systems, online gaming systems, content management systems, and user interfaces for the TV.

OEN plans to launch European operations in the second quarter of 2006 and has already inked deals with network operators and content providers abroad. For now, though, Wendt remains bullish that OEN’s Houston deployment will serve as a catalyst for what he envisions as “the fibering of America.”

“Once you prove that you can take business away from an incumbent and [achieve] the revenue models we believe are available, then we think the capital community, which is watching us very closely, will start to get aggressive about investing in fiber to the home,” Wendt contends. “Everyone believes it will happen; the question is, who will do it and when will it happen?”

For his part, Render believes that OEN is taking a step in the right direction. “We have talked for quite some time about two phases of convergence, the first being the simple triple play of video, data, and voice over one medium,” he offers. “But what they are doing is starting to converge it further where you can easily go back and forth between a telephone call and a video or from a video to a website. This true convergence, this idea of doing face-to-face videoconferencing with doctors, online education-as all these things that are possible start to happen, that could truly be a tipping point for fiber to the home.”

Meghan Fuller is the senior news editor at Lightwave.