Posted on: Saturday, October 23, 2004
Dawning of the fiber-optic era?
BY Bruce Meyerson
Associated Press
NEW YORK — For at least a decade, phone companies have been promising to rewire America with fiber-optic cables. Now, with a romp of regulatory victories in hand, the regional Bells say they're free to make good on that ambitious plan to bring lightning-fast Web and TV services to all the nation's homes.
Jeff Roberson | Associated Press Some analysts wonder whether the companies can even afford the tens of billions of dollars it will cost to replace the copper in their networks. Further, the Bells will need to secure good-enough terms on TV programming and lure enough customers from cable and satellite operators to justify the investment.
Skeptics also worry that government regulation may yet be used by the Bells as an excuse to stall.
But with cable TV and cellular companies offering their own phone and broadband services, the Bells maintain it's out with the copper, and in with the fiber.
Verizon announced Thursday that six more communities in three states are being offered its new fiber-based Internet service, first introduced to a Dallas suburb in August. Verizon also said fiber is now being installed in communities encompassing about 700,000 homes and businesses in nine states. Verizon said it is hiring 5,000 to 7,000 people for the job and negotiating with content providers to introduce TV and video services sometime next year.
A day earlier, SBC said it had placed a $1.7 billion order with Alcatel SA of France for network equipment and video system integration services.
Those announcements came about a week after the Bells responded to favorable rulings by the Federal Communications Commission — including one widely reported decision that was only announced yesterday — by stepping up their commitment to fiber.
SBC said its deployment, budgeted at $4 billion to $6 billion, will deliver advanced services to 18 million households within three years rather than five as previously announced. BellSouth, which leads its peers with fiber already strung to the curb at 1.1 million homes, said it is increasing next year's deployment by 40 percent to about 180,000 homes.
Verizon stood by its projection to reach about 1 million homes at a cost of $800 million and another 2 million homes in 2005, though evidence suggests it, too, has picked up the pace.
Only Verizon's blueprint actually calls for the fiber to stretch right into the home. The plan at BellSouth is to bring fiber to the curb, or within about 500 feet of most homes, and then complete the connection over the existing copper lines. SBC wants to extend fiber to the neighborhood, or within about 5,000 feet of homes, before handing off to copper.
Verizon's approach is by far the most expensive — costs may range from $800 to $2,500 per home — but could theoretically deliver hundreds or thousands of times the amount of bandwidth allowed by today's copper wires.
Yet while all three companies are definitely digging up more cables and restringing more telephone poles than ever before, doubts remain.
To begin with, if the Democrats manage to capture the White House in November, the FCC might tilt back toward forcing competition by requiring the Bells to lease their local lines to rivals such as AT&T Corp. at low government-set rates.
In that case, the Bells would likely slam the brakes on their investment. The regulatory tide turned in March with a court decision that threw out the line-sharing process. The FCC has since voted three times to protect fiber deployment from sharing obligations.
In recent days, the nation's three biggest local phone companies announced plans to expand their fiber deployments, an endeavor that may take years to pay off for Verizon Communications Inc., SBC Communications Inc. and Bell South Corp.
Vinnie Sinatra, a fiber crew member with SBC Communications, uses a machine to push fiber-optic cable into an underground conduit in Buffalo Grove, Ill. Phone companies have been promising to rewire America with fiber-optic cables for at least a decade. With recent regulatory victories in hand, the regional Bells say they're now free to make good on that ambition.
