Will Verizon Offer A Fiber To The Node Product In 2009?

Yesterday, AT&T president and chief executive of telecom operations John Stankey announced the company was on track to add its one millionth U-Verse TV subscriber sometime next week. Stankey also announced plans to make the service available to 17 million homes by the end of 2009. AT&T's U-verse Fiber To The Node (FTTN) implementation involves running fiber out to a neighborhood node and then completing the connection over a copper connection to provide voice, video and data services.

AT&T has spent considerably to develop FTTN technology and along the way has had a few false starts. Launched in 2006, Project Lightspeed (as U-verse was first called) was a $4.6 billion investment aimed to reach 19 million homes in 13 US states by 2008 using a combination of fiber optic and copper network technologies.

FTTN relies heavily on set-top box techology - you can't get the same amount of bandwidth out of a piece of copper that you can out of a piece of fiber. Bandwidth limitations are made up for using caching. Early boxes had low end 386-based processors and limited memory and storage capacity. Trials in Europe were not favorable and the company had to go back to the drawing board a few times. Costs rose - in May 2007 AT&T announced the capital expenditure of Project Lightspeed would increase from $4.6B to $6.5B and the number of homes passed would decrease to 18 million; down a million homes.

Fast forward to today - the company hung in there with the technology it looks like the bugs have been worked and they've got it scaling!

Around the same time in 2006 and in technical competition (not market since the telcom footprints do not overlap) Verizon decided to go with a Fiber To The Home (FTTH) implementation - what we know as FiOS. FiOS runs an optical fiber directly to a subscribers home to deliver voice, video and data services and I've seen total Verizon investment estimates for the product anywhere between $18 and $23 billion. Initial Verizon plans were to pass 3 million homes per year starting in 2006 until they reached approximately 60 percent of their 2006 customer footprint. Estimates have changed slightly with the Verizon sell-off of Maine, New Hampshire and Vermont to Fairpoint Communications but you get the idea.

Why only 60% of the Verizon customer footprint? It's too expensive to run fiber to every home. I'm a perfect example - I live in a rural small town in Western Massachusetts. My house is on a private 1.5 mile road with copper from Verizon buried down the road along with another 300 plus feet buried under my driveway. There are only 7 homes on my road, all with at least 150 feet of buried copper between the road and the house. I'm guessing but I would say my neighborhood is pretty low on the FiOS list. As an alternative, Verizon is offering me ADSL but..... I'd like a little more data bandwidth and what about video services - you can't do that over ADSL.

My only real option - cable service from Comcast (which I love and probably not give up even if I had a choice). Verizon does not have a voice/video/data product they can even try to sell me unless I go with a Verizon/DirecTV option and put a satellite dish on my house. I don't really want to do that.

Back in June of this year I wrote an entry titled Will Verizon Put More Gas In The Fiber Engine? In that piece I questioned whether Verizon was considering FTTN technology to reach out into the more difficult areas and better compete with the cable companies and their aggressive DOCSIS 3.0 rollout plans. With this recent announcement by AT&T showing FTTN technology works and scales I don't see how Verizon can ignore an FTTN option in neighborhoods like mine.

I'm gonna stick my neck out on this one with my first prediction for 2009 - Verizon will announce an FTTN product sometime next year.

Ethernet To The Home Over Fiber - A PON Alternative?

Passive Optical Networks (PONs) have been getting a lot of attention here in the United States as companies like Verizon move to deliver voice, video and data services over optical fiber to homes. Mike Q and I even did a podcast detailing Verizon's Fiber to the Home (FTTH) PON configuration last May. In the United States we seem to believe PON technology is the best way to deliver signals over fiber to residences. This is not the case in Europe though. Lightwave.com has just posted a very interesting piece titled Active Ethernet FTTH offers PON alternative.

