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Fiber, fiber all the way is not so easy

Telecommunications Online
11-28-07, by Sean Buckley

Hidden challenges lurk around every corner

The recent demise of Optical Entertainment Network (OEN) and its FISION video business should serve as a cautionary tale for any competitive service provider considering an all FTTH-based business. OEN had high hopes with plans to add 15,000 new subscribers to its network by the end of this year.

Overall, I found the package of 400 IPTV channels and its more recently launched symmetric, 20 Mbps, dedicated Internet connections to be competitive. (see NXTcomm: OEN�s Need for Speed)

Initially targeting the Houston, Texas area, OEN was building an all-IP, all-fiber network whose differentiator was the network�s multicast nature that enabled bandwidth to be allocated for services on an as-needed basis.

Like other competitive providers building Greenfield FTTH networks, OEN�s challenge lies in not only buying equipment but also in the construction costs that go along with building and expanding a fiber network. What�s more, OEN had to compete with two telecom behemoths (AT&T and Verizon) and cable (Comcast and Time Warner) that have deep pockets for the subscriber dollar.

Not surprisingly, customer comments accompanying an online Houston Chronicle article about OEN�s end were irate.

One subscriber�s comment might provide a lesson for anyone considering launching a similar service: �The service from the company was also way subpar. Let this be a lesson to the next fiber company looking to get into our homes: Don�t do what FISION did!�

OEN is not the first competitive service provider to see its FTTH ambitions fail when the money got tight, though. Daniel Island Media Company, an early broadband passive optical network (BPON) FTTH provider we profiled in November 2001, was taken over by independent ILEC Home Telephone Co., after struggling to get the network built.

Still, there are other promising alternative FTTH players.

Along with Home Telephone Co., which is running the Daniel Island FTTH network as one of its three businesses, other independent ILEC and Greenfield operators such as SureWest and Greenfield Communications are making positive strides with FTTH.

Since snapping up the former WinFirst assets for practically pennies, SureWest continues to ramp up its FTTH network with growing demand from new customers to deliver IPTV and a 50 Mbps Internet service that�s bundled with voice, video and wireless.

Meanwhile, Greenfield Communications, born out of the utility construction world, is working selectively with developers in California and Arizona to add FTTH as an added amenity.

Second network challenge
Even for the most successful FTTH providers, there are unavoidable challenges.

Once the FTTH access network is built, the home network, or what Telecommunications� Senior Editor Jim Barthold calls �the second network�s� wiring is the more painful problem.

I discovered the second network challenge first hand through my parents, who recently subscribed to Verizon�s FiOS service when it became available in the Gardens section of Bedford, Mass. Granted, they are not the most tech savvy folks: They got an answering machine only a few years ago.

Their desire to subscribe to FiOS was based on the convenience of one bill for voice, video and data (currently $94.99 for the baseline triple- play package), not so much optical technology.

Aside from the bevy of nomenclature to learn (fiber optics, IP or optical network terminals), the most daunting issue to them was the time it took to get the service installed and working.

Although Verizon�s first instinct is to leverage a home�s existing coax via multimedia over coax alliance (MoCA), many of the circa 1950s homes built in that neighborhood consist of a rat�s nest of aging coax and 50+- year-old phone wiring.

Thus, Verizon had to run Category-5 cable throughout the house to get the signal up and running.

So, while it�s unclear when Verizon will bring FiOS to Dracut, Mass.,�a town where new large housing developments continue to eat away at the once rural town and consequently a good fit for FTTH�I know when FTTH comes to my neighborhood I will be prepare for the unexpected.