FCC kisses fiber goodbye

Dec. 1, 1998

FCC kisses fiber goodbye

By STEPHEN N. BROWN

Extending the life of the copper loop has become a policy goal of the FCC, where two proceedings are enshrining the embedded local infra structure and marching the USA into an xDSL future.

It is rare when an alert government agency that prides itself on being technologically neutral absent-mindedly slips its own bias into the public arena. But that is exactly what the Federal Communications Commission (FCC) did in two different dockets aimed at "Fulfilling...the [broadband] needs of citizens in the 21st century." In effect, the agency dismissed fiber optics as a viable local infrastructure in the 21st century.

Docket FCC 98-187 is an ongoing Notice of Inquiry meant to gather information about the current status of the local telephone infrastructure and its potential for improvement. Perhaps the FCC was thinking out loud when it said, "To provide certain advanced services, [local infrastructure] would need...gifxpensive improvement by new last miles, probably consisting of fiber." The important but unspoken question here: Fiber optics is expensive compared to what?

In FCC Docket 98-188, where the agency requested comments on rules governing the regional Bell operating companies` offerings of so-called broadband services, the agency expressed the same opinion again, saying, "Constructing fiber-based digital loop carrier systems to overcome loop length difficulties can be expensive." But again there was no followup question: Expensive compared to what?

No time to play dead

The commission`s statements are not fair-minded for two reasons: Except for fiber optics, no other product, commodity, or technology was labeled expensive; and the statements represent conclusions made without any record supporting them--as if the conclusion were made first and then followed by a search for supporting facts. This perception does not bode well for fiber-optic manufacturers. If the nation`s top communications regulatory authority labels fiber as "expensive" without providing supporting documentation and without saying any other technology is "expensive," then the fiber-optic industry should be worried about its image and should react by setting the record straight. The alternative is to roll over and play dead.

From time to time, this column has pointed out the biases against fiber optics that prevail in Washington, D.C., where one legislator described a fiber infrastructure as a "golden calf" and where a major consumer group panned fiber-optic networks by saying that ISDN would "deliver 80% of the capabilities of a ubiquitous broadband fiber-optic network...at 10% of the cost." Apparently these perceptions live on. Thus fiber`s penetration of the loop moves forward at a glacier-like pace, suppressing any rapid expansion of sales. For example, Corning has cut back its building schedule at its Concord, NC, plant that is meant to double the company`s capacity to produce newer-technology fiber such as LEAF. The original target completion date was 1998 but that has slipped back to 2001.

More slippage is likely if the FCC`s technology bias goes unchallenged, because there is a whole 21st-century economy waiting to grow with a new communications infrastructure. The fiber industry should grab that future for itself and forget about showing deference to the ancient copper plant. The FCC knows how old the nation`s telephone plant really is. In docket FCC 98-188, Commissioner Susan Ness issued a statement praising the Telecom Act of 1996 and saying it "is rooted...in a recognition that the networks constructed over the past century by the incumbent LECs need to be `opened up` to enable competitive entry."

If the network was built over the past century, isn`t it reasonable for the FCC to consider replacing it? Apparently not. Even state utility commissions recognize the FCC policy is an attempt to stretch the life of the copper infrastructure by helping the xDSL technology sector organize itself.

In a joint written statement, the Indiana Utility Regulatory Commission and the Wisconsin Public Service Commission Staff stated, "The regulatory regime proposed by the FCC...is geared at accelerating the deployment of wireline broadband services, notably xDSL, which relies on the incumbent [phone companies`] investment in the copper loop." The joint statement also suggests the FCC`s policy will result in higher prices for local telephone customers: "We believe that the FCC and state commissions may be left with little choice but to raise rates under their respective jurisdictions."

Naturally, the FCC`s xDSL push is a boon to vendors. One manufacturer, seeing a huge market for its products, told the FCC it "should be aware in crafting such rules that efficiently designed technologies, such as [the vendor`s]...can be integrated into the existing...network" and that the company`s technology "is available for large-scale deployment today" and "the deployment of xDSL should not be impeded."

However, xDSL technology may not deliver much to the public. Paradyne Corp. told the FCC, "The physical constraints of the loop plant can never preclude the interference of one xDSL technology upon itself or other xDSL technologies....The key is to minimize interference." But minimization of interference may not be easy because there are no standards. The Association for Local Telephone Services (ALTS) told the FCC, "Any interference solution can only be determined in the field, not on the laboratory bench....There is little experience with field deployment of DSL....Most DSL technologies are proprietary....These issues are in the hands of...vendors, not standards bodies."

The technical deficiencies of xDSL suggest it will not be universal, as telephone service is today. The technology is feasible for a limited number of telephone customers--anywhere from a low of 20% to a high of 80%, depending on the estimate`s source. But these coverage levels may shrink further because different forms of xDSL technology can be offered by different providers.

Nothing in federal law or in the FCC`s rules says that the incumbent phone companies and their local competitors have to use the same type of xDSL technology to provide services. There is an obvious need for the incumbents and their competitors to coordinate, but competitors do not want the incumbents controlling the coordination. AT&T told the FCC, "Pending the development of industry standards, the Commission should not allow the [incumbents] unfettered control" over coordination decisions.

Considering all the time, money, and disagreement being put into xDSL technology by the private sector and the FCC, and the likelihood that xDSL coverage will be far less than universal, why is a rebuild of the local infrastructure being ruled out? Because there is a consensus that a rebuild is too expensive, no matter when and no matter where it is done.

Several parties in the FCC proceedings have taken that position. MindSpring, a major Internet service provider, told the FCC, "We as a society face a choice. Either we rip up neighborhoods to install a new set of wires every time we want to add a new competitor to the market or we find an efficient way to share the wires that are in place. Just to state the point is to answer it." ALTS likened new technology to the ice-cream special of the day: "The technology that is touted this year may end up either preempted by an entirely different or new technology, not of use or interest to consumers, or too difficult to implement." Level 3 said, "Bypass of the local loop is not feasible in the short to medium term."

Time for a new rallying cry

Many other public statements by many other companies make the same point. Thus, the FCC`s technology bias is an example of how a government agency embraces consensus thinking, perhaps without being aware of it. Although the agency began its proceedings saying it was concerned "about the longer-term future," the future can`t escape the present. On one hand, incremental improvements to the loop promise higher prices and far less than universal service; on the other hand, it is too expensive to replace the loop with a fiber link. There is an obvious way out of this trap: The fiber-optics industry has to show that the loop can be replaced cost-effectively with a fiber loop and much better services. The industry has everything to gain and nothing to lose by starting this journey. q

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