According to Lightwave.com, hundreds of networks around the world—and particularly in Europe—use Ethernet switches to deliver high-speed voice, data, and video services to single-family homes and apartment complexes. One of the reasons, according to Lightwave, it has not caught on is because proponents of the technology have not come up with a universal name for the technology. One name that has taken limited hold is Active Ethernet, which clearly differentiates itself from passive PON technology. This term works for some but not others - according to Lightwave.com, not all implementations place the switches in the field; the Ethernet equipment can reside in the central office (CO), with a fiber running directly from the CO to each subscriber.

As a result, some companies, like Alcatel-Lucent use the term Active Ethernet to describe implementations where there are Ethernet switches in the field and Point-to-Point to describe an implementation that is directly connected over fiber without switches in the field. Other companies are using other terms - Cisco just uses Ethernet FTTH for all Ethernet over fiber configurations.

I've always been a fan of Ethernet and have believed most connections would eventually become Ethernet. It scales well and is easy to implement, configure and maintain.What's likely hurt it most in this country as a long distance option are switch power needs in the field for active implementations and the cost of direct connecting a piece of fiber from a home directly to a switch in the CO. For these reasons I suspect companies like Verizon have gone with a PON delivery configuration. But, is this only temporary? Cost differences between Ethernet and PON actually shrink as bandwidth per subscriber increases - here's more from the Lightwave.com piece:

Bandwidth levels of 20 Mbits/sec and greater generally require that the number of splits per PON shrink. This translates into more fibers in the field and more ports in the CO to service the same number of subscribers, making PON infrastructures look more like point-to-point when it comes to fibers deployed and CO ports.

Here's an interesting quote from Ian Hood, senior marketing manager at Cisco:

"What I see in the marketplace is that providers are putting in PON for I'll call it the low end of the market—best effort, small customers, small businesses, the less than 15 Mbits per customer kind of speeds. For their high-value customers and some of their businesses, they're going with an Ethernet solution, be it building-oriented or dedicated from the CO to get beyond the 25-Mbit realm. So you're seeing a hybrid approach basically in a lot of the new large city deployments."

Will PONs go the route of DSL in the United States and be looked back on some day as a temporary technology? Perhaps - the one big advantage Ethernet currently has over PON is it has the potential to deliver the highest potential bandwidth per subscriber. Here's another quote from Hood:

"If we can get the optics costs down and embed them along with the multiplexer into our Ethernet switches, then you can go beyond 100 megabits to gigabits to whatever you can run on a lambda at that kind of cost for the next evolution of speed."

Which technology will eventually dominate? Will another alternative to PON and Ethernet come along that is superior to both? Time will tell. Be sure to read the entire Lightwave.com piece linked here.

Will Verizon Put More Gas In The Fiber Engine?

Reuters posted an interesting article yesterday titled Verizon mulls alternatives to all-fiber FiOS. The article describes how Verizon will continue to roll FiOS out through 2010 passing 18 million customers at a cost of over $20 billion. The article also hints at some plans for beyond 2010.

In an interview yesterday at the NXTcomm telecommunications industry conference in Las Vegas, Verizon Chief Technology Officer Mark Wegleitner told Reuters the company is looking at continued expansion after 2010. Here’s a few quotes from the article:

Wegleitner said "What we'd look for is another approach to Fiber to the Premise (FTTP)."

He sees room to expand FiOS after 2010 to another 18 million users, but shifting away from FTTP could help expand high-speed Internet and video into sparsely populated areas where it is too expensive to build out an all-fiber network.

"I'm not sure what the trigger point would be. There still could be more gas in the engine for FTTP," he said.

I’ve always found the 18 million customer number disturbing because it only covers about 60% of Verizon’s original footprint. With Verizon's sell-off of Maine, New Hampshire and Vermont to Fairpoint Communications the 60% figure goes up a little bit but not by much.

It looks like the company may be considering Fiber to the Node (FTTN) technology to reach out into the more difficult areas. FiOS is selling extremely well so it makes sense to expand beyond the original plan. I also suspect Verizon is feeling some pressure from the cable companies and their aggressive DOCSIS 3.0 rollout plans.

