FTTXcellence Award winner reduces FTTH costs
by Stephen Hardy
Like a lot of his peers, Jim Hansen, senior vice president, network services, of EMBARQ (www.embarq.com), began to experiment with fiber-to-the-home networks for greenfield applications several years ago. However, he began to discover that his networks differed from those of other carriers—and not in a good way.
"While some of my peers were claiming they had seen copper and fiber [deployment] prices equalize three or four years ago, I was still seeing quite a bit of a premium to go fiber to the home," Hansen reports.
Determined to discover why his installation costs were so high, Hansen initiated a review program called Project Greenlight. The effectiveness of that program, and the resulting boost it gave to EMBARQ's FTTH initiatives, earned Hansen the 2008 FTTXcellence Award.
The FTTXcellence Award, co-sponsored by Corning Inc. and Lightwave, honors an individual who has made a significant contribution toward the use of optical technology in North American access networks. Each year's winner receives a Steuben glass statue to symbolize his or her achievement; One Economy, a non-profit organization dedicated to bringing the benefits of broadband technology to low-income citizens, receives a $7,500 contribution in the winner's name as well. Corning and Lightwave presented this year's award to Hansen on September 23 at the FTTH Conference and Exhibition in Nashville, TN.
Hansen moved from AT&T to what is now EMBARQ in 1990, when the company operated as United Telephone. As the carrier grew to become Sprint, then spun out under its current name (and will now merge with CenturyTel), Hansen's responsibilities expanded. He is now responsible for both planning and operation of the carrier's networks, which extends across 18 states. His department includes approximately 8,000 employees and operates with a combined capital and operations budget of about $1.6 billion.
Over the years, Hansen developed an appreciation for the potential of optical communications technology. "It's what you want to do because of the future-proof of the bandwidth and then the cost savings with lower maintenance," he says.
Thus, when EMBARQ began to graduate from fiber to the curb to FTTH, Hansen found himself at a loss when his deployments failed to meet expectations. "I was in this dilemma," he recalls. "From a technologist's standpoint, the answer is fiber. There's no doubt about it: Fiber and optics is the way to go. But from a cost perspective, I just wasn't seeing what I needed to see from a businessman's standpoint."
And that's when Project Greenlight began. Hansen, with the help of his fiber supplier, Corning Cable Systems, reviewed his operating procedures in hopes of discovering inefficiencies he could correct. One area that demanded immediate improvement was the cost of splicing. When Hansen first negotiated labor contracts that included splicing, EMBARQ's fiber deployment volumes were relatively low. He was therefore willing to pay a premium for splicing—a decision that backfired when his FTTH projects expanded.
"We just did not have good volume splice contracts in place," Hansen concedes. "We were paying people a premium and they kept that premium even as the volumes went up and we should have been seeing economies of scale. We just weren't seeing it."
Similar reviews of other aspects of his FTTH deployment strategy—what Hansen calls "piece parts"—uncovered additional opportunities for cost reduction. Through a combination of renegotiating contracts with existing suppliers and bringing in new partners (several of which belong to Corning's Evolant alliance), Hansen finally began to see the kind of deployment economics that made the business case for FTTH successful.
EMBARQ employs a PON architecture in its deployments. The carrier began with BPON, supplied by Optical Solutions Inc. until it was acquired by Calix (www.calix.com). Hansen stayed with Calix when he graduated to GPON.
The carrier offers voice, video, and data services to its residential subscribers, although the video portion comes in the form of a partnership with Dish Networks. "We've got a great video business case—it just doesn't prove out," Hansen says of providing facilities-based video services via FTTH. That dynamic may change with the merger, Hansen notes, as CenturyTel has been trialing IPTV services.
While CenturyTel has favored a fiber-to-the-node approach to optical access technology, Hansen believes EMBARQ's FTTH activities will continue. "One of the things we've been seeing is that we've also become quite keen on the maintenance savings fiber brings," he says. "You truly can see your trouble rates spiral down where you put in this technology."
But as far as expanding either the use of FTTH or the services provided over such networks, "the big thing is going to have to be bigger revenue sources, which is one of the reasons that we're excited about our merger with Century," Hansen says.
Regardless of how rapidly Hansen's FTTH footprint expands—and he concedes that the downturn in the economy has slowed optical access growth—the lessons learned from Project Greenlight will continue to serve him well. "In order to make it all work, you just can't keep your copper processes in place and your copper methodologies," he concludes. "You have to really look at a whole new way of engineering and deploying the network."