Do you have the bandwidth to attract and keep residents? Broadband at the speed of fiber-optic light. Streaming video and interactive gaming that defy description. The coolest programming, and more of it, on the purity of HDTV. Pure joy. This is what today’s residents demand. And this is what you can give them with Verizon FiOS®, the most advanced TV, Internet and phone service available. Set up by our own experts, who will create a custom installation plan just for you. Verizon FiOS. It’s a clear signal to today’s residents that you get it. Call 888.376.3608 or go to verizon.com/communities to learn more.

Verizon FiOS tv | internet | phone verizon.com/communities 888.376.3608 FiOS available in select areas only. Battery backup for standard fiber-based voice service and E911 (but not VoIP) for up to 8 hours. ©2009 Verizon. All rights reserved.

Official Corporate Host of the 2010 Broadband Properties Summit

Everyone benefits when you’re wired for DIRECTV. Whether you’re a property owner or a resident, find out why over 50 million Americans enjoy DIRECTV every day! Why OWNERS want DIRECTV

Why RESIDENTS want DIRECTV

>> Single Dish Solution: All residents can access DIRECTV programming via a centralized dish system

>> No Contract Required: Switching is quick and easy – Ask how!

>> Customizable Programming Options: Select programming that meets the needs of your property, including bulk options >> Local Service Network: Residents get fast and free installation and quick customer service from our knowledgeable local dealer network >> The Highest Customer Satisfaction Ratings: DIRECTV has had higher customer satisfaction ratings than cable for nine years running*

>> FREE & FAST Standard Professional Installation >> Nobody offers more HD than DIRECTV: Plus, residents can enjoy the latest in 1080p programming and Dolby® Digital 5.1 surround sound – same as Blu-ray discs ††

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DIRECTV is proud to be one of Broadband Properties Top 100 Companies to do business with for 2009.^

For more information on why your building should have DIRECTV, call 888-342-7288. *Among the largest national cable & satellite TV providers. 2009 American Customer Satisfaction Index, University of Michigan Business School. †To access DIRECTV HD programming, customer must reside in a MFH2™ or MFH3™ capable property. Plus, an HD Access fee ($10/mo.), HD Receiver (H20, HR20 or greater), HD television equipment, and a qualifying programming package are required. Number of HD channels varies by package. ††“Dolby” and the double-D symbol are trademarks of Dolby Laboratories. INSTALLATION: Standard professional installation only. Custom installation extra. SYSTEM LEASE: Purchase of 24 consecutive months (for standard and advanced receivers) of any DIRECTV programming package ($29.99/mo. or above) or qualifying international service bundle required. FAILURE TO ACTIVATE ALL OF THE DIRECTV SYSTEM EQUIPMENT IN ACCORDANCE WITH THE MULTI-DWELLING UNIT PROGRAMMING AGREEMENT AND EQUIPMENT LEASE ADDENDUM MAY RESULT IN A CHARGE OF $150 PER RECEIVER NOT ACTIVATED. IF SERVICE IS TERMINATED BEFORE THE END OF COMMITMENT, A CANCELLATION FEE OF $20/MO. REMAINING WILL APPLY. ALL EQUEMENT IS LEASED AND MUST BE RETURNED TO DIRECTV UPON CANCELLATION, OR RETURNED EQUIPMENT FEES APPLY. CALL 1-800-DIRECTV FOR DETAILS OR YOUR AUTHORIZED MDU DEALER. Programming, pricing, terms and conditions subject to change at any time. Pricing residential. Taxes not included. Receipt of DIRECTV programming subject to DIRECTV Customer Agreement; copy provided at directv.com/legal and in first bill. ©2010 DIRECTV, Inc. DIRECTV and the Cyclone Design logo are registered trademarks of DIRECTV, Inc. All other trademarks and service marks are the property of their respective owners.

Editor’s Note

Interesting Times

EDITORIAL DIRECTOR

Scott DeGarmo PUBLISHER

Nancy McCain [email protected] Corporate Editor, BBP LLC

Steven S. Ross [email protected] Editor

Masha Zager [email protected] ADVERTISING SALES

Irene G. Prescott [email protected] Marketing Specialist

Meredith Terrall [email protected] DESIGN & PRODUCTION

Karry Thomas

Contributors

Joe Bousquin David Daugherty, Korcett Holdings Inc. Richard Holtz, InfiniSys W. James MacNaughton, Esq. Henry Pye, RealPage Bryan Rader, Bandwidth Consulting LLC Robert L. Vogelsang, Broadband Properties Magazine Broadband Properties LLC PRESIDENT & CEO

Scott DeGarmo

SENIOR VICE PRESIDENT CHIEF FINANCIAL OFFICER

Himi Kittner

VICE PRESIDENT, BUSINESS & OPERATIONS

Nancy McCain

Audience Development/Digital Strategies

Norman E. Dolph

CHAIRMAN OF THE BOARD

Robert L. Vogelsang VICE CHAIRMAN

The Hon. Hilda Gay Legg BUSINESS & EDITORIAL OFFICE Broadband Properties LLC 1909 Avenue G Rosenberg, Tx 77471 281.342.9655, Fax 281.342.1158 W W W.BROADBANDPROPERTIES.COM

Broadband Properties (ISSN 0745-8711) (USPS 679-050) (Publication Mail Agreement #1271091) is published 9 times a year at a rate of $24 per year by Broadband Properties LLC, 1909 Avenue G, Rosenberg, TX 77471. Periodical postage paid at Rosenberg, TX, and additional mailing offices. POSTMASTER: Please send address changes to Broadband Properties, PO Box 303, Congers, NY 10920-9852. CANADA POST: Publications Mail Agreement #40612608. Canada Returns to be sent to Bleuchip International, PO Box 25542, London, ON N6C 6B2. Copyright © 2010 Broadband Properties LLC. All rights reserved.

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On the one hand, this is a great time for FTTH. On the other hand, the opportunity could slip away if we’re not careful.

well-known and likely fictional Chinese curse is, “May you live in interesting times.” There is no doubt we are living in interesting times. On the one hand, ultra-broadband networks present us with opportunities to transform our society. This issue of Broadband Properties is chock-full of examples. RUS Administrator Jonathan Adelstein tells us (page 30) broadband networks are the key to rural economic vitality, as does economist Jed Kolko (page 44). Graham Richard, the former mayor of Fort Wayne, Ind., tells us (page 34) broadband is the key to solving the energy crisis. A robust fiber network helped Duke University (page 54) upgrade its communications systems to keep students, employees and visitors safe in case of emergencies. The consumer electronics industry (page 65) is working overtime to enable home telepresence over broadband – allowing you to have dinner with your mother in Duluth without getting on a plane – as well as new options for entertainment, home automation, telemedicine and more. On the other hand (wasn’t it Harry Truman who wished for a one-handed economist?), many countries seem far more eager than the United States is to take advantage of these opportunities. Switzerland (page 24) has joined the ranks of countries committed to rolling out fiber to every household. Providers in Canada, the Netherlands and even Lithuania now offer symmetrical 200 Mbps Internet service – speeds no one is offering today in the United States. On the third hand, more than 500 telecom providers in the United States are building out fiber networks that will meet customers’ telecommunications needs for the foreseeable future. Soon a new group of providers funded by the Rural Utilities Service will join them (page 12); other organizations, funded by the National Telecommunications and Information

Administration, will work on upgrading the middle-mile infrastructure that allows local providers to connect to the Internet at reasonable cost. To the ranks of these new providers, add the surprising name of Google (page 4). Google plans to build, as an experiment, 1 Gbps open-access networks in an unspecified number of American locations; communities are already lining up to volunteer as guinea pigs. Google is as interested as any deployer in the transformational possibilities of high-speed networks and pledges to promote the nextgeneration applications that will change the way we live and work. On the fourth hand (this is beginning to sound like a bridge game), Google’s FTTH project is (for now) limited in scope, and Verizon’s enormous FiOS project is winding down, with 15.4 million out of a planned 18 million homes passed (page 18) and the remainder scheduled to be completed by the end of this year. Even if Verizon decides to build out more fiber – and it must, to fulfill promises it made to win video franchises – it won’t build much more. Without Verizon’s forcing cost efficiencies, will deployment costs continue to fall? If costs stop falling, will building out fiber to the remaining 90-odd million homes be possible? Will the fiber rollout grind to a halt after 2010? Some in the industry hoped the federal government would come to the rescue, but the repeated delays in the broadband stimulus program have made clear the political obstacles to government-subsidized broadband. So what will it be? Will we, as a society, grasp the opportunities offered to us by ultra-broadband technology, or will we let the opportunities elude us? Stay tuned.

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[email protected]

Table of Contents DEPARTMENTS

Cover Story: Broadband Policy

Editor’s Note . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 The Bandwidth Hawk. . . . . . . . . . . . . . . . . . . . . . 4 BBP Marketplace. . . . . . . . . . . . . . . . . . . . . . . . 80 Advertiser Index. . . . . . . . . . . . . . . . . . . . . . . . 84 Calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

Exclusive Interview: Adelstein Sharpens Focus on Rural Broadband | 30

IN THIS ISSUE Provider Perspective A Little Ditty About Small Towns | 6

By Bryan J. Rader ■ Bandwidth Consulting LLC Second-tier cities have been largely overlooked by big providers rolling out next-generation networks. Private cable operators can find great opportunities there.

Owners Corner Always Do the Math | 8

By Henry Pye ■ RealPage and Terry Fulbright ■ UDR Inc. Experienced multifamily owners may be tempted to “guesstimate” the value of proposed telecom contracts, but they should avoid the temptation. As always, the devil is in the details.

Metrics Designing the Network | 10

By David Daugherty ■ Korcett Holdings Network operators can save dollars on design and maintenance – and achieve better performance – by using consistent design standards for networks across all their properties.

Fiber Deployment Roundup Enter Google | 12

By Masha Zager ■ Broadband Properties Google’s surprise entrance into the fiber-to-the-home arena is drawing national attention to the potential benefits of 1 Gbps networks. But other deployers in the U.S. and around the world are building networks with the same capabilities.

Property of the Month Forty 57 at Glasford, Lexington, Ky. | 25

By Hilda Gay Legg ■ Broadband Properties Former Rural Utilities Service Administrator Hilda Gay Legg met in January with the new RUS chief, Jonathan Adelstein, for a wideranging talk about the RUS’ mission and priorities in advancing rural telecommunications.

Green Technology Go Smart. Go Green. | 34

By Graham Richard ■ Graham Richard Associates LLC The former mayor of Fort Wayne, Ind., shows how synergies between high-speed broadband and energy conservation make FTTH a tool to address environmental problems.

Economic Development Broadband Boosts Local Economic Development | 44

New research ­by Jed Kolko of the Public Policy Institute of California demonstrates the causal links between broadband expansion and employment growth at the local level.

Municipal Broadband UTOPIA Experiments With User Financing | 50

By Christopher Mitchell ■ Institute for Local Self-Reliance Homeowners in Brigham City, Utah, are financing the buildout of the UTOPIA FTTH network in their city through a voluntary special assessment. Will this method work in other municipalities?

Service Provider Strategies To Cap or Not to Cap? Look at the Data | 52

By Masha Zager ■ Broadband Properties Business analytics can unearth valuable information in the mounds of customer data that service providers collect. You may be surprised at what you find.

Deployment Case Study: Fiber and Wireless Duke University Uses Campus Fiber Network to Boost Wireless Coverage | 54

By Joe Bousquin ■ Contributing Editor, Broadband Properties Ball Homes collaborated with Windstream to bring fiber to this greenfield apartment community, which is now the first fiber-tothe-unit MDU in the Lexington market.

By Masha Zager ■ Broadband Properties Duke University’s fi­ber network, originally built for data communications, is now moving cellular signals to hard-to-reach places on campus.

Broadband Apps

By Steven S. Ross ■ Broadband Properties Technology innovations on display at last fall’s FTTH Conference were geared to making fiber installation simpler, faster and less expensive.

Consumer Electronics Industry Continues to Drive Bandwidth Demand | 65

A BBP Staff Report TV-based video communications, 3DTV and smart-home applications were among the bandwidth-hungry products demonstrated at the 2010 CES, held in Las Vegas in January.

Home Networking Strategies for Service Providers | 74

By Kurt Scherf and Jayant Dasari ■ Parks Associates The home residential gateway will reduce service providers’ provisioning and support costs and enable new consumer services.

Technology Making MDU Deployments Easier | 56

Optical Tapping in Rural Applications | 61

By Ian Dancel ■ CommScope A tapped architecture for fi­ber distribution in RFoG deployments reduces the learning curve for cable operators and offers cost advantages, especially in rural areas.

ABOUT THE COVER Manhattan artist Irving Grunbaum is inspired by the promise of broadband for all.

Bonus Spring Issue | www.broadbandproper ties.com | BROADBAND PROPERTIES |

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Welcome to the Gigabit Age By Steven S. Ross ■ Broadband Properties

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oogle’s announcement in early February that it is looking for municipal partners to build some “trial” 1 Gbps fiber-to-the-home open-access networks serving 50,000 to 500,000 households shook up the industry. It also caught the notice of the Federal Communications Commission, which is on track to miss (by at least a month) its February 17 deadline for release of a national broadband plan. The idea benefits Google – and, at least in the short term, consumers lucky enough to get the service. It also gets more of the network-building industry back to work. As a bandwidth hawk, I applaud it. There’s no question Google can afford it. At $700 a dwelling unit passed (Google says it can do it for less), 50 percent take rate (the FTTH average) and $300 to wire a customer’s home, a 500,000-household build would cost $425 million for the network itself. At $400 a year per customer gross profit, that’s $100 million a year – more than enough to cover overhead and cost of capital and make a good profit. And, of course, Google has the money in the bank. In fact, Google has enough money in the bank to build out to 10 million households. Presumably, its “partners” would add to the kitty. Some key points: • Google has to do this, not simply because it is pushing cloud computing for the masses. Google had about $22 billion in revenue last year, almost all from advertising. This is about half of all revenue from Internet advertising in the United States. Regulators have taken notice. If Google is going to grow, the growth has to come from other activities. Sources say that the gigabit initiative comes right from the top – co-founder Sergey Brin. We believe it, despite the fact that Google’s ad-supported free muni Wi-Fi went nowhere beyond its headquarters town, Mountainview, Calif..

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• Google has clearly been shopping for technology. Calix, Occam and others have been shipping optical network terminals (ONTs) with 1 Gbps capacity in both directions simply because the added cost is so low that telcos and other ISPs have been willing to pay it. Occam alone says it has shipped 100,000 1 Gbps ports. PacketFront announced end-to-end 1 Gbps in January. Hauwei is supplying Singapore with a Gbps network that is well along to meeting its 2013 completion deadline. • Google’s online application form (at www.google.com/appserve/fiberrfi) looks similar enough to the Round 1 stimulus application that many unsuccessful entrants in the stimulus lottery will find it easy to port their projects to Google’s requirements. • Qwest, whose stock has been falling for months, is toast. Here’s a competitor that could build out all Qwest’s broadband-starved urban areas in the next few years. Neither AT&T nor Verizon is willing or able to buy Qwest as is, so Google emerges as one of the few thin hopes people in the Qwest service area have for decent broadband. • Verizon can match Google’s network speeds with FiOS, which has enough backhaul capacity to deliver 1 Gbps, although it will have to swap out many of its older ONTs. Many smaller telcos can match Google as well, as long as their on-ramp connections to the national network aren’t too expensive – but fortunately, the focus of the initial group of stimulus funding awards has been on building the middle-mile links that will reduce the costs of these

connections. Cablecos and AT&T, by contrast, will be under enormous pressure to upgrade their networks. One flaw in Google’s plans: Even though there is no question that openaccess networks are more likely to make big profits in the long run than are the walled gardens that major telcos and cablecos have built in the United States, they face hurdles in getting started. Yes, Google itself is riding Verizon’s rails and has colocated in Verizon central offices along with mutual partner Akamai. But in the United States, pure open access has not worked well at all. The incumbents control so much video content that new open-access nets have had to create their own in-house video services to compete. Smaller telcos see plenty of interesting new services they’d like to offer – distance learning, telemedicine, teleconferencing and so forth – but do not have the staffs to manage them all. An industry to aggregate myriad thirdparty services is just being born now. Our forecast: Many of the big incumbents will try hard to sabotage this project at the state level – the federal government is too smart to fall whole-hog for the incumbents’ short-term agenda. And they will succeed in many cases. They spread a great deal of money around the dung heaps that politicians have to wallow in to collect funds for elections. And thanks to the Supreme Court’s utter “brilliance” in allowing corporations to marshal unlimited funds to pull the politicos in line, they can now appeal directly to a gullible public. But five years down the road? All the incumbents will be paying to ride Google’s open-access nets. And Google could have far more than 500,000 households hooked up. BBP

About the Author Write to the Hawk at [email protected].

| BROADBAND PROPERTIES | www.broadbandproper ties.com | Bonus Spring Issue

Faster In the telecommunications industry, survival of the fittest is based on speed. Not only do providers need a contractor that can create faster connections for end users, they also need a contractor who can build that infrastructure at the speed necessary to accommodate outward growth and increasing demand for fiber networks. Quanta Services is keeping pace. We literally laid the groundwork of the fiber optic network that we’re expanding today by bringing fiber to the home, node and premise. Add in the experience of more than 14,000 employees working in all 50 states and Canada, and it’s safe to say nobody can mobilize faster or work more efficiently than Quanta Services. Enlist the speed and strength of Quanta Services to get further, faster.

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Provider Perspective

A Little Ditty About Small Towns The big MSOs and telcos have zeroed in on major metropolitan markets, leaving good opportunities in smaller markets for private cable operators. By Bryan Rader ■ Bandwidth Consulting LLC

“I

was born in a small town, and I can breathe in a small town.” Do you remember those John Mellencamp lyrics from his 1980s anthem about living in a small town in middle America? It was a big hit, heard on the radio, sung in the elevator and watched on MTV. Everybody was humming it. Everybody except the big cable and big phone guys, whose anthem has lyrics about “building only in the biggest towns that can support our newest and biggest technologies.” Big cities have been the desired targets for the largest telco and cable providers. They are not so familiar with “this little ditty about Jack and Diane” (sorry, wrong Mellencamp hit). Over the past 20 years, Comcast has grown by clustering its business in the largest markets across the U.S. – the NFL towns. Time Warner Cable has essentially done the same. Who can argue with this strategy? Much of the rapid population growth over the past decade occurred in new Comcast markets such as Atlanta, Houston and south Florida, giving Comcast better scale for its newer features – HD expansions, DOCSIS 3.0 upgrades and digital voice. A few years ago, the big phone guys also decided to focus on big towns, or at least big metro areas (sometimes the cities themselves were left for later). FiOS and U-verse were launched in markets such as Boston, D.C. and Dallas and have been expanding into New York and Philly. The telcos are “rockin’ in the U.S.A.,” as Mellencamp would say. Their theory was that if they were going to capture 20 percent of the market, it might as well be a large market. Verizon is almost finished wiring up 18 million homes; AT&T is on its way to 30 million. This means more options for property owners in these areas.

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The multifamily track at the Summit will feature more than a dozen sessions with important information for private cable operators.

Opportunities in Smaller Markets However, the telcos are not touching a lot of secondary markets, and there’s reason to believe they will scale back their rollout efforts, trying to increase penetration of existing large cities rather than lighting up new ones. I’ll bet the sales guys are screaming to get services into more “little pink houses.” (Sorry, I couldn’t resist making one more Mellencamp reference.) This leaves MDU owners in nonNFL markets in a quandary. If they don’t like the local cable company, how will they find alternatives? A well-known property owner consultant said to me recently, “While the big cable and telco TV guys fight it out in the large markets, there’s a huge opportunity here for other independent providers to bring options to these secondary markets.” “You’re exactly right,” I said. And who can grab that opportunity better than private cable operators (PCOs), which have a strong knowledge of the MDU world and are geographically well-positioned to enter some of these secondary markets?

Although I am not implying that we should leave the large towns, where there is still plenty of opportunity, I believe PCOs should look into many of these second-tier markets in their regions. There is so much potential to compete in these towns as the alternative option for property owners. Over the past two decades, PCOs have too often chosen to stay in the biggest markets, just as the cable and telco guys did. But in many mid-sized areas, they can present property owners with an exciting option. “No FiOS or U-verse here?” an owner will say. “Who cares? I’m selecting a PCO to bring choice.” Of course, property owners in smaller markets may be different. They may not be publicly owned REITs. They may not attend the national technology shows. They may not read this magazine. But they own a lot of properties in their markets, they care deeply about customer satisfaction and they will appreciate the special attention offered by a PCO. So take a look at the small towns Mellencamp was singing about. You’ll be surprised by the opportunities that await you. Your successful expansion might “hurt so good” that you’ll be singing Mellencamp songs all the way to the bank. BBP

About the Author

Bryan Rader is CEO of Bandwidth Consulting LLC, which he founded in 2007 to assist providers with their performance in the multifamily market. Prior to starting Bandwidth Consulting, he founded and ran private cable operator MediaWorks for 10 years. You can reach Bryan at [email protected] or at 636-536-0011. Learn more at www.bandwidthconsultingllc.com.

| BROADBAND PROPERTIES | www.broadbandproper ties.com | Bonus Spring Issue

Visit us at Boot h #315

Owners Corner

Always Do the Math Owners should always take the time to calculate the value of voice, video and high-speed Internet access contracts. By Henry Pye ■ RealPage and Terry Fulbright ■ UDR Inc.

