BellSouth, SBC Communications, and Verizon released their much-anticipated request for proposal (RFP) for fiber to the premises (FTTP) equipment June 19. While vendors scramble to position themselves to compete for an award that would finally stamp passive-optical-network (PON) technology as legitimate (see related story, "Handicapping the FTTP market," page 41), pundits have questioned whether the three carriers are more interested in influencing Federal Communications Commission policymaking than in purchasing new equipment. Sources at two of the carriers, while admitting that the final configuration of the FCC's Triennial Review will have a significant effect on their enthusiasm for FTTP, assert their interest in optical access gear is sincere.
According to Steve Rago, principal analyst at market research and analysis firm iSuppli, the political angle of the initiative should not be ignored. The preliminary results of the Triennial Review, issued last February, failed to summarily remove the requirement for RBOCs to share their UNE-P switching facilities. However, the commissioners did grant near-monopoly status in broadband to the incumbents by granting them sole proprietorship of fiber-optic-based infrastructure they install in the local loop—they would have to unbundle a transmission path suitable for narrowband services if copper infrastructure is retired along those routes.
Rago agrees with many in believing that the three carriers are using the RFP at least in part to suggest to the FCC that they are willing to follow the commission's lead in footing the bill for a broadband infrastructure upgrade in the United States—as long as the final version of the Triennial Review leaves optical links in their hands. And if UNE-P and UNE-L unbundling requirements are overturned as well, then that would be even more of an incentive.
For their part, sources at BellSouth and Verizon say the timing of the RFP had little to do with the FCC's deliberations. "Originally, the thinking was that the Triennial Review would already be out. So the timing was not related," states Peter Hill, vice president of technology planning and deployment at BellSouth. "We began this work early this year, well before we knew the relative timing of that. Originally, the FCC's order was anticipated in May, I believe."
However, Hill and Verizon's Greg Evans, vice president, services access technologies, admit that a change in the FCC's stance on optical broadband infrastructure could alter the three carriers' plans. "We're going to have to see the actual written order and understand what it means," notes Hill. "Does the written order meet the intent as expressed in the press release of the announcement of the order? We understand the order is about 800 pages. A lot of things could happen in those 800 pages."
"We've been encouraged by what we've heard from the FCC," adds Evans. "But the proof is in the pudding." While the order hadn't been issued by the time this issue went to press, Evans asserts that the move to FTTP is driven as much by business realities as regulatory initiatives. A move to fiber is necessary to meet rising bandwidth demand, deliver competitive data services, modernize the local loop, and reduce operating costs, he says. While some have suggested that the three carriers will have to sell video services over an optical infrastructure for such an investment to pay off, Evans says Verizon's FTTP business plan isn't tied to video-service delivery, aside from the types of video services it currently provides over its DSL infrastructure.
Details of the requirements contained in the RFP remain scarce—Evans describes the requirements as "myriad" in declining to enumerate them. However, the requirements have been built around G.983 PON specifications, which, Evans predicts, would also support GR-909 point-to-point architectures. The ITU Recommendation G.983 closely follows the Full-Services Access Initiative (FSAN) specifications and calls for an ATM-based PON that supports 622 Mbits/sec downstream and 155 Mbits/sec upstream, primarily for voice and data services. Video services could be accommodated on a separate wavelength. While Hill and Evans decline to directly rule out Ethernet-based PON offerings, when asked about Ethernet equipment, they each reiterated that the RFP focuses on G.983.
The three carriers have put the decision-making process on a fast track. Vendor responses were expected in the carriers' hands by the end of last month. Hill and Evans say they anticipate the carriers will create a short list of finalists this month that will be invited to provide equipment for trials at one or more of the carriers' labs. No field trials will be part of the evaluation process, they say. A final decision on suppliers should come as soon as next month, Evans and Hill believe. Each carrier will issue a separate contract to the winner or winners—most observers expect at least two suppliers will emerge victorious.
The question then becomes how aggressively the three carriers will deploy fiber in the loop. "My perspective is that this is not a precursor to mass deployment of fiber to the residence—and no one should take it for that," offers iSuppli's Rago. "It is an attempt by the carriers to drive toward standardization, very much like if you think about what happened in the early days of ADSL, when groups of OEMs and carriers pushed to get some standards developed in ADSL."
Rago expects fiber to the home deployments only in greenfield applications and possibly multiple dwelling units such as apartment buildings. "Once you get standards in place, you'll start seeing what we used to call 'fiber to the neighborhood' start to become more popular," he predicts.
While Hill declines to predict how BellSouth, which so far has limited most of its optical access infrastructure efforts to fiber to the curb, will proceed with deployment, Verizon has announced it expects to begin deployments as early as the first quarter of next year and describes both greenfield and overlay deployments as part of its roadmap. An interview with SBC to discuss its plans could not be arranged by press time.