FTTP: The RBOC's Light Sword?

"On May 29th of 2003, the three largest RBOCs (Bell South, SBC, and Verizon) announced that they had adopted a common set of technical specifications for the delivery of fiber-to-the-premise (FTTP). In other times, this announcement would likely be viewed by most with a big yawn - just another technical standardization. However, in today’s times, this was the biggest news in the telecommunications world - perhaps the biggest in years. The initial announcement was followed by a joint RFP issued in June 2003 to selected vendors, for the FTTP equipment. Responses and vendor selections are scheduled for the third quarter of 2003, with initial deployments to begin in 2004.

These three RBOCs serve 136,000,000 of the 187,000,000 access lines (73%) in the US. This is the base reason for the excitement. These three companies are the powerhouses of the telecom world. Their 2002 capital expenditures were 76% of the total by major telephone companies, and over 46% of all capital spent in 2002 by cable companies, IXCs and major telcos! Clearly, these three companies have the financial power to rule the equipment markets.

The equipment vendors have looked at the potential size of a project to bring fiber near the customers of these three companies, and they visualize a return to the go-go days of the late 1990s telecom market. At around $1500 capital cost per installed fiber line, it is easy to see how a program that involves over 100,000,000 lines could easily drive a return to profitability for many equipment vendors.

The RFP has been held very tightly, but a few bits of information have been released. The author of this report has managed to obtain interviews (on a ‘no direct quotes’ basis) with several of the potential vendors and principles involved. The major item disclosed is that the RFP calls for a solution based on ITU standard G.983. This standard provides for a passive optical network (PON) using ATM transmission. Details of deployment assumptions from the RFP (if included) have not been released. "

THE LIGHTWAVE SERIES OF REPORTS

INTRODUCTION

THE COMPETITIVE LANDSCAPE - THREATS IN EVERY DIRECTION

RBOCs vs. the CLECs (IXCs)