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ost marketing agreements between service providers and MDU property owners include ongoing revenue shares of defined income. Though a few marketing agreements provide for commissions or other predefined payments for marketing assistance, revenue sharing is the principal method of compensating owners for marketing support. The first and most important question an owner should ask when calculating the income from marketing voice, video and high-speed Internet access services is how revenue is defined. Other metrics are immaterial unless they are applied to quantifiable revenue. Unfortunately, marketing agreements define income in many different ways, with an endless array of options and caveats. Only after defining revenue can the owner calculate the amount of applicable revenue per customer, using the definition of income specified in the marketing agreement. Having calculated the anticipated monthly revenue per customer, the owner must estimate the average penetration for each service to determine the applicable revenue share and the average monthly revenue per unit. Penetration rates are perhaps the most difficult metric to estimate because they vary greatly over time as well as among services, providers and communities. Not surprisingly, the presence of competition to the marketed services also tremendously affects penetration rates. When revenue shares are scaled, competition also reduces the revenue share percentage, often doubling the loss of monthly income. Although competition greatly benefits residents and communities, it almost always takes a sizable bite out of the income that owners derive from marketing agreements. Today, few flat revenue shares are available. Revenue shares are usually

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Henry Pye will speak at the Broadband Properties Summit about evaluating an existing multifamily community.

scaled and are based on increasingly complicated formulas. Moreover, many providers use different revenue-share scales for each service marketed. At least one national provider establishes separate revenue-share scales not only by service but also by how the services are bundled. This requires multiple revenueshare calculations for each service. In general, owners should use the following equation for each marketed service: estimated average income per unit = average revenue per customer x estimated penetration rate x applicable revenue share Remember occupancy Rates Surprisingly, after making all these calculations, many owners forget to allow for occupancy rates. Occupancy’s effect on income can be factored into other measures, such as the penetration rate, or calculated separately, but it must be accounted for somewhere because complete occupancy is seldom realized. Any income should be discounted for the time value of money. Negotiations with voice, video and high-speed Internet access providers often balance up-front capital against ongoing income. At least in theory, neither should be preferred as

long as future income is discounted at the appropriate rate. Then again, a future buyer saddled with a long-term contract may question a seller that has pocketed all the income up front. Guided by experience with realistic assumptions, an owner can calculate reliable short-term estimates for monthly income. However, the variance between estimated and actual income increases exponentially with time. Estimates more than a few years in the future should be used primarily to compare the value of competing long-term offers. Owners should update their budget projections regularly. Because of the differences among providers, regions, communities and contracts, owners should always complete this analysis for every proposal from a voice, video or high-speed Internet access provider. Although experienced owners can often guesstimate the value of one offer compared with another, even they are often surprised by the results. An owner should always do the math. In the next issue, wrapping up this series of columns about common mistakes in contract negotiation, Ian Davis will discuss how to ensure that a consultant protects an owner’s interests. BBP

About the Authors Owners Corner is written by Henry Pye and industry peers. Henry is vice president of Resident Technology Solutions for RealPage (www.realpage.com). He can be reached at [email protected]. Terry Fulbright is vice president, director of ancillary services for UDR Inc. (www.udr.com). Terry can be reached at [email protected].

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Putting the FTTx puzzle pieces together.

Maximize your Broadband Stimulus Opportunity AFL and Tellabs understand the FTTx puzzle and know how to put the pieces together for your network deployment. With over two decades of experience and products that deliver the desired result, this collaborative effort provides adaptive solutions great for:

Municipalities

•

Telecommunications Providers

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Cable Service Providers

Our combined offerings are available to assist you in the process of implementing your end-to-end network, including passive fiber plant products, electronics, services, and content. For more information, contact AFL at:

800.235.3423 or AFLtele.com/go/Stimulus

Designing the Network Network design standards can significantly improve performance and reduce operating costs. By David Daugherty ■ Korcett Holdings

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iven the rate at which users are streaming video from the Internet, network design standards are crucial. A 720p video stream consumes between 1 and 3 Mbps, depending upon picture size, and a 1080p video stream consumes between 2 and 6 Mbps. The fine print on an Internet service agreement usually includes the term “best effort.” This means that the service provider probably designed its data services based on oversubscription, to keep costs down, and is unwilling or unable to guarantee bandwidth. No one wants to discuss what happens when users run out of bandwidth, which is like running out of hot water when too many people want to take a shower at the same time. What does this mean for MDU owners and managers? If a property has 1,000 residents and a property bandwidth cap of 100 Mbps, it can support a 1 Mbps x 1 Mbps connection on a 10to-1 oversubscription basis. Adding video to the mix changes things dramatically. Each video stream, assuming minimum picture size and resolution, consumes 1 percent of the total available bandwidth. Translation: Fewer than 100 residents watching 720p streams will crater the network. If they watch larger pictures or have flat-screen HDTVs, 14 to 16 residents (only 1.5 percent) can crash the network. How likely is this to happen? It’s only a matter of time. The real question is, are you ready for it? Is your finance department prepared for the cost of unexpected network and bandwidth upgrades? Most developers don’t discriminate between managing bandwidth intelligently and simply throwing bandwidth at the problem, but the distinction is crucial. If you have a good bandwidth management system, you will know when to add bandwidth. Without intelligent manage-

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David Daugherty will speak at the Broadband Properties Summit about creating new, standardized ways to define good service in contracts.

ment, you end up paying for more bandwidth whether you need it or not. The Importance of Standards Bandwidth is just one of a complex set of network design variables affecting stability and performance. Unless developers assume control of network design, they must rely on the competence and goodwill of their service providers. However, there is a simple fix. Instead of paying for a new network design every time they build or acquire a property, developers can find a competent network design firm, pay for one design and use it as the standard for all future projects. For example, no two managed-switch vendors have the same product functionality and command line interface (CLI). To make matters worse, few vendors maintain functionality and CLI from one software release to the next. Therefore, you can reduce the amount of inhouse expertise required to deploy and support a large number of geographically dispersed networks by limiting the number of different managed-switch vendors whose products you are willing to deploy. At KHI we have standardized on Dell and Cisco. In terms of design costs, the benefit of using design standards is straightforward and significant. If the design for a

single property network costs $12,000 in engineering fees and a developer has 50 properties, then designing each property network individually will result in a total cost of $600,000. Retaining an engineering firm to develop a set of design standards that can be used for the networks at all 50 properties can save over half a million dollars in up-front costs alone. From a problem resolution perspective, the benefit of using design standards is harder to calculate, but it’s still real. For example, suppose some new, wildly popular Internet-based service or malware is introduced that consumes a great deal of bandwidth. The resulting spike in bandwidth consumption creates performance problems for your residents. Let’s assume your service provider is responsive and that the leasing office spends only eight hours to deal with irate residents while the problem is identified and corrected. Without design standards, the developer ends up paying to resolve the same problem 50 times, for a total of 400 hours of leasing office time. If you assume an hourly rate of $20 for front office staff, this translates to $8,000 in operational expense. Finally, let’s be optimistic and assume that you only see one such problem a quarter. This translates to an unexpected and ongoing operational expense of $32,000 per year. BBP

About the Author David Daugherty is the CEO and founder of Korcett Holdings and can be reached at [email protected]. Korcett Holdings is dedicated to the development and deployment of next-generation service solutions.

| BROADBAND PROPERTIES | www.broadbandproper ties.com | Bonus Spring Issue

TRULY UNDERSTAND FTTH TRENDS AND IMPACT

For Vendors RVA’s new “FTTH History & Forecast: 2001-2015” Report provides trusted current industry data in a valuable historical trend analysis format. Although predicting exactly when the market will take another leap forward in growth is difficult, RVA’s future trend forecast can give crucial market guidance broken down into many industry segments. The report is based on eight years of historical analysis and hundreds of in-field interviews.

For Providers RVA’s report, “FTTH Impact & Viability: The Local Case For Fiber,” provides essential information, especially for those developing BTOP or BIP stimulus related proposals using FTTH technology. Based on hundreds of case studies, it provides the powerful and compelling industry data and graphics needed to refine and support a specific project and help move it to the top of the stack.

www.RVA LLC.com

Enter Google Which will be more stimulating for fiber to the home – the federal broadband stimulus program or Google’s latest venture? By Masha Zager ■ Broadband Properties

Preview

Learn about fiber-to-the-home deployment challenges and successes at the Broadband Properties Summit in Dallas, April 26–28, where FTTH deployers of all kinds will share their experiences with attendees.

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e expected this issue’s fiber deployment roundup to feature the award of $4 billion in broadband stimulus funds and the news that fiber-to-the-home networks were being built across the land. In fact, several FTTH stimulus awards had been made as of press time (see below), and I hope that additional awards will have been announced by the time you read this. But decisions about the stimulus funds have been frustratingly slow, and even media outlets that don’t often cover broadband issues in any comprehensive way, such as National Public Radio, have begun asking pointed questions about who or what is stalling the program. The exciting news this month didn’t turn out to be the stimulus program at all, at least not the official one. In a surprise move, Google said that it planned to build one or more open-access FTTH networks, and it invited municipal officials, broadband activists and ordinary residents to nominate their communities as sites for the networks. Within a few days, cities began to announce that they were interested in Google’s proposal, and the company seems likely to have as many applicants as the stimulus program does. For an indepth discussion of Google’s potential future as a network operator, see this issue’s Bandwidth Hawk column.

Why does Google refer to its FTTH project as an “experiment”? As FTTH technology is well beyond the experimental stage, any experimentation seems likely to involve the open-access business model – which has been less successful in the United States than in Europe – and new uses for gigabit broadband. Google has a history of trying to act as a catalyst for the telecom industry – in particular, to push it toward greater openness. In 2008, it succeeded, without actually buying any spectrum, in making open access a condition of sale in a major auction of wireless spectrum. And by championing open mobile devices, the company spurred other vendors to give smart phone users a wider choice of applications. Clearly, Google’s primary business stands to benefit in the long term from innovation and competition in broadband services. For example, imagine the advertising Google could sell on an ultra-HDTV YouTube service. But whatever Google’s FTTH experiment proves to be, we look forward to bringing you news of its progress in future issues. – MZ

INDEPENDENT TELCOS

RUS ❤ Fiber Fiber-to-the-home projects took center stage in January when Agriculture Secretary Tom Vilsack announced that the Rural Utilities Service had made 14 broadband stimulus awards total-

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ing $309 million – 11 of them including FTTH. Independent telco awardees included the following: Rural Telephone Service Company, a cooperative telco that was one of

the first companies in the United States to deploy fiber to the home, along with its subsidiary, Nex-Tech, will receive a grant of $49.6 million and loan funds of $51.6 million to develop broadband

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services in unserved and underserved areas of central and western Kansas. Most of the project will use FTTH technology, although some remote rural areas will be served with WiMAX. According to CEO Larry Sevier, this massive construction project will span more than 4,600 square miles and bring service to 21 towns and 26 rural areas in 11 counties. Nearly 23,000 households and businesses, including 335 community anchor institutions, will benefit, and more than 400 jobs will be created. Project partners include engineering firms RVW, Finley Engineering and HunTel Engineering along with contractors Michels Corporation, Midwest Contractors and Sellenriek Construction. Although Rural Telephone’s numbers are large, they don’t tell the whole story. Emphasizing the importance of broadband to quality of life, Rural Telephone wrote in its application, “Consider the Bolings, a deaf couple who desire broadband access to communicate with friends. Or Karen Buss, a widow trying to run a farm with her two college-age daughters, who could prepare for their futures through distance learning opportunities. The Gallentine family would benefit from telemedicine, as their doctor is 60 miles from their home.” NTELOS, a large ILEC in Virginia, was awarded an $8 million grant and an $8 million loan to build an FTTH network to deliver triple-play and other services to unserved and underserved homes, businesses and critical community institutions in rural Alleghany County. The proposed service area includes an estimated 4,216 households, 233 businesses and 36 community entities. NTELOS anticipates that longterm benefits from the initiative will include • enabling home-based jobs for homebound residents and those who cannot find local employment • enabling home-based job training • attracting new businesses and employees that require access to robust broadband Internet, data and video services • improving health care by supporting

In the most recent batch of broadband stimulus awards, nearly all the last-mile projects included fiber to the home. The largest of them covers 23,000 homes and businesses. the requirements for telemedicine capabilities, both in-home and at medical facilities • improving educational opportunities for children • improving communication capabilities of public safety personnel and facilities. Audeamus (Latin for “let us dare”), a subsidiary of Sebastian Enterprises, which owns two small ILECs in California, was awarded a $2.7 million grant and a $2.7 million loan for its Westside Broadband Project for Rural Central California. This all-fiber network, using active Ethernet equipment from

Occam Networks, will provide Internet access at speeds between 3 Mbps and 100 Mbps in the farming communities of San Joaquin, Tranquillity and West Fresno. The project will pass 1,368 unserved and underserved households, 125 businesses and 24 community anchor institutions. C-M-L Telephone Cooperative Association, an Iowa ILEC, received a $1.5 million grant and a $1.5 million loan and contributed $1.5 million in matching funds toward a fiber optic network that will provide the rural communities of Archer and Meriden with high-speed Internet access at speeds exceeding 20

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Mbps, along with digital television and telephone service. Another Iowa ILEC, F & B Communications, received a $1.6 million grant and a $1.6 million loan to bring highspeed Internet services over fiber to the rural areas surrounding the communities of Bennett, Delmar and Lowden. Services include high-speed Internet access at speeds exceeding 20 Mbps, along with digital television and telephone service. North Central Telephone Cooperative in northern Tennessee received a $24.7 million grant and a $25 million loan to build out fiber in the communities of Westmoreland, Lafayette, Pleasant Shade and Defeated and to complete the builds it began in two other towns. The company will provide advanced voice, video, and data services. Northeast Louisiana Telephone Company will use its $4.4 million grant and $8.1 million loan to build an active Ethernet FTTH network with symmetrical speeds of 20 Mbps in Morehouse Parish. BEK Communications Cooperative, whose North Dakota FTTH build was featured in the January 2008 issue of this magazine, will use its $1.9 million grant, $2 million loan and $2 million in leveraged funds to provide FTTH broadband service to underserved homes and anchor institutions in Burleigh County. In the nearby area where BEK already provides broadband service, it has achieved 53 percent penetration, and 22 percent of users derive household income from using the Internet. BEK expects to duplicate this in the proposed area. Halstad Telephone Company in Minnesota received a $2 million grant and a $2 million loan to provide 100 Mbps broadband access via FTTH to 430 unserved homes and businesses in rural Hillsboro, N.D. Gervais Telephone Company, a cooperative in Oregon, was awarded a $314,430 grant and a $314,430 loan. Gervais will extend its existing fiber network to provide broadband connectivity in Marion County to residential and business end users, as well as four anchor institutions.

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Other Independent Telco News Syringa Networks, a privately held provider based in Boise, Idaho, is expanding its fiber optic network into the Wasatch Front region of northern Utah, a rapidly growing area that includes Salt Lake City and Provo. This network expansion more than doubles the company’s total addressable market. The expanded fiber plant will provide high-speed, self-healing fiber optic network services to businesses throughout the Wasatch Front. Greg Lowe, CEO of Syringa Networks, says, “Utah businesses that have connection needs into rural Idaho have limited options with their current carriers. As eastern Idaho, Boise and Salt Lake City continue to grow, there will be increased needs for high-speed connectivity within this market. Our expansion makes it easier and more cost effective for businesses with distributed

branch offices to implement advanced telecommunication services.” Wireless cellular and data carriers in the area can meet smart-phone bandwidth demand through Syringa Networks’ fiber-to-thetower (FTTT) program. Medicine Park Telephone Company in Oklahoma selected the Motorola GPON solution for its fiber-tothe-home network, which will allow it to offer dramatically higher-capacity broadband services, including new video offerings that use Motorola’s line of RF set-top boxes. Motorola is partnering with distributor Power & Tel to reach rural providers such as Medicine Park. Etex, a subsidiary of Etex Telephone Cooperative in eastern Texas, has deployed voice, high-speed data and high-definition video services to consumers and businesses over a Brocade IP network. Etex deployed the Brocade NetIron MLX 10 GbE routers and

Vendor Spotlight Aksh Optifibre. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.akshoptifibre.com Alcatel-Lucent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.alcatel-lucent.com Amino Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.aminocom.com Brocade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.brocade.com Cisco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.cisco.com Conklin-Intracom. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.conklin-intracom.com EchoStar Satellite Services . . . . . . . . . . . . . . . . . . www.echostarfixedsatellite.com Enablence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.enablence.com Entone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.entone.com Ericsson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.ericsson.com Finley Engineering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.fecinc.com Genexis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.genexis.eu Geo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.geo-uk.net HunTel Engineering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.htleng.com Michels Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.michels.us Microsoft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.microsoft.com Midwest Contractors. . . . . . . . . . . . . . . . . . . . . . . www.midwestcontractorsks.com Minerva Networks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.minervanetworks.com Motorola . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.motorola.com NetNordic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.netnordic.no Occam Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.occamnetworks.com PacketFront. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.packetfront.com Power & Tel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.ptsupply.com Pulse Broadband . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.pulsebroadband.net RVW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.rvwinc.com Sellenriek Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (636)488-3151 Tilgin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.tilgin.com Uptown Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.uptownservices.com Westell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.westell.com Zhone Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.zhone.com

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Velocity Achieves Takeoff Speed Minnesota’s Twin Cities area may soon have a fiber broadband option, thanks to competitive provider Velocity Telephone. Velocity recently launched its first fiber-tothe-home build in the community of Eagan, south of Minneapolis and St. Paul. The Gigabit Ethernet network will provide triple-play services for business and residential customers. Velocity will begin by targeting about 250 small and mid-sized businesses in Eagan’s business district, offering the fastest Internet connection at the lowest cost in the Twin Cities area, along with colocation, hosting, data backup and disaster recovery services as well as a hosted VoIP service. In mid-2010, Velocity plans to expand to nearby residential neighborhoods with voice, data and IPTV services. Video is new for Velocity, which up until now has resold Internet access and other voice and data services over Qwest infrastructure. Unless an existing provider steps in to offer video services over Velocity’s fiber network, Velocity plans to form a separate company, the Minnesota Open Video Network, to operate the video service. Velocity has made a number of unusual choices in terms of technology, marketing and finance. Metro Ring Technology The active Ethernet network will be based on a smallfiber-ring architecture in both business and residential areas (blue lines on the map are fiber rings). As company president Jim Hickle explains, “We’ll be daisy chaining the fiber from business to business and from house to house.” This redundant, self-healing architecture is designed to reduce deployment costs, increase network reliability and minimize repair costs. “It’s easier on my technicians in the long run,” Hickle says. “I won’t have to send them out at two in the morning.” Another innovative technology Hickle is considering is a set-top box that integrates over-the-top (OTT) video on demand with over-the-air (OTA) linear channels, with a single interactive program guide. Velocity’s initial video service in Eagan will be a traditional cable offering, but if the OTT/OTA solution proves feasible, Hickle may offer it in other communities to avoid local franchising battles. “Franchise agreements are kind of a dinosaur,” he says. Marketing Innovations Before beginning to build out fiber in Eagan, Velocity approached businesses there to preregister them for the service. Its offer was simple: Buy copper-based services from us today, and once the fiber is in place, you can have 10 Mbps Internet access over fiber for the same price. Many businesses – including both current and new customers – have already signed up for fiber, so Velocity has a guaranteed take rate from the day it turns up service. In the past, much of Velocity’s marketing has been

through word of mouth (“We can’t yell loud enough to compete with Comcast and Qwest,” Hickle says), and the company will continue that approach with its fiber network. It plans to market fiber services with the help of “fiber sponsors,” customers who agree to help spread the word by showing their neighbors how fiber-based solutions can improve their businesses. Financing the Build Velocity aims to build FTTP networks covering the entire Minneapolis–St. Paul metropolitan area. At first, the company sought municipal partners to finance open-access networks but failed to find any takers. Joint financing arrangements, such as secondary letters of credit issued by municipalities, are prohibited under state law. That left the company on its own to find financing. As a small company in a capital-constricted time, “we’re not going to get $1 billion at once,” Hickle says with characteristic understatement. Rather than miss another construction season, he decided to start small. He would build as large a project as he could finance (in this case, about $750,000 worth), make it cash-flow positive as quickly as possible by presigning customers, and move on to the next project. He selected Eagan for the trial run because it is a community with a high demand for broadband – lots of high-tech companies and telecommuters – that is largely underserved. After the Eagan network is up and running, what’s next? Hickle is still optimistic about municipal financing, which would allow the company to build networks in multiple communities at the same time; he says municipalities are showing more interest now that Velocity is actually building a network. If public financing doesn’t materialize, however, he will continue with his piecemeal approach. There are plenty of underserved communities in the Twin Cities area.