Passive Optical Networks (PONs) Podcast

Mike Q and I recorded "Passive Optical Networks (PONs)" last night. Below are the show note questions. You can listen directly by turning up your speakers and clicking here.

If you have iTunes installed you can get this one, listen to others, and subscribe to our podcasts by following this link. If you don't have iTunes and want to listen to other podcasts and read full sets of shownotes using your web browser, follow this link.
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Intro: In this podcast we take a look at modern fiber delivery systems.

Podcast Questions:

Mike: Passive Optical Networks use Fiber – could you talk a little but about Fiber to the Premise or Home (FTTP or H)

Mike: So what exactly is a Fiber P2P Network?

Mike: OK, so what’s a PON?

Mike: What are the PON Architectural Choices?

Mike: What is Centralized Splitting?

Mike: What is Distributed/Cascaded Splitting?

Mike: What are some of the Protocols and Standards used with PONs?

Mike: What are the Outside Plant Components?

Mike: What’s an ONT?

Mike: Are Technicians typically terminating fiber in the field?

Component and Technology Pictures:

Verizon PON FiOS Splitter: 1 Fiber In -> 32 Fibers Out!

Verizon PON FiOS Splitter with Cover Removed: Optical Splitting is done by fusing fibers

Verizon PON FiOS 1->32 Splitter Detail

Verizon PON FiOS 1->32 Fiber Detail - Note Fibers Are Numbered

Verizon FiOS CO Hindged Panel Showing WDM Modules

Verizon FiOS Fiber Distribution Hub (FDH)

Verizon FiOS Optical Network Terminal (ONT) - Cover Closed

Verizon FiOS Optical Network Terminal (ONT) - Cover Open

Reference List:

FiOS: Our Future
James Armstrong, Chris Cote, Stan McCoy, James Todd
STCC Verizon NextStep Class of 2008

Passive Optical Network Splitter
Lawrence Graham, Mike Thompson, Jodi Lewandowski, Jeremy Dillensneider, Stephen Booher
STCC Verizon NextStep Class of 2006

FTTH Explained: Delivering efficient customer bandwidth and enhanced services
http://www.iec.org/online/tutorials/fiber_home/
Michael Kunigonis, Product Line Manager: Access Corning Cable Systems

U.S. Fiber to the Home (FTTH) Ranking = Eighth in World

Last week, the FTTH Council North America, Europe and Asia-Pacific released a world rankings document titled Fiber to the Home Deployment Spreads Globally As More Economies Show Market Growth.
The report lists 14 economies in the world that currently have more than 1 percent of households directly into fiber networks. According to the release:

The global ranking follows the unified definition of FTTH terms announced by the three councils last year, and which has formed the basis for recent market research by each council. For completeness and accuracy the ranking includes both FTTH and FTTB (fiber-to-the-building) figures, while copper-based broadband access technologies (DSL, FTT-Curb, FTT-Node) are not included.

The United States has doubled it's penetration rate to 2.3 percent over the past year, moving us up three places to eighth position. This doubling is no doubt based on the Verizon FiOS rollout in this country. [Click diagram to right for larger view]

Joe Savage, President of the FTTH Council North America, is quoted as follows:

“We’re delighted to see the U.S. moving up the global ranking, indicating a good beginning is underway. FTTH leadership, demonstrated by those leading countries, shows full national deployment is achievable. The future belongs to those countries that satisfy the broadband consumer’s need for speed. Our members – the FTTH equipment vendors and the service providers – are ready to help make it happen on a wide scale across North America.”

Here's a quote from Schoichi Hanatani, President of the FTTH Council Asia-Pacific:

"It is no accident that Asia-Pac continues to be the fastest growing region for FTTH in the world, with more subscribers connected on fiber than all other regions combined. The rollout of FTTH has been encouraged by forward-looking governments and regulators in the Asia-Pac region for several years now. They understand that FTTH is a key strategic national infrastructure."

