Too good to be true?
Have you ever known someone who seemed to prefer depression? I'm beginning to wonder if the industry I cover (or at least the people paid to evaluate it) has such a personality. Just as this issue was leaving for the printer—and I was leaving for SuperComm—BellSouth, SBC, and Verizon announced their intention to issue a joint request for proposal (RFP) based on common requirements for what they called "fiber to the premises." Yet, almost as quickly as excitement began to build on the show floor over the possibilities this action could represent, a counter-wave of skepticism arose regarding how "real" this opportunity was.
Certainly one can understand a cautious approach to a prospect that seems too good to be true. The potential benefit to the developers of optical access equipment is obvious. But the effect of the RBOC initiative extends beyond companies in the passive-optical-network (PON) space. Clearly, the carriers will need more fiber. And I spoke to at least one developer of coarse WDM technology who expected to land on a team pursuing the contract that will use his product to provide PON extension capabilities.
Over and above the suspicion that nothing so potentially lucrative to so many could possibly be real, the fact that we're talking about the RBOCs invites cynicism in some quarters as well. The preliminary results of the Federal Communications Commission's triennial review, announced last February, handed the incumbents a virtual monopoly on new broadband infrastructure—provided that infrastructure used fiber. To some observers, the proposed RFP—and the implication that its progress hinged on the final results of the review—was little more than a smoke signal to the FCC that the February fiber ruling had better stay in place if the government wanted broadband infrastructure investment. Like any smoke signal, the cynics suggested, the RFP will dissipate once the RBOCs are sure the message has been received.
As I write this, the RFP has not been released and the FCC has not made its final rulings. However, I find the amount of cold water thrown at this opportunity more indicative of reflexive negativity than prudence. At some point, carriers will once again invest significantly in infrastructure, if only to meet bandwidth demands—or, perhaps in this case, to take advantage of regulatory generosity and compete with the triple-threat capabilities of a growing number of cable-TV carriers. But it now seems clear that will happen against a backdrop of nay-sayers who will be just as wrong about the upturn as they were about the downturn.
Stephen M. Hardy
Editorial Director and Associate Publisher