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FastIron SuperX switches because they permit consolidation of data, voice and video, which lowers costs and eases deployment and management of advanced triple-play services. Randolph Telephone, a cooperative in North Carolina, reports that it has implemented several FTTH projects in “edge-out” (nearby) areas, including one community where 35 of the 40-plus homes subscribe to fiber-based services. These builds were enabled by recent North Carolina state legislation allowing ILECs to bring broadband service to customers in nearby areas without forming a CLEC subsidiary. One neglected community had lobbied for service for years, signing petitions and writing letters to legislators. Once the new law passed, Randolph agreed to serve the community. Marketing director Aaryn Slafky recalls, “I drove door to door – we had a minimum to meet, but we gathered enough [preregistrations] to start construction. The incumbent followed behind us, and while we were plowing fiber, they put in DSL cabinets. We started up in October and finished the last installation last week, and I don’t believe the incumbent has DSL up and running yet. We’re able to bring the residents television [so they have] alternatives to satellite TV and WildBlue. … We’ve made some people very happy. One gas station was going to have to spend thousands of dollars on a new connection for the gas pump; now they can do it with a broadband connection, and they’re saving a lot of money.” Wabash Mutual Telephone, a subscriber-owned telephone company in west central Ohio, is deploying Occam Network’s FTTP equipment within and beyond its existing footprint. Wabash Mutual is completing a competitive FTTH overbuild that will include a series of 10 Gbps middle-mile transport rings feeding Gigabit Ethernet FTTH access nodes. The first of these rings already provides broadband connectivity to subscribers in rural communities. Liberty Communications in Iowa is celebrating its centennial year by installing fiber to the home in the cities of West Branch and West Liberty, at a cost of about $7.7 million. Upgrading

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to fiber, the company says, is more economical than trying to bring the copper network up to date; its new bundles will allow faster Internet speeds and multiple HDTV streams. Liberty reports, “We’ve completed the majority of the fiber-tothe-home construction project in West Liberty, moved all DTV customers from Myrio to Minerva [middleware], replaced all of the digital set-top boxes with new Entone and Amino boxes and launched HD and digital video recorder services along with online backup services.” During December, GVTC Communications extended its fiber-to-thehome network to 2,000 more residential lots across the Texas Hill Country and Far North San Antonio. More than 35,000 residential and business lots are now connected to GVTC’s all-fiber network. GVTC Communications has also added 15 new cable TV channels, including nine in high definition. FTTH deployer BTC Broadband in Oklahoma will use ViP-TV video transport services from EchoStar Satellite Services to receive transport of up to 49 high-definition channels to its IPTV headend. It will integrate the ViP-TV streams into the fs|cdn IPTV middleware solution from Conklin-Intracom. BTC Broadband has deployed fiber to the home to deliver video, voice and data services. “The new HDTV channels our customers will have access to as a result of this new relationship is key for our strategy of delivering the highest-quality services and content to our customers using the most current technology,” says Bob Rozell, chief financial officer and chief operating officer of BTC Broadband. Another provider to upgrade its IPTV service is SureWest Communications in California, which has launched its Advanced Digital TV service, powered by the Microsoft Mediaroom IPTV software platform, in the Sacramento region. The new service includes wholehome DVR, crystal-clear high definition, extremely fast channel change times and other new features. Steve Oldham, SureWest’s president and chief executive officer, says, “Just two weeks into our soft sales launch, and with the marketing campaign still forthcoming,

initial demand is already sizable. Our sales team is reporting a high level of excitement and sales results that are exceeding our expectations. Our voice and data customers have been excited about adding this new service, and we are also capturing brand-new customers due to its reliability and ease of use.” Cincinnati Bell selected Westell’s VersaLink 7501 Wi-Fi Gateway to provide in-home routing and home networking services for its Fioptics service, delivered over Cincinnati Bell’s fiber network. The gateway, designed to address the increased broadband networking demands of today’s highperformance Internet services, connects via Ethernet to Cincinnati Bell’s fiber optic service and distributes Internet connectivity throughout the customer’s premises via its integrated Wi-Fi access point. The VersaLink 7501 also provides advanced voice-over-wireless features that support the seamless delivery of voice services using Universal Mobile Access and dual-mode mobile handsets that include Wi-Fi. Richland-Grant Telephone Cooperative in Wisconsin initiated two large fiber projects in 2009 that will be completed this year. In the village of Soldiers Grove, road construction and bridge replacement projects required extensive changes in Richland-Grant’s plant; rather than replacing its copper plant in the areas affected by construction, the company decided to install fiber to customers’ homes and businesses. The second fiber project is in the village of Blue River, a more densely populated area where fiber is a cost-effective method for delivering services. Older copper feed cables in need of replacement and all drops to homes and businesses were changed to fiber. A third FTTH project, which will be started later this year, involves the relocation of the entire village of Gays Mills because of recurring floods. As the relocation involves all new construction, the cooperative says “it only makes sense to install fiber cable from the beginning.” Richland-Grant Telephone is working with village leaders and contractors as plans are formulated and construction begins. BBP

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Municipal Fiber

Three Municipalities Move Ahead With Citywide Fiber The city of Salisbury, N.C., selected Zhone Technologies’ MXK and zNID fiber-to-the-home solutions as the platforms for its municipal broadband initiative now under way. In addition, Ericsson will provide the IPTV technology for Salisbury’s deployment. Salisbury officials cite interactive HDTV, telemedicine, advanced emergency services and greater community cohesion as potential differentiators in attracting knowledge workers and seeding new business growth in the digital economy. “We don’t want to rely on the technology or timeline of existing carriers to meet our goals for a communications network that gives us a competitive advantage in attracting new businesses to our city,” says Mike Crowell, director of broadband services for Salisbury. Ketchikan Public Utilities Telecommunications Division (KPU) selected

Enablence technology for its FTTP rollout in Ketchikan, Alaska, a community of about 14,000. KPU, which currently operates a DSL network and has deployed FTTP on a trial basis since 2007, will now transition its network from DSL to fiber and offer high-speed voice, data and digital HDTV. Through a contract worth approximately $660,000 over the next three years, Enablence will provide its MAGNM-20 chassis for an active Ethernet network, along with indoor and outdoor versions of its E-1320 optical network terminal. Cedar Falls Utilities in Cedar Falls, Iowa, which has been building FTTP in new subdivisions since 2006, has launched a project to replace its citywide hybrid fiber-coax broadband network with FTTP over a six-year period. The city of Dover, Ohio, which provides fiber optic services to businesses

and is considering adding residential service, has received a completed design for an FTTH network from engineering firm Uptown Services. Uptown’s designs were delivered in late 2009 and presented to the city council in February. Dover has not yet committed to deploying fiber broadband to residences, but the completion of the detailed design is a critical milestone in its decision process. UTOPIA, a consortium of 16 Utah cities that operates an open-access fiberto-the-home network, announced that Voonami had become the eighth service provider on the network. Voonami, a cloud computing and data center solutions provider, will offer business voice, Internet and private networking services, including virtual desktop, managed services, dedicated servers, collocation and IT outsourcing services. BBP

Other Providers

Electric Cooperative Wins Stimulus Funds Ralls County Electric Cooperative in Missouri is the only nontelephone company in the most recent batch to receive stimulus funds from RUS for a last-mile project. Its $9.5 million grant and $9.5 million loan will provide a fiber optic network for residential and commercial members of the cooperative and for the underserved safety and anchor agencies in its service area. The cooperative plans to offer Internet access at speeds up to 20 Mbps downstream/10 Mbps upstream and automated meter reading. In addition, it is also considering providing high-definition television, telephone and security services. This project has been designated as a state of Missouri demonstration project,

and nonproprietary data will be shared. The cooperative is working with Pulse Broadband, a contractor that helps small operators deploy and manage advanced broadband networks. Pulse will use its proprietary optical tapping technology, which is also the basis of CommScope’s BrightPath solution. (For more details, see Optical Tapping in Rural Applications in this issue.) Case Western Reserve University announced a partnership with Genexis for its inner-city gigabit network. (See the January 2010 issue of BBP for a full description of this initiative, now called the Case Connection Zone.) Genexis will provide its 1 Gbps optical communication gateway to the Cleveland-based

initiative. Installed in the home, the gateway converts signals on optical fiber to in-home services including voice, television and Internet. Significantly for this project, the gateway can provide multiple services from a variety of providers at the same time. “Access to broadband communication is a necessity for fully engaged economic and social development,” says Lev Gonick, Case’s vice president for information technology services. “With a gigabit fiber network, communities can access services such as health care and e-learning and at the same time provide people with open access to the economic opportunities that the Internet enables. This combination of strengthening the

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community structure and providing people with a superhighway to the digital world is vital to improving lives in American cities. “In the end, communications and Internet is not about just technology; it is about people,” Gonick continues. “Genexis has understood this very well and has developed products for the home that

enable people to use the full potential of broadband in a simple and user-friendly way. In addition, the gateway is power-efficient and installer-friendly, a key factor when installing fiber in urban areas.” Novus Entertainment, a Vancouver broadband provider, is now offering the fastest Internet speeds in Canada – 200 Mbps over a fiber-to-the-building

network. Offerings include a 200 Mbps symmetrical service for home businesses and an asymmetrical residential service. With the stated vision of becoming one of Metro Vancouver’s major communications service providers, Novus is continuing to expand services in Vancouver and Burnaby and plans to launch services in Richmond in 2010. BBP

Google To Build FTTH Networks A search engine … an advertising platform … a leader in cloud computing … a supplier of desktop software … a smart-phone vendor … and now a fiber-to-the-home deployer. Google continues to evolve its corporate identity in new and unexpected ways. The technology giant says it plans to build and test ultra-high-speed broadband networks in a small number of trial locations across the United States, delivering Internet speeds of 1 Gbps over fiber-to-the-home connections. It will offer services at a competitive price to “at least 50,000 and potentially up to 500,000 people.” Locations for Google’s networks will be selected from communities that respond to the company’s request for information by March 26. Municipal officials, broadband activists and ordinary residents are encouraged to nominate their communities as candidates for Google FTTH networks. Google’s stated goal is to experiment with new ways to help make Internet access better and faster for everyone, including • next-generation apps • new deployment techniques • openness and choice. Consistent with its past advocacy of net neutrality, Google says it will operate an open-access network and manage it in an open, nondiscriminatory and transparent way. Can the experiment work? Other open-access network deployers in the United States have had difficulty

attracting service providers to their networks. Some of these deployers have resorted to providing services themselves; of those prohibited from doing so, some have faltered when their service providers could not meet customers’ expectations. In part, this is an issue of scale: Open-access FTTH networks generally have not been large enough to attract established service providers. For example, although large, nonfacilities-based ISPs such as EarthLink and Covad have publicly called for the Federal Communications Commission to unbundle FTTH networks, they do not provide services on open-access FTTH networks, such as UTOPIA. Nor have open-access networks attracted nontraditional providers willing to experiment with next-generation apps. This suggests that Google may need to scale its network at the high end of, or even beyond, its stated plans if it is to achieve the effects it hopes for. Will the experiment push public policy toward requiring more open access in broadband networks? “If new applications and new business models arise out of the experiment, that gives [Google] an arrow to shoot to the FCC,” comments Occam Networks’ marketing director, Juan Vela. “Google has a couple of years to get the experiment proven in. The current administration is willing to look at open models. If it makes sense for the economy and for businesses as a whole, they will support it. If it fails miserably, that could be the end of it.”

RBOC UPDATE

FiOS Deployment Speeds Up; Customer Acquisition Slows Down FiOS Internet and FiOS TV each added 153,000 net customers in the fourth quarter of 2009 ­– only about half the number added in the second quarter, according to Verizon’s most recent fi-

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nancial report. These additions brought the total at year-end to 3.4 million total FiOS Internet customers and 2.9 million total FiOS TV customers. FiOS penetration (customers as a per-

centage of potential customers) has been increasing steadily. Internet penetration was 28.1 percent by the end of the fourth quarter, with the product available for sale to 12.2 million premises, compared

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with 24.9 percent penetration and 10.0 million premises open for sale at the end of the fourth quarter 2008. FiOS TV penetration was 24.5 percent by the end of the fourth quarter, with the product available for sale to 11.7 million premises, compared with 20.8 percent penetration and 9.2 million premises open for sale at the end of the fourth quarter 2008. This slowdown in new customers, coupled with increases in penetration, would seem to imply that network construction has slowed. However, 900,000 homes were passed in the fourth quarter, a much higher number than in any recent period. As of the end of 2009, the FiOS network passed 15.4 million premises, up from 14.5 million at the end of the third quarter and 400,000 ahead of the planned total. Verizon has not yet begun marketing services to more than 3 million of the homes it has passed with fiber – and it is continuing to build out the network faster than it can bring serAMT 28075 CED Magazine:AMT 27603 vices to market.

Verizon is aiming for 40 percent FiOS TV penetration, compared with today’s 24.5 percent. The service is still new in much of the FiOS footprint, and take rates rise over time. New York City is one place Verizon is marketing FiOS intensively. “Rollout of FiOS TV is on the fast track in the city,” says Christopher Creager, president of Verizon’s Northeast region. In 2009, the company expanded FiOS service into an additional 140 New York City neighborhoods, located throughout the five boroughs, bringing its fiber optic network to a total of about 810,000 households. And FiOS TV is expected to be available in parts of dozens more neighborhoods by the end of this year. Average revenue per user (ARPU) for FiOS users is more than $140, nearly 2/9/10 10:23 AM Page 1 double Verizon’s overall wireline ARPU

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of $77. Consumer ARPU overall grew by 12.6 percent from the fourth quarter of 2008. At a recent investor conference in San Francisco, Verizon CEO Ivan Seidenberg said FiOS was close to becoming operating-income positive in 2009, and could become net positive in 2010. He also announced a goal of 40 percent penetration for FiOS TV – a long way from today’s 24.5 percent. Taking advantage of GPON’s capacity, Verizon added a new 35 Mbps symmetrical Internet service tier for both consumers and small businesses. This tier is designed to enable videocon-

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Deployer Spotlight States with deployments referenced in this article

Alaska

North American Telcos

NTELOS

www.ntelos.com

CA, IA, VA, KS, TN, LA, ND, OR, OK, TX, NC, Richland-Grant Telephone Cooperative OH, ID, WI, MN, AK, UT, MO, Rural Telephone Service

AT&T www.att.com Audeamus/ Sebastian Enterprises www.sebastiancorp.com BEK Communications Cooperative www.bektel.com Bell Aliant www.aliant.ca Bell Canada www.bell.ca BTC Broadband www.btcbroadband.com C-M-L Telephone Cooperative Association www.netins.net/ ricweb/telco/cml.htm Cincinnati Bell www.cincinnatibell.com Etex www.etex.net F & B Communications www.fbc.bz Gervais Telephone Company www.gervaistel.com GVTC Communications www.gvtc.com Halstad Telephone Company www.halstadtel.com Liberty Communications www.lcom.net Medicine Park Telephone Company www.medicinepark.com MTS www.mts.ca North Central Telephone Cooperative www.nctc.com Northeast Louisiana Telephone Company www.northeasttel.com

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Randolph Telephone

Company/Nex-Tech SureWest Communications Syringa Networks Velocity Telephone Verizon Communications Wabash Mutual Telephone

www.rtmc.net www.rgtelecom.com

www.ruraltelephone.com www.surewest.com www.syringanetworks.net www.velocitytelephone.com www.verizon.com www.wabashtelephone.com

Other North American Deployers Case Western Reserve University Cedar Falls Utilities Dover, Ohio (city) Google

www.case.edu www.cfu.net www.dovertechnology.com www.google.com

Ketchikan Public Utilities Telecommunications www.kpunet.net Novus Entertainment

www.novusnow.ca

Ralls County Electric Cooperative www.rallscountyelectric.com Salisbury, N.C. (city) UTOPIA

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www.ci.salisbury.nc.us www.utopianet.org

ferencing, working at home, online multiplayer gaming, telemedicine, electronic home-energy and security monitoring and data transfer ­– and to help small businesses look as if they have the IT capabilities of Fortune 500 businesses. The company adds, “And, unlike some providers, Verizon does not penalize customers for using all the speed they need.” U-verse Voice Reaches the 1 Million Mark AT&T announced that it now serves 1 million AT&T U-verse Voice digital home phone lines. The milestone comes two years after AT&T introduced the advanced VoIP service, which is now available to millions of homes across 22 states. U-verse Voice is delivered over the AT&T U-verse network. The company says more than 67 percent of new U-verse TV customers bundle the voice service, more than 90 percent of Uverse TV customers bundle high-speed Internet and more than 75 percent of U-verse TV customers have a triple or quad play. AT&T added 248,000 U-verse TV subscribers in the fourth quarter of 2009, totaling 2.1 million U-verse TV subscribers nationwide, and added 1 million U-verse TV customers in the last year alone. Canadian Incumbents Roll Out Fiber Canadian ILECs announced several major FTTH projects. New Brunswick: Bell Aliant launched its FibreOP FTTH services in two New Brunswick communities last year and is now accelerating its deployment. In 2010, the company will more than double its 2009 spending on fiber technology to pass 140,000 homes with fiber by the end of the year. CEO Karen Sheriff says, “With this investment, we are accelerating and leveraging our natural assets of aerial footprint and low-density geography to invest for the future. We expect to continue to gain efficiencies in our capital program, and this, in combination with the completion of a significant capital project in 2009, will allow us to advance our fiber network this year without increasing our overall capital spending from 2009 levels.” She adds, “Having access to the fastest and most innovative technology will undoubtedly help New Brunswick attract and retain new and existing talent in the near future, furthering the goal of economic prosperity provincewide.” By end of 2010, Bell Aliant will have invested $80 million to bring FibreOP technology, with 60 Mbps/15 Mbps Internet speeds, to 35 percent of homes and business in New Brunswick. By mid-2011, it expects to extend the service to 45 percent of homes and businesses in the province. Manitoba: MTS has launched FTTH services in Waverly West, a large new housing development in Winnipeg. The company is delivering triple-play services with Internet speeds of up to 25 Mbps and potential for future speeds above 100 Mbps. MTS president Kelvin Shepherd says that, although MTS’ existing VDSL network provides excellent services today, “over the long term, customers will be looking for home services that

need increased bandwidth, and MTS will be in a position to meet that demand with our new fiber-to-the-home network.” Through 2010, MTS will begin using FTTH to serve a majority of new housing developments in Winnipeg; it also expects to deploy fiber to existing customers in a smaller community outside Winnipeg. Overall, MTS expects approximately 500 homes to receive FTTH services in 2010. Ontario and Québec: Bell Canada is deploying FTTH in Québec City and in new housing developments throughout Ontario and Québec. It announced a three-year plan to deploy fiber in multiple communities across the Québec City region and offer Internet download speeds of at least 100 Mbps and upload speeds of at least 20 Mbps to both consumers and businesses. Bell says its Québec initiative is by far the largest citywide FTTH rollout in the country. Because the Québec City region is served largely by aerial infrastructure, these extensive fiber deployments can be accomplished much faster and more economically than in cities with underground infrastructure. Bell also announced that it will deploy FTTH in all new urban and suburban housing developments in Ontario and Québec beginning in the second half of 2010. This is in addition to the company’s deployment of FTTB already under way, which will deliver 60 Mbps service to approximately 1,600 condominium and apartment buildings in Ontario and Québec by the end of 2012. BBP

Private Broadband Communications, LLC

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INTERNATIONAL DEPLOYMENTS

Fiber in Latin America Grupo Cable Sula, Honduras’ secondlargest cable operator, is deploying a new fiber-based broadband network to 5,000 business customers over the next two to three years. Already a user of Enablence’s TRIDENT7 Compact OLT, Grupo Cable Sula turned again to Enablence to expand its offering to business customers. Under the brand FiberLink Pymes, Grupo Cable Sula is rolling out new service packages to small- and medium-sized businesses that include Internet access at speeds of up to 10 Mbps, two dedicated phone lines, optional analog or digital TV service and a corporate data link at speeds of up to 100 Mbps. Grupo Cable Sula purchased Enablence’s TRIDENT7 Universal Access Platform, optical line terminal, optical networking terminals and the Element Management Suite to support this deployment. Jorge Canahuati Hoch, CEO of Grupo Cable Sula, says, “The TRIDENT7 has allowed us to leap past our competitors and capture an untapped market opportunity with a fiber network that is far more secure, reliable and faster than cable modem, DSL or wireless. Deploying this kind of network gives us a leadership position in the Central American telecommunications industry.” Brazilian service provider Desktop selected Zhone’s MXK multiservice access platform and zNID optical network terminals for its GPON expansion into São Paulo. Desktop’s choice of GPON is a response to customer demand for higher speed and premium services with flexible pricing. Future-proof bandwidth capacity, lower total cost of ownership and robust platform design all factored into Desktop’s selection of the Zhone platform. Desktop currently provides VoIP and data services to the eight cities in the state of São Paulo and plans to add GPON services, expanding into neighboring cities by mid 2010. After selecting Zhone for its own deployment, Desktop recommended

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The French government is providing $2.7 billion to subsidize the buildout of fiber to the home in rural areas of France. Zhone to Sigmanet, a neighboring wireless service provider that was planning to deliver FTTH services in Campinas Brazil, a city of 1.1 million and major telecommunications hub for the state of São Paulo. Sigmanet will now use terabit-scale FTTH platforms and optical network terminals from Zhone to provide VoIP, HDTV and ultra-highspeed data to corporate, residential and multitenant unit customers throughout the city. “Growing from an all-wireless network to a fiber network with the highest capacity platforms available not only expands our service model, but it represents an extraordinary expansion in the way we view our possibilities as a company,” says Mucio Camargo de Assis Filho, administrative director for Sigmanet. BT: To Infinity and Beyond The retail arm of British incumbent BT launched its new fiber-based broadband service, BT Infinity. The new consumer service, delivered over fiber to the cabinet and fiber to the home, offers download speeds of up to 40 Mbps for as little as $31 per month. Upstream speeds will be the fastest in the UK, reaching speeds of 10 Mbps. Business services will offer the same speeds as consumer services, for somewhat higher prices; the extra charge ensures that business traffic will receive priority at times of contention. These services will be available to 4 million homes and businesses by the end of December 2010 and to 10 million premises by mid-2012. In Manchester, U.K., the Manchester Digital Development Agency (MDDA) engaged Geo, a firm that designs and builds fiber networks, to install fiber optic infrastructure in the high-tech

business area of the city known as the Corridor. Households and businesses will be able to purchase services over the 100 Mbps open-access network. (MDDA’s announcement adds, somewhat mysteriously, “There is also potential for services and applications to be made available for free without having to go through an Internet service provider.”) The project’s initial phase, which starts this spring, will provide connectivity to 200 homes and businesses around the Corridor area. Connections to an additional 1,500 homes and businesses will be phased in over the next 12 months. In France, Prime Minister Francois Fillon said the government would provide telcos with €2 billion ($2.7 billion) to accelerate FTTH deployment in the less densely populated areas of France. The plan follows the European Commission guidelines on state aid for broadband deployment. According to Marcela Perez Sirio of research firm Ovum, by mid-2010, operators should have the regulatory clarity they need to invest in both the densely and less densely populated areas of France. Additional details on the greenfield fiber project in Gelsenkirchen, Germany, mentioned in BBP’s November/ December issue: This network, built in the housing development of Wohnen am Bachlauf by municipal utility GelsenNet, is based on GPON technology from Alcatel-Lucent. Alcatel-Lucent also managed the network installation and integration and will support the maintenance of the network. Alcatel-Lucent installed its 7342 ISAM FTTU optical access platform, its 5520 AMS access network management software and its latest generation of optical modems.