Read the full release and get more information on the FTTH Council web site at www.ftthcouncil.org

Google's Trans-Pacific Fiber Optic Cable Project

Last week, on February 26, Google and 5 other international companies announced the Unity consortium. This group has agreed to run a 5 pair, 10,000 kilometer fiber optic communications cable connecting the United States and Japan. According to a Google press release, each fiber pair will be capable of handling up to 960 Gigabits pers second (Gbps) and the cable system will allow expansion up to eight fiber pairs.

At 5 pairs: (5 pairs)*(960 Gbps/pair) = (5 pairs)*(960x10⁹ bps) = 4.8 x 10¹² bps = 4.8 Terabits per second (Tbps)

At 8 pairs: (8 pairs)*(960 Gbps/pair) = (8 pairs)*(960x10⁹ bps) = 7.68 x 10¹² bps = 7.68 Terabits per second (Tbps)

The Unity consortium companies are:

Bharti Airtel - India's leading integrated telecommunications services provider.

Global Transit - A South Asian IP Transit network provider

Google - You know who they are!

KDDI - A Japanese information and communications company offering all communications services, from fixed to mobile.

Pacnet - An Asian company that owns and operates EAC-C2C, Asia's largest privately-owned submarine cable network at 36,800 km with design capacity of 10.24 Tbps.

SingTel - Asia's leading communications group providing a portfolio of services including voice and data services over fixed, wireless and Internet platforms.

By partnering with the providers, Google will be extending it's reach into the Asian markets - combined Bharti Airtel and SingTel have over 232 million mobile and landline customers. In addition, the system will connect into other Asian cable systems and reach more customers. Here's more from the google press release:

According to the TeleGeography Global Bandwidth Report, 2007, Trans-Pacific bandwidth demand has grown at a compounded annual growth rate (CAGR) of 63.7 percent between 2002 and 2007. It is expected to continue to grow strongly from 2008 to 2013, with total demand for capacity doubling roughly every two years.

It's interesting to see competing Asian market providers partnering in a system within a system, with each having ownership and management of individual fiber pairs - a testament to the power and influence Google has.

NEC Corporation and Tyco Telecommunications will build and install the system with completion by the first quarter of 2010.

Verizon Demonstrates 100 Gbps FiOS TV Connection Between Tampa and Miami

In a press release today Verizon announced they have completed a 100 Gbps optical communications test between Tampa and Miami, FL. The two cities are 312 miles apart. Here's a couple of quotes from the press release:

Verizon has successfully concluded the industry's first field test of 100 gigabits per second (Gbps) optical transmission, on a live, in-service 312-mile (504 kilometer) network route between Tampa, Fla., and Miami.

The test, which utilized a live video feed from Verizon's national FiOS TV network as the "payload," was successfully completed Friday (Nov. 16). The 100 Gbps transmission was conducted on a Verizon Business ultra long-haul optical system carrying other live traffic at 10 Gbps. The test demonstrated that by deploying advanced electronics, an existing network system can easily and quickly be upgraded to 100Gbps.

The test was done using existing fiber that had been installed for 10 Gbps service. Here's a couple more quotes from the press release:

Unlike other trials that used 10 separate 10 Gbps wavelengths to carry 100 Gbps, the Verizon test utilized a 100 Gbps signal on a single wavelength, demonstrating Verizon's drive to promote "true" 100 Gbps in a serial fashion on just one transmission wavelength.

Like the equipment in the company's 40 Gbps trial in June 2004, the 100 Gbps equipment used in the field trial was implemented with a "plug and play" approach. This is a key objective for future commercial implementation, and means the technology was used without any changes to the fiber, amplifiers and other embedded equipment.

Amazing bandwidth obtained using existing fiber - the trial only swapped electronics using, according to the press release, Alcatel-Lucent's 1625 LambdaXtreme Transport system.