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Deployer Spotlight Norway United Kingdom Netherlands

Canada

Lithuania

Germany France Switzerland Turkey

International deployment activity India

Honduras

Malaysia

Brazil

International Deployers BSNL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.bsnl.co.in BT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.bt.com Desktop. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.desktop.com.br Gelsen-Net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.gelsen-net.de Grupo Cable Sula Manchester Digital Development Agency. . . . . . . . . . www.manchesterdda.com Norsk Fibernett. . . . . . . . . . . . . . . . . . . . . . . . . . . . . norskfibernett.no

Jürgen Katzer, vice president of sales and carrier account manager for AlcatelLucent in Germany, explains, “The Ruhr area has one of the highest population densities in Europe. Next-generation access networks are particularly effective in such settings, and so the Gelsen-Net GPON network is a lighthouse project for the region as a whole. Gelsen-Net is performing first-class pioneering work to enhance the attractiveness of the new housing estate.” Residents of the new development have access to a triple-play offer that includes an Internet connection of 100 Mbps downstream/10 Mbps upstream, analog and digital telephony services and video. 200 Mbps Is the New 100 Mbps Zeewolde will be the first town in the Netherlands with symmetrical Internet

Reggefiber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.reggefiber.com Sigmanet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.sigmanet.com.br Superonline . . . . . . . . . . . . . . . . . . . . . . . . . . . www.superonline.com Swisscom. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.swisscom.ch TEO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .www.teo.lt/en TIME dotCom. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.time.com.my

speeds of 200 Mbps, according to vendors Cisco and Genexis. FTTH operator Reggefiber is deploying the fiber optic network, Internet provider XMS will offer services, and Cisco and Genexis have been selected to supply the equipment. As demand grows, the bandwidth can easily be increased to 1 Gbps. Cisco will supply its 7609 routers for the central office and its Catalyst 4506 switches for distributing broadband Internet signal to homes in Zeewolde, and Genexis, a Netherlands-based company, will supply gigabit home gateways. Peter Kamphuis, Reggefiber’s director of operations, views the launch of the 1 Gbps network as the first step toward a new standard in FTTH networks, saying, “1 Gbps equipment will replace the current 100 Mbps equipment.” Before the end of this year, Reggefiber plans

to upgrade its other FTTH networks to the new standard and to introduce 200 Mbps symmetrical service. TEO, the largest integrated telecom provider in Lithuania, announced its new ZEBRA Internet plan, which offers residential customers up to 200 Mbps Internet access services. TEO is deploying fiber at a rapid pace; its fiber optic access network currently operates in more than 30 Lithuanian cities and is available to nearly one-third of the country’s residents. More than 62,000 customers are using FTTH-based services today, and TEO expects this number to exceed 100,000 by year-end. Norsk Fibernett, an association of several fiber networks in Norway, provides broadband over open-access networks to about 4,000 customers in Oslo, Bergen and five other cities. To

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consolidate these networks, Norsk Fibernett will use PacketFront’s BECS provisioning and control system, ASR routers and DRG customer-premises equipment. NetNordic, PacketFront’s Norwegian partner, will deliver and implement the solution under a three-year contract. Norsk Fibernett will extend its newly consolidated network with several thousand connections per year and plans to continue building out regional fiber networks throughout Norway. Fiber to Every Swiss Household Swiss incumbent telco Swisscom is rolling out FTTH services to every household in Switzerland. As of last September, the company had 1.8 million broadband subscribers. Swisscom will use Cisco’s ASR 9000 series aggregation services router as the edge platform, citing its ability to support the simultaneous use of three high-definition television channels, Internet connections of 50 Mbps downstream/5 Mbps upstream

and telephone services. Chief technology officer Guido Garrone says that, in addition to providing the capacity for network bandwidth growth and quality of service, the Cisco router also helps simplify network operations. Superonline, a subsidiary of Turkish telecom provider Turkcell, is deploying a fiber-to-the-building network with a 100 Mbps Ethernet connection to each home. Superonline is using a solution from Ericsson and Tilgin to provide high-speed Internet connections and IMS-based IP telephony. Tilgin will provide home gateways and software for the first phase of Superonline’s project, which will pass some 300,000 homes with fiber during 2010. Local implementation will be managed by Ericsson and Tilgin, together with Superonline’s staff. Indian state-owned telecom provider BSNL launched its first FTTH service in Jaipur, using technology from fiber cable supplier Aksh Optifibre. BSNL will provide multiplay services with high-definition content and 100 Mbps

Internet access to more than 30,000 customers in Jaipur and will eventually bring FTTH to its 8 million customers across the state. In Malaysia, competitive provider TIME dotCom (TdC) launched TIME Fibre Broadband, an FTTH-based Internet access service offering speeds of up to 50 Mbps. Launching the new service, TdC’s CEO Afzal Abdul Rahim said TdC is the only telecommunications provider in Malaysia offering 100percent fiber optic connection to the home. “TIME Fibre Broadband is the answer to the long-awaited needs of Malaysian Internet users, providing the highest speed and bandwidth capacity available in Malaysia,” Afzal said as he demonstrated the capabilities of the new service by performing multiple video calls, streaming HD content, downloading multiple HD movie trailers and playing a game online. The service is currently available in Mont Kiara, with coverage expanding over the next few months in the Klang Valley area. BBP

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800.422.2537

On Twitter @Danceswithfiber

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Forty 57 at Glasford, Lexington, Ky.

By Joe Bousquin ■ Contributing Editor, Broadband Properties

This month’s showcased property is Forty 57 at Glasford, a greenfield development built by Ball Homes with a fiber network deployed by Windstream Communications. Our thanks to Lance Smith, Windstream’s national sales manager, and Brandon Buffin, Ball Homes’ director of information technology, for their time and help preparing this article.

W

hen Ball Homes of Lexington, Ky., started building Forty 57, a 360-unit luxury apartment community just southeast of downtown Lexington and the University of Kentucky, it needed an edge for today and the future. With the first units coming online in May 2009, the developer was not only leasing a greenfield development in the midst of the Great Recession but also offering a higher-end product for a sophisticated demographic at a time when doubling and tripling up had suddenly come back into vogue. To add value to its offering and ensure that the community stayed on the cutting edge of technology for the foreseeable future, Ball Homes partnered with Little Rock, Ark.-based Windstream Communications, an S&P 500 company that provides broadband, video and voice services to largely rural communities throughout the Southeast, the Midwest, Texas and New Mexico. A Tier 2 incumbent local exchange carrier (ILEC), Windstream

was actively trying to expand its broadband and video service offerings, via fiber, to the apartment market and had recently developed a team internally to pursue those opportunities. After negotiating with Ball a bulk subscription deal for residents, Windstream deployed a GPON fiber-to-theunit network at the community to light up a triple-play offering of voice, video and data, including dedicated 911 connectivity through a Calix C7 multiservice access platform (MSAP) at the headend. Now, for $89 a month, residents can enjoy a take-if-you-want base programming package that includes

Preview

12 Mbps data speeds; 60 channels of DISH Network programming, including HBO; and incoming terrestrial phone service plus 911 over traditional POTS lines. The owner says it now has the first fiber-to-the-unit MDU in the Lexington market. For an easy-tounderstand description of how this network runs inside the community, see the technical section below. Although Ball Homes thought an optional amenity would be more palatable during tight times, Windstream has seen nearly a 100 percent take rate from residents who have moved into the first phase of the project, and occu-

Joe Bousquin will moderate a session at the Broadband Properties Summit featuring several Properties of the Month.

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listed among BUILDER magazine’s top 100 builders in the nation. Windstream Corporation is an S&P 500 company that provides phone, high-speed Internet and high-definition digital TV services to customers in 16 states. The company has approximately 3 million access lines and about $3.1 billion in annual revenues. Greenfield or retrofit: Greenfield High-rise/mid-rise/garden style? Garden style Number of units: 360 Percent of units occupied: 75 percent as of January 2010 Date services started being delivered: May 2, 2009 The headend for the system is located in the property’s communications room, which is housed in a garage unit adjacent to one of the buildings.

pancy is nearing 75 percent after nine months. says Brandon Buffin, Ball’s director of information technology. He adds, “Residents like it because it takes care of rent, TV and Internet with one check. They’re also getting higher-speed Internet than they’ll get elsewhere, and we’re charging them less per month than they would normally pay for high-speed Internet and video combined.” Throw in the incoming telephony service, plus outgoing 911 capability, and Forty 57 has amenities that go beyond the pool, gym and community lounge. “By going with fiber, we’re at the top of the game here locally while future-proofing the property for the foreseeable future,” Buffin says. “It’s been quite a positive.” Vital Stats Forty 57 at Glasford is a new, 360-unit upscale apartment community located in Lexington, Ky., home to the University of Kentucky, Keeneland Racetrack and some of the most beautiful horse farms in the world. Forty 57 features two pools, a fitness center, a centralized business center, a clubhouse movie theater and fiber optic connectivity to every unit. Forty 57 offers one-, two- and three-bedroom units that feature nine-

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foot ceilings, roman tubs and enhanced lighting and fixtures. Each unit also features a centralized wiring panel for inunit wiring to provide high-speed connectivity at several wall jack locations within each apartment home. Forty 57 was developed by the Ball family of Lexington, Ky. Ball Homes is a family-owned, second-generation regional developer and builder of residential and commercial properties throughout Kentucky. Ball Homes is consistently

Technology How does fiber get to the property? Windstream extended an existing fiber loop that was close to the project to a digital loop carrier at the edge of the property and then to the property’s communications room, which is housed in a garage unit adjacent to one of the buildings. How is fiber distributed inside the property? The fiber connects to a Calix C7 multiservice access platform inside the property’s communications room. The C7 is equipped with GPON optical line terminals (OLTs)

Property of the Month Highlights • • • • •

First MDU in Lexington offering fiber to the apartment Optional triple-play package starts at $89, paid with rent DISH Network programming Nearly 100 percent take rate Aesthetic appeal of in-unit wiring panels and out-of-sight satellite dishes

Provider – Windstream Communications Developer/Builder – Ball Homes FTTH electronics – Calix C7 MSAP with GPON OLTs and ONTs Fiber distribution and drop cables – ADC Headend and set-top boxes – DISH Network Other equipment – Cisco/Scientific Atlanta, Blonder Tongue

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supporting a passive optical network of single-fiber strands running to each building. Leaving the Calix C7, the fiber enters a passive wave division multiplexer optical coupler. There, the video programming from DISH Network’s radio-frequency coaxial cable headend is converted to an optical signal, amplified and added to the optical path, where it rides on its own unique optical wavelength – a different color of light – separate from voice and broadband. The fiber strand, now carrying voice, broadband and video, exits the equipment room and terminates in a housing mounted on the outside wall of each apartment building. Inside that housing, a 1 x 32 optical splitter divides the signal into 32 separate signals. Each of the 32 signals continues on its own dedicated, connectorized fiber drop – a single strand of reduced-bend-radius, riserrated, preconnectorized ADC RealFLEX Drop Cables. Ball Homes ran a 2-inch conduit from the outside wall of each building to pull boxes located in the property’s attics. From each attic pull box, a 1-inch conduit runs to the structured wiring cabinet inside each living unit.

The structured wiring cabinet in each unit holds the optical network terminal, battery backup and router to distribute voice, video and data signals to jacks throughout the living area.

When the conduit path was in place, Windstream pulled the fiber drops from the side of each building up into the attics and then down through the conduit system to each living unit. Each living unit has a Calix 700G-series optical network terminal (ONT) that converts the optical signals back to electrical signals, with outputs consisting of a co-

axial cable F-connector (video), terminals for analog voice, and RJ-45 for broadband. Each of these signals then connects to several jacks located throughout the living area. What other type of gear is used? • Cisco-Scientific Atlanta Prisma II for the video laser and erbium-doped fiber (EDFA) amplifiers. • ADC fiber cabinets and terminals, optical combiners and optical splitters. • Blonder Tongue video processing equipment (modulators, transcoders and combiners). • Integrated receiver decoders and set-top boxes from EchoStar-DISH Network. How did you deal with wiring and plug access within the units? Each room in each apartment has an outlet with service for Ethernet, phone and cable. The router itself is located inside the wiring panel, and electrical outlets for the ONTs were installed during construction. In addition, Windstream maintains a battery backup inside the panel.

A drop cable runs from the pull box in the attic of each building to the structured wiring cabinet in each unit.

Have you provided wireless signals within units? No.

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How much square footage did you have to dedicate to the network inside the building? The ADC 1 x 32 splitter panels are located in the main utility closets at each building. Ball Homes provided a garage unit to house Windstream’s headend and other necessary electronic equipment. Services Does the property have triple-play services? Yes. Windstream provides voice, video and high-speed Internet over the fiber. While 12 Mbps broadband speeds are offered in the base package, residents can receive higher speeds for an additional fee, up to 24 Mbps. Residents can also access DISH Network domestic and international programming, and can purchase additional, upgraded programming as well. Are there amenities beyond the triple play? Wi-Fi service, provided by Windstream, is available in the clubhouse and theater room. Do residents have a choice of service providers? No. Who provides support? If residents have an issue or a technical challenge, whom do they call? Windstream supports the entire network. Residents call Windstream’s call and support center to resolve any issues.

Satellite video signals are fed into the optical network and delivered on a dedicated wavelength over fiber. Hiding the dishes behind a building is more attractive than placing them on balconies.

hear people within the industry talk about door fees being a thing of the past. While there are creative ways to set up deals so that you don’t have a door fee, they’re still pretty prevalent in the marketplace. Are services automatically included in the rent? Services are not automatically included in the rent, but for a broken-out fee of $89 a month, Forty 57 offers its residents a bulk voice, video and data package with 60 channels of premium programming from DISH Network, including local

channels and HBO, 12 Mbps highspeed Internet and voice service with free incoming calls, toll-free access and dedicated 911 service. Who handles billing and collection? Residents who subscribe to the base package pay the monthly fee directly to Forty 57 with their rent each month. Any upgrades are provisioned and billed by Windstream directly to the end user. How are the services marketed, and by whom? Forty 57 and Windstream

Business Who owns the network? Does the property owner have “skin in the game”? Who paid for what? Ball Homes provided the equipment room location and in-unit wiring enclosures, and ran conduit inside all the buildings. Windstream provided the headend gear, network fiber, switches, ONTs and routers. Was there a door fee? Yes, Windstream paid Ball Homes a confidential door fee. Lance Smith, Windstream: When you go up against the cable guys in these markets, you’ve got to be willing to be competitive, and that often means offering a door fee. Sometimes, you’ll

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ADC equipment distributes fiber from the headend to the individual living units.

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market the bulk and incremental services together. What has the return been on this implementation, in dollars or otherwise? Brandon Buffin, Ball Homes: There is definitely a market advantage to being the first MDU in Lexington to offer fiber to the apartment, higher broadband speeds than are available at competing properties, Windstream services and DISH Network programming. As a plus in terms of aesthetics at the property, residents get access to a wide variety of programming without placing dishes on balconies. Lance Smith: We wanted to expand in the Lexington market. This deployment helped us do that, but it also allowed Windstream to gain market leverage in the area by partnering with such a well-known and respected leader as Ball Homes. We also feel this deployment illustrates our long-term commitment to the future broadband and entertainment needs of our customers. Onsite Experience/ Lessons Learned What was the biggest challenge? Brandon Buffin: Making the decision to use just one provider at our property, and then packaging the bulk offering in a compelling way. In the past, we had encountered challenges coordinating with various service providers at some of our other properties. It took someone like Windstream, which hasn’t done a lot with MDUs in Lexington but had an impressive track record in other markets, to come in here and show us what they could do for us to be comfortable. We were impressed with their forward thinking in regard to providing fiber to the unit, as well as their price points. That’s what got us here. Lance Smith: When a property from someone with the name of a Ball Homes is coming out of the ground, you’re obviously going to have to compete to get in the door. In that environment, the main challenge was reaching a mutually beneficial agreement that was also competitive,

and then finding the right product mix to include in the bulk offer. What was the biggest success? Brandon Buffin: Being able to offer superior technology over our competition while giving our residents the convenience of writing one check for their rent, Internet and entertainment choices each month. It’s been quite a positive. Lance Smith: We really see this as a great opportunity to gain traction in an expanding market by partnering with a local leader like Ball Homes and showcasing Windstream’s communications and entertainment expertise, using the latest fiber technology. What would you say to owners who want to deploy a similar network? What issues should they consider before they get started? Brandon Buffin: Look at current market trends in technology, such as broadband speeds, fiber availability and future capacity to make sure your current investment will be viable for the foreseeable future. Lance Smith: Make sure you are working with a provider that is capable

of delivery, is financially sound and will be there for you in the future. Especially in this environment, it’s important to partner with someone who has the financial resources to stick by you for the long haul. How did the vendor interact with residents during installation? Were there any guidelines or requests from the owner over limiting residents’ pain points during installation? Brandon Buffin: Installation was handled during construction, so residents were never impacted. That said, the fiber panels inside the units have a nice, clean look that’s very attractive. What is the property manager’s perspective on this installation? Has it been a success? What has been the response from residents? Brandon Buffin: We and our residents are pleased with the clean look of the fiber panels inside the apartments. Having the ability to provide higher broadband speeds than the competition and offer DISH Network programming has also been a plus. BBP

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Broadband Policy

Exclusive Interview: Adelstein Sharpens Focus On Rural Broadband Former Rural Utilities Service chief Hilda Legg talks with Jonathan Adelstein, the agency’s current head, about the challenges of bringing broadband to rural America. By Hilda Gay Legg ■ Broadband Properties

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onathan S. Adelstein is the 17th administrator of the USDA’s Rural Utilities Service. He came to RUS by way of the Federal Communications Commission. From 2002 to 2009, as an FCC commissioner, he sought to secure access to communications for everyone, including those left behind by the market. Adelstein has proven to be a strong advocate for improving rural telecommunications and broadband, both for economic development and for quality of life. He has long pushed for an activist national broadband strategy with aggressive goals and specific policy recommendations. As a senior legislative aide to then Senate Majority Leader Tom Daschle (D-S.D.), he was a key staff architect of the provisions in the 2002 Farm Bill expanding the authority of the RUS to finance broadband services. Prior to his federal service, Adelstein was a teaching fellow in the Department of History at Harvard while studying at the Harvard Kennedy School of Government. He received an M.A. in history and a B.A. with distinction in political science from Stanford. • • • • • Hilda Legg: Jonathan, you have served rural America in many capacities throughout your career; why did you want this job as administrator of the Rural Utilities Service at the USDA? Jonathan Adelstein: This job represents a wonderful opportunity to

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Preview

Jonathan Adelstein will deliver a keynote address at the Broadband Properties Summit in Dallas, April 26–28.

meet the basic needs of people in rural America in their quest for a healthy environment, clean water, electricity, broadband – all of which are fundamental to the quality of life. They affect people’s lives very directly. RUS has a way of not only making the day-to-day lives of rural Americans better but also making sure that rural America has the infrastructure it needs to reach its maximum potential for economic development and its contribution to the country’s overall economic growth. HL: I know you will do really well with this because you have the background for it. Just for the record, I think it’s the best job in town. I share your passion for it. Now there

is $7.2 billion in broadband stimulus money (ARRA) – $2.5 billion of it to be distributed by RUS – which is a blessing but also a challenge in terms of managing that amount of money. Now that you have been here almost a year, what would you say are the one or two biggest challenges you face as administrator, with regard to broadband issues? JA: The biggest challenge is making sure that all the broadband service is every bit as good in rural America as it is in the rest of the country. People need mobile broadband, they need highbandwidth broadband – and not just enough to get by, but sufficient for rural economic development. The Recovery Act focuses on our need to develop economically.

About the Author A prominent broadband advocate and champion, Hilda Gay Legg served as the 15th administrator of the Rural Utilities Service. She is also vice chair of Broadband Properties Magazine. You can reach her at [email protected].

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Broadband Policy

Administrator Adelstein says unserved areas should receive the highest levels of broadband funding.

Businesses need higher levels of bandwidth. Larger properties need higher bandwidth. It’s not enough to just say it is a matter of having 768 Kbps. That’s good and we can’t have any place without it, but if you’re trying to do business and new applications, you need to upload a lot of data. You need to be able to have people get into their work and to quickly do whatever transactions they want to do, which means you need to get access and move large amounts of information. If your upload speed is slow, then there’s a constriction on your ability to attract interest in whatever business you might have, so you can’t locate in a rural area. Not only do we need broadband out there, but we also have to make sure we have highquality broadband available. HL: Is that reflected by the change from the first Notice of Funding Availability (NOFA) under the stimulus act to the second, where you raised the definition of broadband that facilitates rural economic development from 768 Kbps (downstream) to 5 Mbps (upstream plus downstream)? JA: Well, both NOFAs gave higher priority to higher broadband, both wireline and wireless broadband. For the

second one, we expanded the definition of areas we thought needed broadband, to where half the population doesn’t have 5 Mbps up and down. We think 5 Mbps at this point in time is basic for rural America. We want to see that increase over time. For now, we’re trying to push the envelope a little. Let’s try to prove what we’re doing is worthwhile and make sure the investments we’re making will continue to contribute to economic growth for years to come. We can’t allow a digital divide in rural America.

HL: I think you’re so on target with that. I know NTIA is focusing on community anchor institutions, library connections, and so forth, but at RUS you’re really about building the broadband infrastructure all the way to the individual households. What’s most important? Is it getting high speed, big pipes into the communities, or is it getting those individual homes connected? Or should we do it simultaneously?

JA: Both middle-mile and last-mile broadband are really critical overall. If you don’t have middle-mile connections, the last mile ultimately won’t be as fast, even if you use fiber. So both are important. Our expertise at RUS is in getting the broadband directly to the end-user customers. For 60 years at RUS, we’ve shown incredible success in financing telephone service and, now, broadband. We know how to do it. We know how to evaluate a business. The highest priorities are the areas that don’t have any service now. There are those areas where there may be economic challenges like high unemployment and a poor infrastructure. We’re targeting those areas for the highest level of funding. In the second round, we hope to see some great applications in those areas. Part of the problem is that the areas that need the help the least are the ones that are in a position to ask for help more often. The needy areas often face multiple challenges and may not see the opportunity that the stimulus package provides for them. If they miss this opportunity, there may not be another one coming. We are doing extensive outreach so we can attract a lot of applications from the most difficult-to-serve areas.

RUS Administrator Jonathan Adelstein talks with a predecessor, Hilda Gay Legg.

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Broadband Policy We are very carefully selecting projects that are feasible in the long term. The true test of our success will be whether the funded entities survive and thrive once the funds are gone. HL: We at BBP certainly hope you can, too. We’ll be helping you get the word out. What are other ways the second NOFA differs from the first? JA: The second round of funding is much more flexible than the first round. It allows RUS to target funds where they’re most needed. I think this is going to allow us to get the remaining funds out the door in a way that will really effect change. HL: Can you talk about open access? Should network operators that receive U.S. funds have to make their last-mile networks available to competing service providers? We know that in many places publicly subsidized networks are open access. Or do you think this would not work in our privately driven America? What’s your approach to this? JA: Because these projects are being funded by the taxpayer, we feel it’s important that they remain open. That is also the stated priority of the Obama administration, and the FCC is moving in the same direction. Projects financed with public money should be open. In rural areas you might not see as much of that. There may only be one good service provider, so there might not be other takers. Still, that principle is an important one. HL: Speaking of the FCC, obviously your tenure there gives you a unique perspective as leader of the agency. You are a true telecommunications administrator for RUS. Coming from the FCC to RUS, what role will you be able to play in the national broadband policy that this administration is developing? In the past, the funding bills didn’t

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actually say a lot about public policy. And I always found that a real difficulty. RUS was given the task of investing the money, and only through that mechanism did the agency set policy. Now that the FCC will be writing a national broadband policy plan, how are you going to be engaged in broadband policy, especially as you’re loaning the money? JA: Well, because of our key role in the stimulus package, we’ve had to work to ensure rural America is every bit as connected as the rest of the nation. We’re trying to put the role of rural America in the forefront of policymakers’ thinking in different agencies. The FCC is very committed to ensuring that rural America is a part of the picture, a focus of concern. This is a challenge, given that we are in the business of financing actual operations, looking at the books of these companies. We have over $3 billion to target, and we need to make sure these rural companies remain strong and continue to deliver quality service to rural residents. The experts agree that loans in rural areas are difficult to finance, so we are in the center of the debate about how we’re going to solve our broadband challenges to make a real difference in a major way. That financing that you as the administrator provided, and my other predecessors provided, has since 1995 always required that everything we fund have broadband capability. So our networks, the ones that RUS has funded, are in pretty good shape relative to some others. We’re trying to reach out and help them expand their footprint, and to reach out to new entities that might want to apply, to reach out to wireless

companies. We want to involve them in the rural broadband challenge. Although I do have a background in telecommunications, I still plan to be a holistic administrator at RUS. I’m quickly learning about the water and environmental and electric programs, and I look forward to applying the knowledge I’ve learned during my career in those areas as well. Most importantly, I’ve learned that water, electricity and broadband are truly a three-legged stool. They are the foundation of our communities and rural and community development. HL: One of the things that intrigued me on the BroadbandUSA.Gov Web site is that this program is encouraging partnering. If you’re interested in doing something with someone, you can go online to find a partner. Where did that come from? JA: This was an administrative initiative, and our partners at NTIA took the lead with that project. HL: When you walk away from here in about eight years, what is the legacy you want to leave? How do you want to make this place different or better? JA: We want to make sure we leave behind a legacy of networks that we’ve established that will provide services for years to come and that will logically advance to even better systems that continue to grow and provide service into the indefinite future. We can’t afford to make this level of investments and have these companies go out of business once the federal funds are gone. We are very carefully selecting projects that are feasible in the long term. The true test of our success will be whether the funded entities survive and thrive once the funds are gone. HL: Administrator Adelstein, we at BBP would like to thank you for your time. I know just how busy your days are here in this agency. We appreciate your commitment to rural America and the deployment of high-speed connectivity throughout this great country of ours. BBP

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Green Technology

Go Smart. Go Green. Because high-speed broadband and energy conservation are synergistic, municipal leaders can leverage broadband infrastructure to address environmental problems. By Graham Richard ■ Graham Richard Associates LLC

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very community, whether it is a city, town or military base, has a challenge. At the start of my first term as mayor of Fort Wayne, Ind., we as a community asked ourselves, “What can we do that will distinguish our city?” One answer was a challenge question: “What if we became the most wired and inspired city of our size?” Flash forward eight years, and imagine living in a 95-year-old house that recently became a lot smarter and greener. From this house, your children could use a video link to check in with you when they got home from school. You could telecommute at night to earn a new college degree. You could remotely control all appliances through Internet access, saving 10 to 15 percent on your energy bill. This home is real. It has been a demonstration model for Fort Wayne’s Renaissance Pointe urban renewal effort. It’s now up for sale, and I’d love to see it go to someone who has struggled as energy and transportation costs became an ever-larger part of an increasingly small family budget. This house could help her live a much greener, more affordable life. This smart green home was made possible only because Fort Wayne created partnerships among city leaders, local education and library leaders, public safety officials and businesses – particularly Verizon. Between 2005 and 2006, Verizon invested more than $150 million in deploying high-speed fiber optics throughout Fort Wayne and a nearby community. The effort created 900 new jobs and has reached more than 132,000 homes and businesses. Fort Wayne was the first Mid-

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Preview

Graham Richard will deliver a keynote address at the Broadband Properties Summit in Dallas, April 26–28.

western city of its size to have citywide fiber optic broadband services. You’d have to be living in a very deep hole not to know that high-speed broadband – both wireless and fiber to the premises – is the new infrastructure for life in the 21st century. We are on the cusp of radical transformations in the way we live and work. Communities of all shapes and sizes that want to thrive must start pushing to join this broadband highway just as they once clamored for railroads, electricity and interstates. Living in that same deep hole would be your only excuse for being unaware of the energy crisis our country faces. It is an energy cost, air quality and energy security challenge. If you pay your own gas and electric bills, or if you have bought gasoline at $4 a gallon, you know that learning how to reduce energy consumption and wisely use what we do consume are also mandates for the 21st century. Communities can go smart by using fiber optics to connect all homes and businesses. Quite separately, they can go

green by purchasing LED traffic lights and building a fleet of hybrid vehicles. But as excited as I am by the social, economic and environmental benefits that high-speed broadband and energy conservation can offer, I am even more intrigued by how they converge and by the synergies we can achieve at all levels – personal, business, and community – by using high-speed broadband to enable greater energy conservation. Going Smart in Fort Wayne Making high-speed broadband infrastructure available to every home, school, and business yielded many benefits for Fort Wayne: Social benefits: Our Senior Connect service established public computer labs where high school students teach Internet skills to senior citizens. They can now access many more services without having to travel and can use broadband to stay more connected with friends and family. We have also created new video relay services for the deaf and hearingimpaired community, which allows in-

About the Author Graham Richard, the former mayor of Fort Wayne, Ind., is a broadband advocate. As principal of Graham Richard Associates, he assists municipal leaders in using broadband to improve their communities. You can reach him at [email protected].

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Green Technology terpreters in a central location to connect users with anyone from a computer technician to a physician. Educational benefits: When we asked business owners, “What can we do to encourage you to make investments to retain and gain jobs?” one answer near the top of the list was always, “Develop the skills of the workforce.” Improved educational attainment for high school graduates and young adults is a critical competitive advantage for every community as the country emerges from the Great Recession. For example, when Fort Wayne students enter the workforce, they compete with students from the Chicago Public School district, where thousands of students have access to recently established programs in critical languages such as Arabic, Japanese and Chinese. To enhance learning opportunities in Fort Wayne, we created a learning consortium (ACELINK) by bringing leaders from the city and local colleges together with the superintendents of the four school districts in Allen County. Today, 14 libraries, more than 90 schools, 3,000 teachers and 54,000 students are connected with high-speed fiber optic broadband. Teachers use ACELINK to keep ahead of their tech-savvy students. One teacher told me, “Mayor, thank goodness I have high-speed access because

Fort Wayne has used its fiber-to-the-home infrastructure to provide senior services, enhance educational opportunities, retain businesses and fight crime. now I can download all the videos before the kids do and make sure I know what they’re going to know before they know I don’t know!” Teachers also can access continuing-education courses without having to travel. Students use ACELINK to participate in college-level courses. In fall 2009, Fort Wayne unveiled a new system through which high school students receive language instruction via ACELINK for college credit. Professors now offer coursework in Arabic, Japanese and Chinese via high-resolution video. (Take that, Chicago!) Business and jobs benefits: Highspeed broadband is also helping Fort Wayne retain and gain jobs. We held an Innovators Forum that connects people who are working on new potential broadband applications. In May of 2007, in partnership with Broadband Properties Magazine, we held the first Killer App Conference and Expo, which brought 500 people to the city. Fort Wayne now

Broadband infrastructure enables remote control of home heating and cooling systems.

touts broadband access to attract businesses, both large and small. Public safety benefits: Fort Wayne was one of the first cities in the Midwest to connect all its police cars via wireless access. Now, instead of having to drive to a central station to attend daily squad meetings or fill out paperwork, police officers do more patrol and police work. From their cars, they can record video and share crime data in real time. Broadband applications allow for remote fingerprint checks. This application of wireless broadband to improve policing is a major factor in a recent 8 percent drop in serious crime in Fort Wayne and the lowest crime rate in 30 years. How Smart Enables Green Today, instead of driving to the nearest Best Buy or Wal-Mart and buying a CD, anyone can simply download the music. We do not use energy to drive. We don’t have to pay for a jewel case that has to be produced, packaged, shipped and stocked and that will likely end up in a landfill. All that energy conservation from such a simple use of broadband. In fact, a 2007 study by the American Consumer Institute concluded that increased use of broadband networks for purposes such as telecommuting, teleconferencing, e-conservation and ecommerce could decrease dependence on foreign oil by up to 11 percent over the next 10 years. Other reports conclude that information and communications technologies can reduce carbon emissions 15 to 20 percent by 2020 if their use is maximized. Fort Wayne’s broadband initiative is enabling businesses to be more environmentally conscious. Medical clinics have gone paper-free for medical records, an effort we called “no more clipboards.” Yet saving paper is the least of the benefits this initiative offers: An es-

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Green Technology

In Fort Wayne’s Senior Connect program, young people teach computer skills to seniors.

timated 90,000 low-income citizens are receiving better care because emergency room doctors and neighborhood clinics have instant, electronic access to patient records. When a visitor comes to one of the city’s free clinics with vision problems and possible diabetes, the clinic scans his retina, sends the image to a specialist at another facility and quickly gets a diagnosis. This service has already prevented blindness through early detection and treatment. Broadband is playing a big role in achieving green goals. Remember that 95-year-old house that is now a smart green home? Its renaissance was part of an urban revival program that Fort Wayne initiated, based on a collaboration with more than 25 neighborhood-based service partners. We wanted to re-create the walkable and neighbor-friendly neighborhoods typical of the early 20th century to reduce transportation needs. We also wanted energy-efficient homes that not only reduced energy demand but also made living more affordable for low- and middle-income residents. Using new materials that are highly efficient, durable and environmentally friendly was half the picture; broadband

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applications formed the other half. The homes’ smart green features include HVAC, lighting and Internet-viewable cameras programmable via remote wireless touch panel or the Internet. Creating a Smart Green Military The Department of Defense (DoD) is the largest energy user in the world. That’s why it should come as no surprise that President Obama issued Executive

Order 13514, Federal Leadership in Environmental, Energy, and Economic Performance, requiring all federal installations to set aggressive greenhousegas reduction goals for 2020 and meet tough new goals for energy savings, water efficiency and green building. DoD aims to reduce energy use by 3 percent per year to reach a total reduction of 30 percent by 2015. Yet on a recent visit to several military bases and in meetings with top Pentagon officials, I learned that, for instance, although Cat 5 cabling is being built into new buildings at Fort Sam Houston, it is not being installed in old buildings. Many bases have no fiber to the home (or to the barracks), and the Fort Sam Houston library has 20-year-old computers with a slow Internet connection. DoD has not yet made plans to use high-speed broadband to meet its energy savings goals. I find it hard to imagine how military bases can reach their ambitious goals without using connected smart networks to improve energy efficiency and foster innovative smart green military bases. In fact, these important energy security goals will not be met without innovation and investment in new clean, green technology enabled by high-speed broadband. Creating More Smart Green Cities Cities and towns may not have to comply with an executive order, but they

Fort Wayne’s FTTH network enables a video relay service that helps deaf residents communicate.

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Green Technology funding, for cities and towns facing combined sewer overflow compliance to work with business partners to build out dark fiber or conduit along with the sewer and water infrastructure. Congress is looking at Green Bond funding now and can make sure that a Green Bond is a Smart Green Bond.

A technician at a walk-in clinic in Fort Wayne performs a retinal scan that will be read remotely.

face economic and environmental pressures that drive the same need for infrastructure investments. The motivations are clear: saving energy, creating and retaining jobs, providing access to applications that improve the personal and business lives of residents. The level of investment needed may seem daunting, but there are some new broadband funding sources. The Departments of Agriculture and Commerce are now allocating $7.2 billion of American Recovery and Reinvestment Act funding to expand broadband access to unserved and underserved communities. I also want to offer a new twist on the “Dig Once” idea: There are 772 communities across the United States, including 105 in my home state of Indiana, facing federal mandates to rebuild their old combined storm water and sanitary sewer systems into separate systems. This will require sewer infrastructure investments estimated at well over $200 billion. All of this is going to come out of local ratepayers’ pockets. If communities are required to spend to dig ditches and lay sewer pipe, why not provide an incentive for them to install conduits for future fiber optic cables at the same time? This could provide a substantial financial leverage point for FTTH public-private partnerships. The Green Bond, a recent federal financing tool for local infrastructure

investments, could be adapted for this purpose. Congress could add incentives, such as longer payback periods, better interest rates or priority for broadband

Conclusion Ivan Seidenberg, the CEO and chairman of Verizon, likes to quote Metcalfe’s Law, which says that a network’s value grows exponentially with the number of connected users. Today, “connections” can be between people and things (such as home appliances or databases), between machines and machines, and ultimately between smart grids and smart things (sensors, buildings, vehicles). Connections among community leaders are vital, too. Municipalities that are building partnerships to execute the National Broadband Plan can leverage the leadership connections they forge to help their cities and towns go smart to go green. BBP

s e t a l u t a r Cong

Broadband Properties Magazine

For becoming a Silver Sponsor at the 2010 Broadband Properties Summit.

$)XUXNDZD&RPSDQ\ For more information on OFS, visit www.ofsoptics.com. You are cordially invited to come see OFS at the upcoming

April 26 – 28, 2010 InterContinental Hotel – Dallas Addison, Texas The Leading Conference on Broadband Technologies and Services To Exhibit or Sponsor, contact: Irene Prescott at [email protected], or call 316-733-9122. For other inquiries, call 877-588-1649, or visit www.bbpmag.com.

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Connected at the Summit April 26 -28 Dallas

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Expanded Multi-Housing Program An Agenda Developed by Industry Leaders MDU Co-Chairmen:

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Henry Pye Vice President, Resident Technology Solutions, RealPage, Inc. 

Steve Sadler Vice President, Ancillary Services, Post Apartment Homes, L.P.

The 2010 Advisory Panel of Property Owners Includes: Brian McIntire

Director of Information Technology – Buckingham Companies

Cheryl Barraco

Director of Telecommunications – Avalon Bay Communities, Inc

Michael Halbrook

Ancillary Business Manager – Mid-America Apartment Communities

Jeffrey Bond

Vice President, Ancillary Services – Related

Jorge de Cardenas

Sr. Vice President Information Technology – American Campus Communities

Karen Seemann

Director Ancillary Income – Essex Property Trust

Kent McDonald

Director of Communications Services – AIMCO

Mark Bershenyi

Director of Contracts – Archstone Smith

Michael Burnette

Vice President, IT – Place Properties

Robert Bishop

Vice President – Riverstone Residential Group

Steve Merchant

Vice President of Revenue Strategy – Equity Residential

Terry Fulbright

Vice President, Director of Ancillary Services – UDR, Inc.

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Broadband for Rural Prosperity Attend the RTC Forum on Scholarship:

Grants awarded to select government representatives, community leaders, economic develop- Keyno te Awards ment professional, educators and others. Awardees will be chosen by the RTC. To request an Luncheon, all application, please email [email protected], or call 706-271-5521. Sum

mit networkin g b re a ks and cockta Special low rates for RTC members include full admission to all three days of the Summit. il reception are To join RTC and qualify for special admission, call or email Broadband Properties at 877open to the R 588-1649, or [email protected], or visit the Rural Telecommunications TC Congress website: www.rtcconference.org/rtc/. attendees. See The Rural Telecommunications Congress forum agenda on the next page.

RTC Officers and Directors Greg Laudeman – President

Georgia Tech Enterprise Innovation Institute

Bill Shuffstall – Secretary

Extension Educator – Pennsylvania State University

Eric Ogle – Treasurer

Institute for a Secure and Sustainable Environment, Univ. of Tennessee

Jane Smith Patterson The e-NC Authority

Harry L. Roesch

Senior Telecommunications Advisor – Appalachian Regional Commission

Galen Updike

Arizona Telecommunications Development Mgr. – Govt. Information Technology Agency (GITA)

Mark R. Perkell

President – VOR Consulting Services, LLC

Mickey Seidel

Senior Manager – Adesta LLC

One-Day Rural Forum At The Summit CONNECTING RURAL LEADERS. Educating rural leaders in order to lay the foundation for cost-effective broadband deployments that have real economic benefits.  RGANIZING FOR BROADBAND. Hybrid, innovative, and other non-traditional organizational forms for O broadband, including how to develop capacity and engage customers. SUSTAINING RURAL BROADBAND. How to make broadband as integral and sustainable a part of rural life as churches, fences, streams, and tractors. RURAL BROADBAND POLICY. What can be done at local and state levels, and how RTC can support collaboration across the country, to advance policy that will lead to broadband for rural prosperity.

Secure your seat today by calling 877-588-1649, or visit our website at www.bbpmag.com

ECONOMIC DEVELOPMENT

Broadband Boosts Local Economic Development An important new study finds that areas where broadband is expanding experience more employment growth – and that broadband expansion probably causes that growth.

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roadband policy in the United States has never been based on adequate research about the benefits of broadband. Because detailed national data about broadband availability is lacking, economists have had difficulty teasing out the relationship between broadband and economic health. As a result, researchers disagree about whether state and federal governments should support the development of broadband infrastructure. Even those who agree that broadband is a public good are hard pressed to defend specific policies or dollar amounts. Going forward, better broadband data should become available because of the 2008 Broadband Data Improvement Act, which requires the Federal Communications Commission (FCC) to gather and publish more detailed and useful information, and the nationwide broadband mapping effort, funded by the 2009 American Recovery and Reinvestment Act. In the meantime, an important new study by Jed Kolko, a Harvard-trained economist who is associate director of the Public Policy Institute of California, takes a new approach to analyzing the limited broadband data that the FCC has published. While data limitations prevented Kolko from drawing definitive conclusions about several important

Preview

Local economic development officials can learn about bringing broadband to their communities at the Rural TeleCon event held at the Broadband Properties Summit.

issues, he does conclude that broadband promotes local economic growth – and, more surprisingly, that U.S. broadband policies may need to be rethought. Following is a summary of Kolko’s study, “Does Broadband Boost Local Economic Development?” The full study and technical appendix can be downloaded from www.ppic.org. Broadband Expansion and Employment Growth The first question Kolko asked was whether employment grows faster in areas with more broadband expansion. The answer is a clear yes: Moving from no broadband providers in 1999 to between one and three providers in 2006 (the FCC groups one, two and three providers together in its reporting) is associated with employment growth 6.4 percentage points higher than expected. Of course, employment growth rates differ for many reasons, and broadband is associated with only a small part

In ZIP codes where broadband was built out, employment grew 6.4 percentage points above the expected amount. 44

of the total variation – which is why bringing broadband to a community is not a panacea. What if this increased employment growth was associated with having no broadband at the beginning of the period, rather than with acquiring broadband access over the next seven years? This scenario seems unlikely, but it’s possible. To test it, Kolko compared the 1999–2006 broadband expansion group with the other ZIP codes that had no broadband in 1999. He found that ZIP codes without broadband in 1999 did much better over the following seven years if they acquired broadband than if they remained without it. Kolko also performed similar comparisons for the 1992–1999 period. In 1992, broadband wasn’t available anywhere, but by 1999 it was becoming available. He found that for ZIP codes with one to three providers in 1999 – that is, the ZIP codes that got broadband first – employment grew 3.5 percentage points faster from 1992­–1999 than it otherwise would have. Effects on Specific Industries and Locations Kolko theorized that if broadband affected employment, it would likely do so through one or more of these scenarios:

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ECONOMIC DEVELOPMENT 1) Businesses reliant on information technology might increase their employment of workers skilled in using new technology. Broadband would therefore have a larger positive effect on employment in those industries. 2) Broadband expansion might actually hurt local businesses that begin to face competition from online businesses located elsewhere. Businesses most dependent on local demand, such as retailers or entertainment, would be more likely to suffer because of broadband expansion, depending on how easily their customers can switch to their online counterparts. 3) Broadband might offer greater benefits to places that are smaller or more isolated, helping local businesses or households connect with larger markets. 4) Areas that have access to a more

Broadband is most important for the businesses that rely heavily on information technology. It also helps businesses in remote locations gain access to larger markets. highly educated labor market might benefit disproportionately from broadband if the more educated workers are better able to use advanced information technologies. 5) Areas with attractive climates and recreational opportunities might benefit if broadband access allows firms to move farther from their suppliers and customers and toward locations appealing to employers and workers. 6) Economic activity could shift to locations where broadband is more

Data and Methods The data sets Kolko used included the following: • FCC data showing, for each ZIP Code Tabulation Area (the Census Bureau’s version of a ZIP code), the number of broadband providers with subscribers. Broadband is defined as at least 200 Kbps in at least one direction. Although the FCC collects and publishes data about broadband speeds and technologies, these data are reported only in the aggregate, not at the ZIP code level. In addition, no information exists about whether broadband is available throughout an entire ZIP code or whether any providers offer service in the ZIP code but have no subscribers. Finally, the FCC does not distinguish among ZIP codes with one, two and three providers. • National Establishment Time-Series (NETS) data showing, for each ZIP code, the change in employment. The NETS, which is based on the Dun & Bradstreet business register, includes nearly all businesses and provides detailed industry and geographic information. • U.S. Census Bureau and other government data showing the change in employed residents, total and working-age population, average pay and median household income at the county level. • Forrester Research survey data on the change in the likelihood of telecommuting, bringing work home and operating a home-based business. To capture the effects of the expansion of broadband availability, Kolko focused mainly on ZIP codes that had no broadband providers at the beginning of a seven-year period but had between one and three providers by the end of the period. Some of his analyses also consider ZIP codes that moved from the one-to-three provider category to the four-provider category. Kolko’s regressions and other statistical analyses are discussed in detail in the technical appendix to his report.

widely available, raising aggregate employment there relative to other areas. Locational shifts in economic activity would be more pronounced in more “footloose” industries – those whose location is not tied to local markets or inputs. Kolko’s analyses confirmed the first three of these scenarios. Table 2 shows the effect of broadband expansion on employment growth in a range of industries. Not surprisingly, broadband expansion has affected different industries very differently. Establishments that use a great deal of information technology, such as corporate headquarters and technical services firms, appear near the top of the list as do companies that employ a large number of computer professionals, such as utilities and financial firms. Local firms that could be adversely affected by broadband expansion, such as bricks-and-mortar retailers and arts establishments, appear near the bottom of the list – they benefited the least from broadband expansion, as expected. The third scenario – broadband expansion helps firms in remote locations access larger markets – was also supported when Kolko found that the broadband-employment relationship is stronger for ZIP codes that have lower population density and weaker for those with higher density. The remaining place characteristics (having a more educated workforce, having a better climate or being a vacation destination) did not appear to affect the relationship between broadband expansion and employment growth. Kolko also could not confirm that “footloose” businesses were differentially affected by broadband expansion. The Question of Causality After establishing the relationship between broadband expansion and em-

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ECONOMIC DEVELOPMENT Table 1: Summary of Findings Economic outcome Employment

Working-age population

Relationship with broadband

Possible reason

Positive and big Broadband expansion causes existing businesses to expand or redistributes economic activity toward the area. Positive People are mobile and move to where employment opportunities are expanding.