Internet Disruptions: Skype, Microsoft and Shotguns

On Thursday, August 16, Skype users experienced a critical disruption. The disruption was the result of a massive restart of Skype user computers around the world within a very short period of time. The reboot was the result of a series of Microsoft update patches that required a reboot. According to the Skype press release:

"The high number of restarts affected Skype’s network resources. This caused a flood of log-in requests, which, combined with the lack of peer-to-peer network resources, prompted a chain reaction that had a critical impact".

"Normally Skype’s peer-to-peer network has an inbuilt ability to self-heal, however, this event revealed a previously unseen software bug within the network resource allocation algorithm which prevented the self-healing function from working quickly. Regrettably, as a result of this disruption, Skype was unavailable to the majority of its users for approximately two days".

The press release continues:

"The issue has now been identified explicitly within Skype. We can confirm categorically that no malicious activities were attributed or that our users’ security was not, at any point, at risk.

This disruption was unprecedented in terms of its impact and scope. We would like to point out that very few technologies or communications networks today are guaranteed to operate without interruptions".

I've been away on vacation and have not been as connected as I usually am - as a result the outage did not really affect me. I do use Skype frequently and if I had been in the office it would have caused some problems. I find it interesting, and a little disturbing, that one of the first things Skype clarifies in the press release is the fact that the outage was not caused by any "malicious activities".

On Monday there was another incident that caught my attention - someone has been shooting (with a gun) fiber optic cables in the Cleveland area. As a result, Internet service providers in the entire country experienced a slowdown. You can read the Network World gunfire piece here. Here's a couple of quotes from the piece:

TeliaSonera AB, which lost the northern leg of its U.S. network to the cut, said that the outage began around 7 p.m. Pacific Time on Sunday night. When technicians pulled up the affected cable, it appeared to have been shot. "Somebody had been shooting with a gun or a shotgun into the cable," said Anders Olausson, a TeliaSonera spokesman.

The company declined to name the service provider whose lines had been cut, but a source familiar with the situation said the lines are owned by Level 3 Communications Inc.

Within the last week we've had both upper layer and physical layer major Internet disruptions. It certainly makes me think twice about our communications vulnerabilities.

Goodbye Copper?

There’s been some recent press about Verizon and their FIOS product installation. FIOS is a fiber optic network service that delivers voice, video and data services. You may also see it referred to as a Fiber to the Premises (FTTP) or Fiber to the Home (FTTH) service that Verizon is selling and installing in select markets in 16 different states.

Most who have the service installed are extremely happy with the bandwidth and cost when compared to lower bandwidth DSL and Cable Modem services. The product has become so popular that it is even being used as a selling point by real estate agents when marketing homes.

A few are complaining though. It appears Verizon, when installing the FIOS service, is cutting out the existing copper lines leaving the customer with only one option – fiber and FIOS. There are a couple of good reasons from a business perspective for Verizon to do this. The first is the existing copper wiring is old and requires a significant amount of maintenance – Verizon spends hundreds of millions of dollars a year just maintaining the existing “copper plant” and it makes sense to remove it when it is replaced. The second reason is the Telecommunications Act of 1996 which requires the telephone companies (like Verizon) share their existing copper lines with competitors. There is no current legal requirement for Verizon to share new fiber optic lines with anyone.

In fairness to Verizon, there is a three step notification process for people who sign up for the FIOS service. According to the International Herald Tribune, customers are told by the Verizon sales person, it is indicated in the sales contract and the customer is told by the technician that the copper will be cut out. Currently, Verizon is publicly stating they will replace removed copper if a FIOS customer wished to revert back to copper service.

Also according to the International Herald Tribune, Verizon has filed more than 100 notices with the Federal Communications Commission to retire portions of copper throughout its network.

I can understand the customer concerns about lack of choice and some technical issues like battery back-up and also Verizon’s concerns about having to maintain two separate networks.