Employment rate (employed residents None Because people are mobile or willing per working-age population) to commute, labor supply grows along with labor demand, and businesses need not pay a large premium for basic technology skills. Average pay per employee

None

Median household income

Negative

Telecommuting

None Home-based work requires faster speeds than the minimum that qualifies as broadband, and many corporate cultures are not well-suited to telecommuting.

Bringing work home

None

Home-based business

None Source: PPIC

ployment growth, Kolko asked whether broadband expansion actually caused this growth. Finding a positive relationship between broadband expansion and economic growth does not necessarily mean that broadband expansion causes economic growth, he notes. Broadband providers may be more likely to offer or expand service in areas that are already growing faster. The employment growth in these areas might simply represent the continuation of their earlier growth trends. To find out whether broadband expansion was leading or following employment growth, Kolko included earlier (1992–1999) employment growth in his analysis as a possible cause of later (1999–2006) growth. If broadband providers had simply targeted areas that were already growing, then later employment growth would be accounted for by the earlier employment growth, and the

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relationship with broadband expansion would disappear. That didn’t happen. In a second test of the direction of causality, Kolko found a relationship between the slope of the terrain and employment growth. Now, the slope of terrain in any ZIP code is related to broadband expansion there (building broadband networks in mountainous areas is expensive), but it has no obvious reason to be related to employment growth. Therefore, the most likely reason for slope to be related to employment growth is that it is a proxy for broadband expansion. But if employment growth caused broadband expansion, it wouldn’t affect the slope of the terrain – so finding a relationship indicates that causality runs from broadband to employment and not vice versa. Another possibility is that some third factor – probably population growth – is responsible for both broadband expansion and employment growth. If people

move into an area, both ISPs and employers may follow them there. To find out whether population growth might cause both broadband expansion and employment growth, Kolko adjusted his analysis for population growth. He found that the relationship between broadband expansion and employment growth changed only minimally: The boost to employment growth fell from 6.4 to 5.0 percentage points but remained statistically significant. Finally, Kolko reasoned, if population growth were driving both broadband expansion and employment growth, the strongest relationship would show up in the sectors of the economy tied most closely to population, such as local retail services, real estate and construction. But as we saw above, local services employment showed the least relationship to broadband expansion. Considering the results of these four tests, Kolko concludes that the expan-

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ECONOMIC DEVELOPMENT sion of broadband availability probably causes local employment growth. Who Benefits? The most interesting question, from a policy standpoint, is whether local residents benefit from broadband expansion. This is where Kolko’s results are most surprising. Economic development bolsters the local tax base, so residents may benefit by getting better municipal services or paying lower taxes. It also drives up real estate values, which is mostly good for

property owners and mostly bad for renters. But the effects on labor markets are harder to predict. For the 1992–1999 period, Kolko found that broadband expansion favorably affected average pay per employee, median household income and the employment rate. But during 1999–2006, there was no effect on the average pay per employee and median household income actually decreased. For areas that had no broadband in 1999, getting broadband during the 1999–2006 period did not help the

employment rate or the average pay per employee. Kolko points out that employment opportunities attract people who are willing to move or commute. At least in the later period, people may have moved to follow employment growth, and new residents would have competed in the labor market with the original residents. Today, with most of the country covered by broadband, wiring unserved areas seems more likely to prevent depopulation than to attract new residents – but preventing depopulation could similarly

TABLE 2: Broadband and Industry Employment Growth, 1999–2006 Employment Growth

Percentage Pt. Highest Share Employment Change of Technology With Broadband Inputs Expansion

Highest Share Employment of Computer Location Most Tied Occupations to Population

Management of companies and enterprises

40.8

x

x

Utilities

16.7

x

Professional, scientific, technical services

16.4

x

x

Finance and insurance

14.8

x

Administrative and business support services

14.1

x

Information

12.0

x

Construction

11.8

Agriculture, forestry, fishing, hunting

11.6

Real estate, rental, leasing

10.2

Accommodation and food services

9.9

Transportation and warehousing

8.6

Health care and social assistance

7.4

Wholesale trade

7.1

Other services

7.1

Mining

6.6

Retail trade

6.5

Manufacturing

6.3

Educational services

6.1

Arts, entertainment, recreation

5.7

Public administration

0.5

x

x

x

x

x x x

Source: PPIC

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ECONOMIC DEVELOPMENT keep wages, income and employment rates from rising. Another surprising finding is the lack of any relationship between broadband expansion and home-based work, whether telecommuting, bringing work home or operating a business from home, even for higher-educated, managerial or professional workers. When Kolko presented his findings in January at a forum at the New America Foundation, attendees asked whether the negative findings regarding home-based work might reflect the growing disparity among broadband speeds. Surveys such as those conducted by RVA indicate that the likelihood of telecommuting increases with broadband speed. Conceivably, Kolko might have found a telecommuting effect if FCC data distinguished between, say, 20 Mbps downstream/20 Mbps upstream broadband and 256 Kbps/128 Kbps broadband. However, the absence of broadband speed data by ZIP code meant that Kolko could not definitively answer this question. He

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notes, “Better broadband data will make the relationship between broadband speed and economic outcomes clearer in future research.” Policy Implications: Places Versus People Economists distinguish between placebased policies and people-based policies. Ultimately, the goal is to help people, not places. However, politics and policy administration tend to be organized around places. In addition, people are often tied to places; not everyone is free to move to a place that has greater economic opportunity, and many of those who can move prefer not to. Place-based policies, though more politically feasible and easier to administer, don’t necessarily have the hopedfor results. As Kolko shows, subsidizing broadband infrastructure – the approach that the broadband stimulus program takes – may have little effect on the people it is intended to help. People-based policies, Kolko says,

would involve subsidizing broadband adoption for specifically designated people, such as those below a certain income threshold, no matter where they live. A people-based approach might be similar to the Lifeline Assistance program for telephone service, supported by the Universal Service Fund. Kolko’s study does not analyze the costs and benefits of implementing people-based broadband policies. However, he raises the discussion to point out that supporting broadband infrastructure deployment in specific places is not the only possible policy for supporting broadband access and that people-based policies should also be considered. Ultimately, Kolko says, there is no easy answer. The choice of broadband policy depends on the potential benefits of broadband – including its possible contributions to public health, education, citizen participation and other public benefits – and on the degree to which society values investment in disadvantaged places. BBP

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MUNICIPAL BROADBAND

UTOPIA Experiments With User Financing Voluntary assessments of homeowners in Brigham City, Utah, will finance the buildout of the UTOPIA fiber-to-the-home network in that city. Other municipalities should consider this financing method – cautiously. By Christopher Mitchell ■ Institute for Local Self-Reliance

T

he UTOPIA project, an ambitious fiber-to-the-home network developed by a consortium of 16 Utah cities, has encountered difficulties that have delayed its original buildout schedule. However, it is now building out fiber in Brigham City, one of the original cities in the consortium. Brigham City found a local solution to UTOPIA’s slow deployment schedule and created a model to speed buildout in willing communities. Brigham City, a community of 18,000 in northern Utah, decided to form a voluntary assessment area – sometimes called a special assessment area – to finance the network buildout that will pass all homes and connect residents looking to subscribe. As with all wired networks, up-front costs are steep and typically require a heavy debt load. Brigham City’s unique approach may catch the interest of deployers unwilling or unable to shoulder that debt. For several months, a group of canvassers organized by UTOPIA went door to door in Brigham City to talk to residents about UTOPIA and ask if they were interested in subscribing to the network. Supporters organized some 30 block parties and invited UTOPIA to attend, bringing a mobile home where they could demonstrate the superiority of full fiber optic networks. Residents who wanted service were requested to ask the city to create a voluntary assessment area. Creating this special district would allow participants to finance their connections themselves.

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Preview

The FTTH track at the Broadband Properties Summit will include a special session about the turnaround of the UTOPIA project .

Separating Connection Fees From Service Fees Residents who wanted to subscribe could either pay the connection cost in full or agree to pay up to $25 per month over the course of 20 years (the exact amount would depend on how many residents joined the program). This amount does not include the cost of services; rather, it is the cost of connecting to the network and having the option of subscribing to UTOPIA-based services. Those uninterested are not levied. In other UTOPIA cities, when residents subscribe to services on the UTOPIA network, the connection costs are included in the service fees. Those connection costs will be deducted from the service fees for Brigham City residents who have paid for their connections, meaning that the assessment will be balanced by ongoing savings on services. Perhaps the biggest long-term benefit of this approach is having a built-in

take rate. UTOPIA knows that almost 30 percent of Brigham City households will subscribe from the day it starts offering services – and that those subscribers are sufficiently interested in the services to place a levy on themselves. Having bought in, they are unlikely to switch away if incumbent providers engage in predatory pricing. Furthermore, if they do decide to switch, UTOPIA has not lost the cost of the connection. The Competitive Landscape Before UTOPIA began building its fiber network in Brigham City, many residents already had access to last-generation broadband services delivered over copper networks. Both Comcast and Qwest offer some broadband in the city, although not everyone has access. In some neighborhoods, Qwest offers “up to” 7 Mbps and Comcast offers “up to” 20 Mbps. As is common with DSL and cable providers, these connections are

About the Author

Christopher Mitchell, researcher for the Institute for Local Self-Reliance, writes regularly at www.muninetworks.org and can be reached at [email protected].

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MUNICIPAL BROADBAND asymmetrical, offering slow upstream speeds. UTOPIA, by contrast, offers 100 Mbps symmetrical service. Qwest sent some of its Salt Lake City lawyers to the city council meeting that created the assessment area. The lawyers complained they did not know enough about what the city was doing and noted that Qwest planned to upgrade its infrastructure in Salt Lake City and might invest in some areas of Brigham City in 2010. Qwest also claimed that, if Brigham City supported the network, it was essentially telling private industry it was creating a public monopoly – a stunning statement, as UTOPIA encourages private-sector companies, including Qwest, to offer services on its network. Brigham City does have a local, independent provider, Brigham.net, that offers dial-up and DSL services. To provide DSL services, Brigham.net leases and resells Qwest circuits. Incumbent telcos such as Qwest have long fought federal regulations that required them to open their networks to competition, and they have largely won. The number of competitive Internet service providers in the United States has fallen precipitously. Once UTOPIA is operating in Brigham City, Brigham.net will be on the same level ground with other service providers, rather than having to pay Qwest exorbitant prices that leave it unable to compete on pricing. (See city council minutes at www.brighamcity.utah.gov/ City%20Council%2011-05-09.pdf) Financing the Build The city put up $300,000 to connect municipal buildings and facilities – a one-time cost that will save thousands of dollars in operating costs per month and also generate new operational efficiencies from increased network capacity.

Close to 30 percent of Brigham City households volunteered to pay for the costs of their connections to the UTOPIA fiber network. Some 400 households paid $3,000 up front for a connection, while 1,200 other households opted for the 20-year assessment (Brigham City has some 5,600 households in total). Residents opting for 20-year assessments will pay $22.50 per month for 20 years ($5,400 over the full term) for their connections. The city creates a lien on each property as security against a $3.66 million tax-exempt bond at 5.5 percent interest. Monthly payments from the 1,200 households will repay the bond. Those who choose not to take services from UTOPIA will not be assessed, but they will still benefit from the network; they are likely to pay lower rates for their triple-play services due to the competition offered by UTOPIA. The city council allocated an additional $371,000 to ensure that the network would be able to accommodate residents and businesses that later choose to join. The city believes that if only 207 subscribers join in the future, it will recover this investment. UTOPIA has long been dogged by a group called the Utah Taxpayers Association (UTA). UTA, working with Comcast and Qwest, has pushed laws through the state government to hinder UTOPIA and regularly attacks it in the press. Prior to Brigham City’s decision to enact the voluntary assessment area, UTA mailed out postcards to residents criticizing the plan. The city quickly responded to each of the points on the postcard, and those who came to the

Brigham City by the Numbers Municipal buildings: 400 up-front households: Bond for 1,200 household assessments: City-fronted gap:

$300,000 $1,200,000 $3,660,000 $371,000

Total cost of UTOPIA deployment:

$5.5 million

city council meeting to establish the assessment area (other than the Qwest lawyers) were overwhelmingly in favor of the proposal. However, UTA’s opposition reveals dangers for other municipalities contemplating this path. (For more thoughts on this, see www.freeutopia. org/2009/12/14/some-thoughts-onthe-future-of-the-saa) UTA’s postcards threatened that people would lose their homes if they did not pay the assessments they agreed to. Because of these scare tactics and the anxieties of a few people who did not realize they were agreeing to liens on their properties because they did not read the contracts they signed, UTA was able to manufacture a controversy. Groups like UTA can stoke the fears invoked by words such as “assessment” and “lien” despite the fact that unpaid assessments rarely lead to foreclosure – in the case of Brigham City, city officials note they have “never exercised [the] option to foreclose” under liens for street infrastructure projects. Though this assessment model solves the financing problem, the costs and difficulty of canvassing neighborhoods are fairly significant. Additionally, the citizens of Brigham City had already committed to UTOPIA by supporting the sales tax pledge and had waited many years for their connection. Thus, they were likely more receptive to the idea than other communities may be. Still, other communities may find they can finance portions of a fiber-to-the-home network with similar assessments rather than attempting to finance the entire network by borrowing against the liens. This approach is not for everyone, but it may be appropriate for communities in the right circumstances – other communities in the UTOPIA footprint are already investigating it to finish their buildouts. BBP

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Service Provider Strategies

To Cap or Not to Cap? First, Look at the Data Providers are sitting on gold mines of customer data that they seldom dig into. Business intelligence software can locate valuable – and often surprising – nuggets of information. By Masha Zager ■ Broadband Properties

T

he headlines are everywhere: Customers are watching more online video. Bandwidth hogs are slowing down the network. Oversubscription models don’t work anymore, and bandwidth caps will be needed. Or should that be tiered pricing? However, local trends don’t always reflect national trends, and your customer may not be the average customer. “You need to know exactly what your subscribers are doing so you can tailor your decisions to the personality of the installed base,” says David Messina, vice president of marketing for Xangati, whose software provides visibility

Preview

Find out more at the Broadband Properties Summit about how service providers are facing the challenges of increasing bandwidth demand.

recording vast quantities of data about network usage, they wanted to leverage the data for business analytics. With the new feature, they can either mine the data directly through an applications programming interface or export it to a data base for mining.

Subscribers generating a lot of bandwidth traffic may be bandwidth hogs – or they may have set their newsgroup parameters incorrectly. into network usage. “There’s a degree of variability that’s regionally based. A one-size-fits-all strategy for a large telco is not giving it the opportunity to create services on a regional basis.” At the request of some of its customers Xangati recently added a business intelligence feature to its network analysis software, Xangati Application Management 2.0. Xangati’s software was originally intended only for network management and customer service, but when general managers learned that their network operations centers were

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Many results have been surprising. One service provider, alarmed about increasing bandwidth usage, drew up plans to implement bandwidth caps and tiers through a major investment in deep-packet inspection, despite warnings that a significant number of customers might defect. When return-on-

investment projections showed that the savings from deep-packet inspection would likely be minimal, the company did an about-face and decided to examine, using business intelligence software, the 1 percent of subscribers who used the most bandwidth. It quickly found violations of its acceptable-use policy – subscribers reselling services to their neighbors – as well as configuration problems causing excessive bandwidth use. One apparent bandwidth hog had accidentally set up his newsgroups to download news feeds continually and was happy to have this problem corrected. The provider was able to solve its bandwidth usage problem without installing expensive and intrusive controls. Now it is examining the behavior of the top 1 percent in greater depth to find opportunities for offering premium services. For example, if it can identify a group of avid over-the-top video viewers,

About the Author Masha Zager is the editor of Broadband Properties. You can reach her at masha@ broadbandproperties.com.

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Service Provider Strategies it might offer them guaranteed service levels for video. Messina says, “Now that [providers] have the information, they realize that before they make major decisions on investments or marketing, they should find a nugget or two that no one else has thought of.” Setting Reasonable Policies Another Xangati customer with a subscriber base of about 10,000 found that its top 100 subscribers accounted for an astonishing 20 percent of bandwidth traffic. It, too, discovered at least one consumer illegally reselling Web hosting services. Such findings suggest that across-the-board bandwidth constraints are blunt instruments that may penalize legitimate users along with the abusers. When bandwidth caps or tiers do prove necessary, Messina says, analysis of usage data can indicate what the appropriate ranges should be, giving providers a way to explain and justify their policies. Given that subscriber outrage has focused on the apparent arbitrariness of bandwidth limits and pricing, policies that are evidence-based and defensible might be better accepted. Several of Xangati’s customers have found that one of their subscribers’ top bandwidth-generating activities is connecting with Amazon.com (presumably to download movies). “There’s a way to peer directly with Amazon via Akamai to offload traffic and save money,” Messina comments, adding, “It’s a happen-

Usage data can suggest where to build out fiber networks. The best candidates may not be the highest-income neighborhoods, but those where the most active users live. stance of analytics that it can uncover a use case I never would have anticipated. You only learn this by seeing the data.”

Other questions that service providers are asking as they mine their data include

Finding Revenue Opportunities Providers can also analyze usage data to decide where to build out fiber and offer new services. Many providers assume upper-income neighborhoods are the best candidates for network upgrades, but this may not always be the case. “Don’t make immediate judgments,” Messina says. “Do the analytics first. Test your ideas before going forward.” He suggests prioritizing fiber buildouts based on where the most active users live, rather than on where the wealthiest households are. Analysis of usage patterns can suggest whether users would be receptive to new service offerings. “Are they already hellbent on Netflix and other over-the-top video?” Messina asks. “If so, then IPTV may be too little, too late. It may be better to create services around over-the-top video. You could create a special bundle for gamers or OTT video enthusiasts.”

• Who are my best candidates for a bandwidth upsell? • What percentage of my subscribers are gamers, and how active are they? • How many subscribers are using over-the-top VoIP services? • How much of my traffic is malicious and can be removed?

One service provider’s data mining effort showed that 1 percent of its subscriber base consumes more than 40 percent of upstream bandwidth and 20 percent of subscribers consume almost 100 percent. This analysis stopped the provider from implementing an across-the-board rollout of usage caps and reshifted its focus to understanding and monetizing the top 1 percent of customers.

Getting Started With Data Analysis Messina recommends that companies starting out with business analytics begin by analyzing a week’s worth of data for a proof of concept. In fact, Xangati helps providers identify “quick insights” by comparing their data with a baseline drawn from its other customers. After proving the concept, providers can set up scripts to rerun their models periodically to track changes over time. “For newer customers, the early information is eye-opening, and they want to track from there,” Messina says. “Two or three actions in near time can have dramatic outcomes, reducing their costs or giving them a new mindset of how to look at their subscriber base.” Providers that have already used Xangati software for network management have collected a historical database; after establishing a proof of concept they may take the extra step of adding historical data to the data mining set and reviewing past trends before beginning to track future trends. Messina says that, once they get started, there is no end to the questions service providers can ask – and answer. “Once you scratch the surface,” he says, “you’ll find other layers that you want to peel back on.” BBP

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FIBER AND WIRELESS

Duke University Uses Campus Fiber Network To Boost Wireless Coverage Duke University’s fiber network was built to link campus data centers and provide access to the Internet and research networks. Now it has a new function: moving cellular voice and data signals to hard-to-reach places. By Masha Zager ■ Broadband Properties

O

ne of the nation’s leading private universities, Duke University has more than 13,000 students, 31,000 employees and 220 buildings on its 8,600-acre campus in Durham, N.C. In addition to students, faculty and staff, there are thousands of visitors, including medical center patients and fans of the Blue Devils athletic teams, on the campus every day. Providing connectivity for all of them is a task comparable to serving a good-sized town. Data access for the university and its associated health system is provided by a fiber optic Ethernet network. In addition to providing Internet access, the fiber ring connects the university to research networks such as Internet2, the National Lambda Rail and the North Carolina Research and Education Network and allows the computers in the campus data centers to operate as a single high-performance computer. Of course, students, employees and visitors also need connectivity for their cell phones and other mobile devices. Until recently, mobile connectivity was provided primarily by macro network cell towers for AT&T, Verizon and other wireless networks, supplemented in about two dozen buildings by in-building wireless systems based on equipment from network infrastructure supplier ADC (www.adc.com). As cell phone use proliferated and thousands of smartphones appeared on campus,

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Preview

Learn more at the Broadband Properties Summit about the effort to bring fiber connections to universities and other anchor institutions.

coverage became increasingly spotty inside many buildings, as well as in some outdoor areas of the campus. The locations of the macro cell towers and the frequency attenuation caused by building construction materials made the provision of high-quality service a huge challenge. “We wanted to fill in the gaps in our outdoor coverage in densely populated campus areas, and we also had an immediate need to enhance wireless coverage inside 29 buildings,” says Bob Johnson, senior director of communications infrastructure at Duke University. Increased cell phone and smartphone use weren’t the only drivers for improving mobile communications. The university also wanted to support new service providers and frequencies and, most important, to upgrade its emergency communications systems. The 2007 shootings

at Virginia Polytechnic Institute, and that school’s failure to warn students of the danger, inspired universities around the country to re-examine and upgrade their emergency communications. “We have a responsibility to residents and guests to have solid cell phone coverage,” Johnson says. Upgrading the Wireless System Duke issued a request for proposals for a system that would upgrade wireless connectivity throughout the campus. The winning proposal, submitted by ADC, offered a hybrid solution consisting of both indoor and outdoor distributed antenna systems (DAS), or networks of antenna nodes connected to a common source. The higher-powered outdoor nodes would distribute wireless coverage

About the Author Masha Zager is the editor of Broadband Properties. You can reach her at masha@ broadbandproperties.com.

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FIBER AND WIRELESS

to outdoor areas that the cell towers could not reach and would also enhance indoor coverage in many of the buildings. The indoor nodes would deliver pinpoint coverage in areas that even the outdoor nodes could not reach, typically lower levels, interior corridors and, in the hospital buildings, areas protected by lead walls from X-rays. A major advantage of the proposed system was that it could be deployed quickly because the outdoor DAS nodes would cover huge swaths of the campus. “We liked the hybrid solution for our campus because it would allow us to improve coverage for more people more quickly and because there was a significant cost savings over using in-building solutions only,” says Johnson. In the fall of 2008, ADC deployed five carrier-agnostic outdoor DAS nodes

covering areas in Duke’s east and west campuses. The outdoor DAS nodes were linked to the carriers’ base stations via fiber, largely because of the distances involved – for example, the node at the athletic field is nearly a mile from the base stations. The wireless carriers, which saw the benefit of improving connectivity at the campus, contributed to the buildout. Johnson says, “It makes sense for everybody. … It was a shared expense, but it was a lot cheaper than all of them doing it individually.” With the installation of the outdoor nodes, wireless service immediately improved both outside and inside nearby buildings. University and ADC engineers then began to assess the impact of this first deployment phase to determine how to expand coverage further. Based on their coverage surveys, they decided which additional buildings needed to have indoor DAS. They also determined that some of the existing indoor DAS, which captured signals with roofmounted antennas and bidirectional amplifiers, were robbing capacity from the outdoor network. “Everybody has green initiatives, as part of a drive to keep costs down,” Johnson explains. “So they put skins on buildings that are not RF-friendly, and there’s a one-third loss of signal when you walk in the building.” In addition to new RF-unfriendly buildings, Duke also has plenty of old, thick buildings, such as the venerable Perkins Library, that block wireless frequencies.

RF Over Fiber Duke and ADC engineers realized that bringing RF signals into the buildings over fiber would be much more efficient than trying to bring the signals in wirelessly. They decided to remove some of the bidirectional amplifiers and deliver RF signals into the buildings via the campus fiber infrastructure. Once the signals were inside the buildings, however, they were returned to the in-building wireless networks because the campus fiber network is a limited resource. Duke uses ADC wireless hubs and repeaters inside the buildings. “That way we could pick up all the equipment instead of having to home-run everything,” Johnson says. Today, Duke’s fiber-wireless infrastructure supports all the cell phones and other mobile devices currently in use on campus. Aside from gap remediation made necessary by changes to campus buildings, the system should continue to support wireless use into the 4G era. The fiber backbone will be adequate for the foreseeable future; Johnson expects to refresh the repeaters and antennas in about four years. Johnson’s original goal was to provide wireless coverage of 95 percent of the campus area, 95 percent of the time, and he estimates that the system currently provides between 90 and 92 percent coverage. Though he is still working on filling in the gaps, he says he knew the project was a success “when people started complaining about small areas that weren’t covered. Before, it was just accepted that there was no coverage.” BBP

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Technology

Making MDU Deployments Easier We report regularly on technology tweaks that save big money in MDU and rural deployments. Here’s another batch. By Steven S. Ross ■ Broadband Properties

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endors have been working overtime devising ways to save money while adding flexibility and reliability to MDU deployments. Many twists and tweaks were on display at the FTTH Conference in Houston last fall (see also the October 2009 issue of Broadband Properties, p. 30). Corning Cable Systems’ Evolant MDU solutions included the new RPDpass outdoor and indoor MDU drop cable assemblies for existing mid- and high-rise structures, which use Corning’s bend-insensitive ClearCurve single-mode fiber (www. corning.com/clearcurve). Draka and Tyco are also eyeing the outdoor pathway to MDU installs.

Preview

More broadband technology innovations will be on display at the Broadband Properties Summit in Dallas, April 26–28.

enables quick subscriber connections at the residence. The new Corning FuseFlex termination system features a “near zero-length” pigtail. The stub fiber installed in the FuseFlex connector is polished in the factory. Draka (www.drakaamerica.com) showed its ezInterconnect with a variant of its BendBright-XS bend-insensitive fi-

The outdoor version of Corning’s system allows construction technicians to position pre-engineered drops along the exterior of a three- to six-story building. The outdoor version of Corning’s system (see pictures) allows construction technicians to position pre-engineered drops along the exterior of a three- to six-story building. The cable assemblies are tapered with single drops available every 10 feet, or one per story. The indoor version allows simultaneous, rapid deployment to six or 12 interior units. The characteristics of ClearCurve fiber allow the 1.65 mm staggered drops to be deployed in track molding for an aesthetically pleasing solution. The fieldinstallable OptiSnap connector tool kit

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ber that can take a pull of 300 pounds. The associated hardware should be available in the next month or so; Tyco Electronics showed some in Houston last October (see pictures). Greg Williams, director of marketing for Draka Communications ­­– Americas, says, “The cus-

tomer gets a fantastic new product and one that helps them achieve their green initiatives. Smaller and lighter cables will allow for more fiber capacity inside existing splice closures, cabinets and pedestals, and the potential is also there for hardware products to become smaller and more aesthetically pleasing.” The new drop cable is available with one to 12 fibers, gel or dry tube, and is armored. It bends in any direction and contains a single tube (see picture). The product is multipurpose and ideal for aerial, duct or direct-buried applications. It complies with GR-20 and RUS standards, and is available with indoor- or outdoor-style connectors and with HLC Scratchguard technology. (Scratchguard, developed by Megladon, heat-hardens the connector end face; it becomes essentially a tempered fiber mating surface capable of resisting scratches and repeated plug-ins.) Indoors, ADC (see pictures) and OFS have clever new distribution boxes, spools and on-floor patch panels. ADTRAN showed an MDU optical network terminal (ONT) blade box (see pictures).

About the Author

Steve Ross is corporate editor of BBP LLC. You can reach him at steve@broad bandproperties.com.

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Photos by Steven S. Ross

Technology

If you need to wire a premises from the outside, Corning has an elegant way to string the fiber. Note the spare fiber storage and the tension provider.

Calix (www.calix.com) introduced 15 new ONTs to its existing nine form factors, for mobile backhaul, MDU services, single-family homes and smalland medium-size businesses. “These 15 new ONTs provide our customers with unparalleled flexibility in deploying fiber access networks,” says Kevin Pope, senior vice president of product development. ONTs account for over two-thirds of a service provider’s electronics costs for fiber access equipment. Thus, ONTs factor heavily in the initial business case and play a major role in the ongoing economic viability of a fiber access deployment. More Outside Plant Tyco Electronics’ new CFP-compliant interconnection system provides pluggability for 40- and 100-Gbps Ethernet applications. The CFP-compliant components include a transceiver module plug connector, a host receptacle connector installed on the host board and associated guide rails, a receptacle cover, an external bracket assembly, a backer plate assembly and a riding heat sink

This slick box from Charles Industries supports direct interconnection or collapsed-ring designs for 24 to 48 fibers. It can be mounted on a wall or pole and exceeds GR-2898-CORE and NEMA 4 ratings.

(w w w.tycoelectronics.com/catalog/ menu/en/22645). Tyco Electronics “worked closely with CFP MSA specifications to develop a system that provides the challenging

levels of electrical and mechanical performance required by this next-generation interface,” says Michael Walmsley, Tyco Electronics product manager. The two-piece connector offers 148

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Technology

ADTRAN’s box provides easy termination in the basement or on an outside wall in MDUs.

positions, with signal-integrity performance levels over 20 differential pairs to support four-channel 40-Gbps and 10-channel 100-Gbps operation. The module plug connector straddle-mounts to the board within the transceiver module and the host receptacle connector surface-mounts to the host board. Emerson (www.emerson.com/sites/ Net work _Power/en-US/Products/) showed a robust slider mechanism that makes pedestal servicing easier (see pictures), and Charles Industries (www. charlesindustries.com) showed a slick pole- or wall-mounted fiber distribution hub as an alternative (see picture). Tokyo-based Hien Electronic Industries (www.hien.co.jp/e/index.html) became the second company to market a Slinky-like spiral hanger for aerial fiber deployments in rural areas (see picture). BBP

ADC’s OmniReach has well-thought-out features for easy deployment and maintenance. The box has uncommonly good separation between the connections technicians are most likely to need, and all other fiber.

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Technology

Putting the lid on: Tyco Electronics’ enclosure has a gasket that expands and tightens under pressure. Note lever that latches the shell in the field.

Draka’s bend-tolerant fiber in a drop cable that can take 300 pounds of tension.

GMP’s fitting for blowing fiber uses rugged stock parts – mostly standard plumbing items (www.gmptools.com).

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Technology

A new entry into the Slinky-like aerial fiber lashing derby comes from Hien Electric Industries. Sliding inner shields for pedestals are not always favored because sloppy technicians can wreck them. They’ll have a harder job with this variation from Emerson.

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Technology

Optical Tapping In Rural Applications System providers transitioning to RFoG find that a tapped architecture for fiber distribution reduces the learning curve. This architecture also offers many cost advantages. By Ian Dancel ■ CommScope

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or some system operators, the biggest challenge to serving low-density, rural areas is the cost associated with overcoming the great distances between headends and subscribers using a hybrid fiber-coax (HFC) network. The equipment required to reach a single subscriber in a rural setting typically includes a node, amplifiers and/or line extenders (see Figure 1). Add to that the cost of powering those devices in the field, and building and operating an HFC network to gain that rural subscriber quickly becomes cost-prohibitive. Why are so many actives required? As the RF signal travels in a coax cable, it attenuates at a predictable rate. Attenuation is also dependent on the frequency

Preview

Learn more about methods for rural broadband deployment at the Broadband Properties Summit in Dallas, April 26–28.

of the signal – there is more attenuation at higher frequencies. To ensure an adequate level of RF signal at the customer’s premises, that signal must be amplified to overcome the signal loss caused by the coax cable. However, signals cannot be amplified indefinitely. Only so many amplifiers can be cascaded without negatively affecting the quality of the signal. To make serving a low-density, rural area more economically feasible, the

number of actives in the field must be reduced – which means selecting a signal transport medium that has less attenuation and provides equal or better signal quality than coax. That medium is the fiber part of hybrid fiber-coax. Fiber Advantages Fiber optic cables have several advantages that make it an ideal medium to transport information over great distances for less cost. Most important

Figure 1: Traditional HFC Architecture

About the Author Ian Dancel is a broadband applications engineer at CommScope, supplier of the BrightPath FTTH solution. The BrightPath Team can be reached at [email protected]. Find out more about the BrightPath solution at www.commscope.com.

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Technology is that the signal attenuation associated with fiber is significantly less than with coax. For example, CommScope’s P3 750 series of trunk and distribution cables have a maximum attenuation of 48.6 dB/km (@ 750 MHz), while the maximum attenuation of a LightScope ZWP Type 8W single mode fiber is 0.22 dB/km (@ 1550 nm). Using fiber allows a signal to be transported farther without the use of amplifiers, reducing powering requirements in the field. This includes drop cable, which can be very long in rural applications. Another advantage is that fiber optic signals are immune to some of the distortion effects found in a coax network, such as ingress and common path distortion. In addition, egress or signal leakage is not a problem in the optical domain – a great advantage, considering the miles and miles of plant possible in a rural application. With fiber, the cost of performing cumulative leakage index (CLI) ride-outs or flyovers and repairing leakage to comply with FCC rules goes away. Why RFoG? FTTH is usually associated with the passive optical networks (PONs) used by telephone companies. For an HFCbased system operator, converting from an RF-based technology to a PON technology requires major changes. The PON world has its own set of equipment requirements in the headend, and the devices at the customer premises will also change. Installing and maintaining this new equipment requires personnel with the proper skill sets. An alternative to PON is another FTTH technology, RF over glass (RFoG). With RFoG, the equipment in the headend remains relatively unchanged, and absolutely no changes are required in the customer’s home. A system operator can use the same QAM modulators, CMTS and back-office systems in the headend and the same set-top boxes and cable modems in the home. The diagram in Figure 2 shows a typical headend configuration for an RFoG network. The downstream RF spectrum is fed into a 1550 nm, externally modulated laser transmitter. If necessary, the output of the transmitter

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Figure 2: Typical RFoG Headend Configuration

goes to an erbium-doped fiber amplifier (EDFA) and/or a 1:N optical splitter. The EDFA amplifies the 1550 nm signal and the splitter distributes the downstream signal to multiple feeder fibers in the outside plant. A wavelength-division multiplexer separates the 1550 downstream signal from the 1310 upstream signal. The 1310 signal is fed to a return receiver that converts the optical signal back to RF. On the side of the home, a network interface unit (NIU) converts the optical signal to RF, which feeds the coax network inside the house. The NIU also

The network interface unit converts the optical signal back to RF.

converts the return RF signals to optical for transport back to the headend. For a system operator that wants to take advantage of the benefits of fiber in a rural build, RFoG is likely to cost less and be easier to implement than PON. Architecture Options RFoG offers several ways to distribute the optical signal to the customer. In a centralized split architecture, each feeder fiber from the headend terminates in a cabinet in the field that houses one or more 1 x 32 splitters – one feeder fiber per splitter. Therefore, each feeder fiber supports up to 32 customers. From the cabinet, a high-count fiber cable distributes the signal to customers, and each customer has a dedicated fiber back to the cabinet. Another type of architecture is the distributed split. In this architecture, splitters are deployed in cascade and are pushed farther into the network. For example, a feeder fiber is connected to a 1 x 8 splitter and then, via a distribution fiber, to a 1 x 4 splitter farther into the network. Even in this case, each feeder fiber still supports up to 32 customers. Tapped architecture is a third option.

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Technology

Figure 3: BrightPath Node-Based Architecture

Tapped Architecture Advantages CommScope’s BrightPath solution is an RFoG technology based on a patented tapped architecture. Instead of using splitters in the field, BrightPath uses passive optical taps. Figure 3 shows one version of the BrightPath architecture – the node-based version. The other version does not have a node, and it’s called a direct feed. Notice how similar Figure 3 looks to a traditional HFC architecture. BrightPath components are basically optical versions of HFC components. This is part of the beauty of BrightPath. Because it is conceptually similar to HFC, the learning curve is not steep for a system operator that wants to deploy an FTTH network. The theory behind the BrightPath tap is the same as an RF tap. The BrightPath tap is spliced onto a single fiber. The tap couples off a certain percentage of the optical power, passing the remaining optical power through to the next tap. Additional taps can be spliced onto the same fiber as long as optical power is still available and no more than 32 customers are on that fiber. The coupled power is directed to the tap port, which feeds the fiber drop connected to the NIU at the side of the customer’s home (see Figure 3). BrightPath taps come in two-, fourand eight-port versions, each with varying tap values. Tap values are selected based on network design. The standard tap can be mounted aerially on a strand or in a 10-inch pedestal. Another version of the tap can be installed below grade. The tap is designed to accommodate various fiber optic cable types up to a 36-count fiber cable. The tap is also

equipped with a branch cable port to allow the operator to provide a dedicated fiber to a business customer, for example. Another way to accommodate serving business customers is by installing a coarse wavelength-division multiplexer (CWDM) module inside the tap. This module allows an operator to dedicate a pair of wavelengths to the customer. The versatility of the tap gives the operator the opportunity to serve both residential and commercial customers on the same fiber network. Tapped architecture offers several advantages in rural areas beyond the

advantages specific to RFoG. First, tapped architecture does not require high-count fiber cables in the distribution network. Centralized split architecture can potentially require 100 fibers or more in a single cable. For example, serving 160 customers using a centralized split in a low-density area may require a 160-count distribution cable going out a considerable distance from the field cabinet. A tapped architecture, on the other hand, may require only eight fibers in the distribution cable to serve the same number of customers.

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Technology The low fiber counts in a tapped architecture allow the use of smaller, lighter and less expensive fiber cables. In a rural area, where the majority of outside plant is usually aerial, smaller cables on the strand are easier to place and reduce sag and tension effects. Another advantage of tapped architecture is that it allows more efficient use of the optical power budget. In an optical splitter, each port output level is the same. With a tapped architecture, tap value can be selected to deliver the minimum amount of optical power needed at each tap location. deploying optical taps Frankfort Plant Board (FPB), a municipal service provider in Frankfort, Ky., deployed BrightPath last year in a small rural area of Franklin County. Serving this area with HFC would have required a new node. John Higginbotham, FPB cable-telecom superintendent, explains, “We had been considering using FTTH technology as a way to reach unserved

The BrightPath optical tap

to engineers and field personnel due to the similarity with HFC design.” FPB offers triple-play services and has achieved a 60 percent penetration rate in the BrightPath network. Franklin County is now considering additional BrightPath deployments; according to Higginbotham, “Our decision to deploy [BrightPath] was based on the realization that our HFC network would eventually be unable to support demands for increased bandwidth needed for faster cable modem speeds and additional CATV and HD programming.” A tapped RFoG architecture solves the challenges system operators face when extending services to low-density, rural areas. The benefits of an all-fiber network, combined with the simplicity of the tapped architecture, offer a compelling reason to start looking at rural areas for potential revenue. Furthermore, the capital expense and operational expense savings compared with HFC in this scenario cannot be ignored. BBP

sections of our service area and reduce maintenance and powering issues with our HFC network. The tapped architecture provides a concept that is familiar

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CES Cover age

Consumer Electronics Industry Continues to Drive Bandwidth Demand At the International Consumer Electronics Show held in Las Vegas in January, some 20,000 products were introduced or demonstrated. Here’s our selection of those that will have the most impact on broadband service providers. A BBP Staff Report

High-Definition Video Calling on the TV In January, Broadband Properties featured an article about high-definition, TV-based video communications as a potential new service that could drive demand for fiber to the home. No sooner did the article go to press than several companies demonstrated such services at the Consumer Electronics Show. The first service to arrive on the market, and the one most clearly targeted to consumers, will be from voice-over-IP (VoIP) provider Skype. The software, already available for download to PCs, delivers up to 720p HD-quality video at 1280 x 720 resolution, at up to 30

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Find out more at the Broadband Properties Summit about delivering smart-home applications over broadband networks.

frames per second. The hardware will arrive shortly – first for the PC version and then for the TV version. New HD webcams for PCs have already been announced by vendors such as faceVsion and In Store Solutions and are due out in early 2010. They will handle the video encoding and processing onboard, removing the need for a high-performance computer to encode the HD video. Some of these webcams include built-in microphones. I nter ne t- c onnected HDTVs with the Skype software will be available in mid-2010 from Panasonic and LG. Both companies will also Skype will offer a high-definition video calling service for both PCs and televisions. offer HD webcams

optimized for Skype video calls as separate accessories that can be plugged into the televisions. These webcams support 720p HD and include microphones and optics that can pick up sound and video from couch distance. To make high-definition calls, a user will need a high-speed broadband connection of at least 1 Mbps symmetrical bandwidth. Does the Skype offering require fiber to the home? Clearly, the service, which is positioned at the very low end of what can be called HD, was designed to work with new DSL and cable technologies, which, in theory, can support upstream bandwidth that exceeds 1 Mbps. In practice, however, few DSL or cable subscribers can access consistent upstream speeds of 1 Mbps; even where such speeds are offered, distance limitations and network congestion make uninterrupted 1 Mbps service unlikely. Whether DSL and cable providers can

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CES Cover age guarantee acceptable quality of service for Skype calls remains to be seen; if they can’t, then even this scaled-down version of high-definition video calling may drive users to fiber. In a CES keynote address, Cisco executives demonstrated a video communications offering that the company refers to as home telepresence but that uses an existing HDTV and broadband connection with a stand-alone set-top box. (Cisco’s business telepresence solution, which requires dedicated hardware, conference rooms and networks, gives users the feeling of being in the same room; using the same term for a TV-based video calling service seems questionable.) Cisco will begin home telepresence trials in the United States this spring with Verizon. Although Cisco offered fewer details than Skype, the service appears to require 1.5 Mbps symmetrical bandwidth, making it even more fiberdependent than the Skype offering. Polycom, the largest of the traditional videoconferencing vendors, also demonstrated a prototype of a home telepresence solution using 1080p HD,

CES attendees stopped to look at new televisions with 3-D capabilities and connections to over-thetop video sources.

the highest high-definition standard currently available. The solution appears to be a modified version of Polycom’s existing desktop telepresence solution, with IBM providing cloud-based processing. Polycom says its solution will “seamlessly integrate with company video and

telepresence networks,” suggesting that the company plans to market primarily to enterprises rather than to consumers. If this high-end service is priced for corporate budgets, it won’t be a “killer app” for fiber even if it requires fiber bandwidth. BBP

“The Year of 3DTV” Before CES was over, observers were already calling 2010 “the year of 3DTV.” Much of the buzz at this year’s show centered on 3-D demonstrations by major chip makers, device vendors and other participants in the 3-D ecosystem, as well as announcements by standards organizations and industry groups. 3-D– enabled televisions, screen projectors, set-top boxes, DVD players, computer displays, gaming consoles and even a device that projects volumetric images in the air all made their appearances at the show. The term 3DTV describes a set of technologies rather than a single technology. Anaglyph, an old, low-quality technology sometimes called entry-level 3-D, can be displayed on existing televisions and viewed with inexpensive two-color paper glasses. Anaglyph 3DTV services already exist; for example, Comcast offers 3-D movies on its cable VoD service, especially horror movies that it says cause

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customers to “scream and duck as lethal objects fly from the TV screen right in their own living rooms.” Higher-quality technologies are in the offing. According to the cable industry research group CableLabs, the next generation of 3DTV, using “framecompatible formats,” will work with cable companies’ existing plant and equipment, although these formats require viewers to invest in newer equipment. By packing two stereo images into a single video frame, cable providers should be able to provide high-definition 3-D images using their existing VoD and switched digital video infrastructure. Many of today’s set-top boxes will also support frame-compatible formats. To watch 3DTV in frame-compatible formats, viewers will need 3-D televisions (about 200,000 of the HDTV sets sold in 2009 are 3-D–ready, according to research firm Display Search) as well as more expensive glasses – either

active-shutter glasses or passive polarizer glasses, depending on whether frame- or line-interleaved technology is used in the TV display. Frame-interleaved displays present images for the left and right eye sequentially and require active-shutter glasses synchronized with the alternating frames. In line-interleaved displays, odd and even lines present different images for the left and right eyes, and passive polarizer glasses are used to filter them. To support even higher resolutions (1080p per eye) and frame rates (60 frames per second), advanced 3-D televisions will be available later this year, as will 1080p per eye Blu-ray players and discs. The 3-D Blu-ray devices will deliver images to the new televisions, to PlayStation 3 game consoles and to personal computers. CyberLink and ArcSoft both showed software, available in mid-2010, that will enable viewing of 3-D Blu-ray content on PCs equipped

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CES Cover age with powerful graphics processors. Finally, autostereoscopic 3-D – the socalled holy grail of 3DTV, which can be viewed without special glasses – is still many years from commercialization. Gamers will soon be able to play 3-D games in an actual three-dimensional environment, using NVIDIA’s 3D Vision Surround, a solution that spans 3-D content across three high-definition monitors or projectors. NVIDIA says that 3D Vision Surround “does for 3D PC gaming … what IMAX 3D does for movies.” XpanD, which sells 95 percent of all active-shutter glasses worldwide, unveiled its new X103 glasses, designed to work with a variety of computer monitors and televisions. The company says the glasses will be compatible with virtually any device capable of playing 3-D–encoded content at 120 frames per second, including video games, movies, TV and presentations. Bit Cauldron also demonstrated its upcoming stereoscopic 3-D shutter glasses for home televisions and computer screens. The Bit Cauldron technology uses IEEE 802.15.4 radios and synchronization technology along with fast, neutral-density lenses. The glasses will work with 3-D–ready televisions from several major manufacturers. Content for 3DTV A major obstacle for 3DTV has always been the lack of content for home viewing. However, new technology for autogenerating 3-D versions of 2-D content appears to have solved this problem. Samsung has included auto-conversion technology in its 3-D televisions; a more general solution, ImageIQ3D from HDlogix, can be embedded in any network or consumer electronics device. ImageIQ3D reconstructs the geometry of the video scene from 2-D video to create

Intel CEO Paul Otellini, in his CES keynote, discussed his company’s support for the 3-D revolution..

3-D images for any 3-D video display, even autostereoscopic displays that do not require glasses. JVC also introduced the IF-2D3D1 Stereoscopic Image Processor, a 2-D-to-3-D converter and 3-D L/R mixer for video content producers. In addition, made-for-3-D content is becoming more prevalent. Eighteen 3-D movies were released in 2009, 47 more are scheduled for release this year and plenty of new movies and games are being created for 3-D. Discovery Communications, Sony Corporation and IMAX Corporation announced a joint venture to develop the first 24/7 dedicated 3-D television network in the United States, aiming not only to become a leading 3-D content provider but also to drive consumer adoption of 3-D televisions. The new network will feature premium content from genres with 3-D

For the first time, there will be plenty of content for 3DTV. Technologies for converting 2-D content to 3-D have been developed, and new content is being created specifically for 3-D.

appeal – natural history, space, exploration, adventure, engineering, science and technology, movies and children’s programming. Discovery will provide affiliate sales and technical support, as well as 3-D television rights to its content and cross-promotion across its television networks. Sony will provide advertising/sponsorship sales support and will license television rights to 3-D feature films, music videos and games, while providing cross-promotion at retail stores. IMAX will also license television rights to 3-D films, provide promotion through its movie theaters and supply technology for image enhancement and 3-D. The new ESPN 3D network will broadcast live sports programming in 3-D, Disney Media Networks announced. ESPN 3D will showcase at least 85 live sporting events during its first year, beginning with the first 2010 FIFA World Cup match in June and continuing with additional World Cup matches, NBA basketball, X Games extreme sports, college basketball and college football games. Whether 3-D sports will appeal to consumers remains to be seen; analyst Kurt Scherf of Parks Associates points out that the traditional

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CES Cover age side-view camera angle is not much improved by 3-D. DIRECTV, which plans to launch three 3-D channels this summer, said it is working with at least eight networks to develop new 3-D programming that will debut in 2010-2011. Even user-generated content may soon appear in 3-D formats. In a CES keynote address, Intel CEO Paul Otellini said that PCs based on new Intel chips are powerful enough to create 3-D content, allowing individual users to create and edit 3-D video in real time. (Intel is also supporting the new generation of set-top boxes, media players and connected TVs with its Atom processors, and it collaborates with DreamWorks Animation on the InTru 3D technology that makes possible DreamWorks movies such as “Monsters vs. Aliens.”) Once users create their own 3-D movies, where better to upload them than YouTube? CES featured the first sneak peek at YouTube 3D, running on a

New active-shutter glasses from XpanD are compatible with many 3-D video devices.

3-D technology demonstration version of Adobe Flash Player and viewable with NVIDIA 3D Vision glasses. Will 3DTV Succeed? Consumer research consistently finds viewers favorably disposed to 3DTV. A recent Quixel Research survey of consumers who own HDTVs found that 46 percent had a strong interest in view-

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ing 3DTV in their homes over a cable or satellite connection. The Consumer Electronics Association’s research shows that 3DTV appeals to consumers once they have experienced it; 60 percent of those who had seen 3-D recently said they were willing to spend more on a 3-D– enabled TV. Research firm In-Stat found that 76 percent of consumers who had seen a 3-D movie in the past 12 months were interested in 3-D in the home. However, analysts caution that the transition to 3-D, or at least to higherquality versions of it, will be slow. The two major obstacles are • The cost of 3-D–enabled devices and multiple pairs of glasses, coupled with the fact that many consumers have recently invested in HD sets and are not ready to upgrade again. In-Stat calls pricing a major barrier, saying survey respondents are not willing to pay much of a premium for 3DTV sets and Blu-ray players. • Consumers’ reluctance to wear 3-D glasses on a regular basis once the novelty wears off. Some users experience eyestrain and headaches, and the dim lighting required makes TV viewing a less-than-social activity. In addition, as Kurt Scherf of Parks Associates points out, 3-D glasses may not be interoperable with different televisions; if you invite your friends over to watch the big game, the glasses they bring with them may not work. How Much Bandwidth? The bandwidth needed for 3DTV is still uncertain. CableLabs says that

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CES Cover age cable companies can deliver 3DTV in frame-compatible formats with only slightly more bandwidth than they use today for HDTV. Discovery Communications said its new 3-D channel will take up about the same bandwidth as an HDTV channel but then added that it would require a dedicated 6MHz (about 38 Mbps), which is the space that most

cable companies use to multiplex three HD channels. For higher-resolution versions of 3DTV, the bandwidth requirements will be higher – though how much, no one is saying. Keep in mind that 3DTV will take up not only cable channels but also over-the-top bandwidth as consumers begin to download and stream 3-D

files to their televisions, computers and smart phones. Though 3-D codecs have been designed with compression as a high priority, the additional information in 3-D files seems bound to add bulk. For example, the Multiview Video Coding codec used in the Blu-ray 3D specification adds about 50 percent to the file size beyond ordinary HDTV. BBP

Televisions (and Other Devices) Get Smart “2010 is the first year of the Internet era of television,” says Buddy Snow, a senior director of marketing at Motorola. Consumer research that Motorola conducted shows that consumers expect their televisions to seamlessly integrate traditional video with high-quality Internet video, also called over-the-top (OTT) video. Research firm In-Stat says OTT video services offer compelling alternatives to traditional TV viewing: Netflix, Amazon, iTunes and Blockbuster offer streamed or downloadable TV and movie content, and online TV programming portals, such as Hulu, TV.com and YouTube, have expanded into full-length video content. Hulu is now streaming more than a billion shows per month, and Netflix is among the top 20 video sites, according to ComScore. Within five years, nearly all broadband households in North America and Western Europe will own at least one Web-enabled media device, says In-Stat, which expects worldwide shipments of Web-enabled, stationary media devices to grow by nearly 60 percent each year over the next few years. Devices for Web-Enabled Video CE manufacturers have introduced a bewildering array of dedicated devices to deliver Internet video to the television, but only a fraction of them have succeeded in the marketplace. Many consumers don’t want to stack boxes in their living rooms or figure out how to connect devices. Although hooking up a PC to a television is relatively simple, only about one-sixth of consumers do this today. (Owners of

“Everyone is agreed that hybrid delivery is the way forward, with linear television broadcast as it is today and access to interactive and ondemand content ... delivered over broadband.” game consoles are more likely to watch Internet video on the TV; they already know how to connect the game console to the television.) Recently, the industry has focused on building Internet connections into devices the consumer will acquire anyway: the set-top box, the DVD player or, even better, the television itself. That way, whenever a consumer acquires a new video device, the Internet connection is already embedded. In addition to simplicity, this approach offers other advantages, including operational efficiency and new revenues for providers.

Georges Laplanche, senior vice president of Thomson’s Connect division, says, “Everyone is agreed that hybrid delivery is the way forward, with linear television broadcast as it is today and access to interactive and on-demand content from the same device on the same screen, delivered over broadband.” Several companies are jockeying to control the software platform on Internet-connected TVs. VUDU, which makes one of the more successful dedicated boxes, ported its Internet movie service last summer to several Internet-capable smart TVs. At CES, it

VUDU, which began as a broadband movie service using a dedicated device, has now launched an apps store for connected televisions.

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CES Cover age announced additional device partners and, more significantly, it introduced VUDU Apps, a platform that delivers multiple Internet applications to home theaters, HDTVs and Blu-ray disc players. VUDU launched VUDU Apps with Mitsubishi, SANYO, Sharp and Toshiba as partners and with more than 100 applications, including not only its own movie service but also third-party streaming video, music on demand, news, photo browsing and social networking services. Yahoo!, whose Widget Engine functions similarly to VUDU Apps, is now embedded in many new devices, including VIZIO and Hisense televisions and ViewSonic’s media player. Yahoo! also broadly released its Widget Development Kit, which gives developers and publishers access to the platform. New widgets include CNBC stock quotes, Napster music on demand, personalized weather channels and many Internet video sources. The approach taken by VUDU and Yahoo! promises to make Internet-connected televisions, which were introduced as walled gardens, considerably less walled in. DivX’s DivX TV, an embedded Internet TV platform, will also facilitate Internet video viewing on the television. DivX TV runs on digital televisions, Blu-ray players, gaming consoles, set-top boxes, multimedia storage devices and even mobile phones and will enable consumers to stream digital media content over home networks. DivX announced LG Electronics as the first manufacturer to license the DivX TV platform for upcoming Blu-ray players and home theater systems. DivX TV partners also include additional consumer electronics companies, integrated circuit manufacturers and technology companies; in addition, more than 70 content channels are already lined up. Samsung will launch an apps store for its TVs this summer, offering movies, games, news, weather, photo sharing, music and more. Consumers without Internet-capable TVs must rely on Internet set-top boxes or DVD players. For example, Thomson’s 805 HD platform for set-top boxes

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includes embedded memory to enable OTT services and other functions. (Shortly after CES, Thomson changed its name to Technicolor.) Samsung’s new generation of Blu-ray Home Theater Systems now have access to the company’s Internet@TV service, featuring Samsung Apps. These systems also have built-in Wi-Fi connectivity and Digital Living Network Alliance connectivity for sharing content with other electronic devices on the network. Another new approach is to use an Internet-enabled mobile device as a wireless set-top box. For example, semiconductor company Panovel showed technology for a wireless multimedia controller that could be embedded in a smart phone or similar device. Panovel says its iStream technology offers very low latency and 200 Mbps throughput and is implemented using low-power technology. On the audio front, BridgeCo announced the next generation of its JukeBlox platform, which adds Internet connectivity for streaming music to iPod docking stations, clock radios, minisystems, A/V receivers and more. The JukeBlox 2.0 platform integrates  streaming music apps – Pandora, Rhapsody, Napster and LastFM – with digital music content, such as iPod, DAB and Sirius satellite radio programming. Wholehome audio technology allows synchronized streaming music in every room in the house. The Dedicated Box Lives On The dedicated box sold directly to consumers is far from dead, although it’s a transitional product. According to Parks Associates, stand-alone media players will continue to sell well for the next few years, as long as there is still a substantial pool of consumers with no other way to bring Web video to the TV. One new box is small and inexpensive ($79): VNA Group’s IGUGU InterneTV, a handheld wireless remote that lets viewers direct computer- and Internet-based content to a television

The Syabas Popbox delivers Internet video content to the television.

or home theater. The remote doesn’t do it all; the PC has to be connected to the TV via cable or wireless. Another IGUGU wireless controller, the Gamecore system, transforms the PC into a video game console, letting gamers play Internet-based games in high definition on a big-screen television. Syabas’ Popbox, a small, open-platform set-top box priced at $129, supports just about every audio and video file type and recognizes content from the Internet, personal computers, camcorders and other devices. Syabas partners already include Netflix, Twitter and a variety of gaming, anime and music services. Another dedicated device garnering attention (and winning awards) at CES was the Boxee Box. Boxee began by offering software that let users with TV-connected PCs play digital media on a TV, share information with friends and post comments to social networks. Now, the company has teamed up with

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CES Cover age

Microsoft’s newest version of Mediaroom, its IPTV platform, is designed to integrate over-the-top video with traditional video services.

D-Link to make a dedicated box that runs the Boxee software. Internet-enabled picture frames, which have drawn attention at CES (and in stores) for several years, were back again this year. One of the most notable was eStarling’s TouchConnect, a touchscreen device that can be linked to a Gmail address and receive photos directly from an iPhone, a BlackBerry or an Android smart phone. It also syncs automatically with a variety of online photo sharing sites and plays e-mailed videos of up to 20MB. As the first 802.11n connected digital frame, it can take advantage of the new Wi-Fi standard’s more reliable connection and larger range. OTT Video and Service Providers Service providers understandably prefer OTT video to be an extension of traditional video service, rather than an alternative to it. Several are now experimenting with TV Everywhere two-screen or three-screen solutions; the latest is DISH Network, which announced a TV Everywhere service based on a Slingbox adapter. Microsoft’s new release of its IPTV platform, Mediaroom, is designed to support telcos’ TV Everywhere offerings. Subscribers can view broadcast video not only on a TV with a Mediaroom settop box but also on a Windows Media Center PC, an ordinary PC or a Mac,

an Xbox 360 and some smart phones. VoD may be offered on a wide range of devices that include televisions with non-Mediaroom set-top boxes. Microsoft’s IIS Smooth Streaming technology, integrated into Mediaroom 2.0, allows HD-quality VoD service with minimal buffering and fast start-up times over networks of varying bandwidths. This lets operators serve customers on a variety of fixed-line, wireless and, in the future, mobile broadband networks. Operators can also choose to deliver only VoD via the Internet. According to analyst firm Screen Digest, the top five Mediaroom customers generate on-demand average revenues per user that are on average three times those of the incumbent pay-TV operators in their markets. In-Stat predicts that many cable operators will soon introduce more comprehensive BBC iPlayer-like services for catch-up and on-demand program viewing. If they do, operators will have no shortage of platforms to choose from: Not only is BBC making its iPlayer available internationally, but Sky, the leading pay-TV operator in the U.K., is also now marketing its Sky Player in North America. (Ioko, the integrator that developed the Sky Player service and is now preparing to customize it for other operators, was also instrumental in developing the iPlayer.) Sky Player, originally designed for PCs, has been ported to game consoles,

connected TVs, set-top boxes, Blu-ray players and a variety of mobile devices. One surprising finding: According to Griffin Parry, director of on-demand content at Sky, when viewers watch TV on mobile devices, they tend to be inside the home; they see these devices as personal rather than portable. By adapting such preexisting platforms as Sky Player, rather than trying to develop their own software, operators can potentially reduce their time to market, says Scott Sahadi, ioko’s North American CEO. In addition, they can be assured of being able to support a variety of revenue models – advertising, subscription or transactional – and to integrate easily with scheduling, digital rights management and other backoffice systems. Finally, in addition to using online video to cement relationships with existing customers, operators are also using it to attract new customers outside their footprint. For example, satellite provider DISH Network will now distribute some of its international channels over NeuLion’s OTT service. DISH, which offers more international programming than any other U.S. operator, says the partnership enhances its international programming offering by making it available to consumers without access to satellite TV. Motorola, which supplies much of the hardware and software that service providers use to deliver video, offers some words of advice. According to Snow, Motorola research shows that customers of all ages are looking for the same three C’s: content, community and control. They want content to be plentiful, relevant and easy to find; they want easy sharing and communication with friends they’ve already established on Facebook and other social networks; and they want the control to customize and optimize the TV experience for themselves. Those three imperatives will drive the Internet era of TV – possibly the next decade or more. If operators can provide consumers with content, communication and control, Snow says, they can keep them as loyal customers even in the Internet era. BBP

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CES Cover age

Getting Serious: Health, Energy, Security CES isn’t all about entertainment. The show also featured connected devices and services with more serious applications, such as improving health care, conserving energy and securing homes. Jayant Dasari, an analyst at Parks Associates, says that bundling value-added services of this kind along with traditional telecom services offers providers the next major opportunity to increase average revenue per user. Swann Communications, which showed a variety of connected home security and video surveillance products at CES, had an unexpected opportunity to demonstrate its wares when an attendee stole a customer sign-in book from Swann’s booth. Not surprisingly, the company had positioned several of its security cameras to survey the booth; after reviewing the camera records, company representatives were able to apprehend the thief and reclaim the customer book. Industry coalition Continua Health Alliance and member companies A&D Medical, IBM, Nonin Medical, PDT, Renesas Technology, Tunstall Healthcare and ZyXEL demonstrated personal connected health solutions at CES. The demonstrations included connected health solutions for managing chronic medical conditions, using devices such as a Bluetooth blood pressure cuff and weight scale from A&D, a Bluetooth pulse oximeter from Nonin Medical and a Cypak USB converter cable that connects legacy devices to the Continua ecosystem. These devices can be combined with a HealthLink PC manager from Lamprey Networks that turns a PC into a home heath gateway, enabling Continua devices to deliver data to personal health records. ZyXEL devices provide communications gateways from the home network to the outside world. Laurie Orlov, founder of Aging in Place Technology Watch, has sized the market for technology to help seniors age in place at $20 billion by 2020. A new addition to this market is CloseBy Network’s remote monitoring solution, which runs on the Control4 platform and is designed to allow elderly or dis-

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A company selling connected video surveillance products had an unexpected opportunity to demonstrate its wares after its customer sign-in book disappeared. abled people to live independently for longer. A combination of sensors and software tied to a secure Web application lets families choose what to monitor, how to receive the information and who should receive alerts. The system can send alerts when the monitored person leaves the house and returns, gets out of bed, opens the refrigerator or the medicine cabinet – or when there is no activity for a specified length of time. The system establishes the person’s normal living pattern and then alerts relatives if anything changes. CloseBy Network’s solution is one of many designed for the Control4 platform. At CES, Control4 announced the 4Store, the first online apps marketplace designed specifically for the smart home. The 4Store features apps for such tasks as customizing Kwikset deadbolt locks, controlling energy usage with

Eaton outlet monitors and monitoring overall home energy use. The company also announced that 14 device manufacturers had recently joined its partner certification program and were committed to launching more than 25 product lines in 2010. Kwikset won awards for its SmartCode with Home Connect product line, which includes both deadbolts and soon-to-be released lever products. These allow homeowners to use a Webenabled cell phone, the Internet, or a security touch panel to check door lock status, automatically arm and disarm a security system and receive text notification when someone has entered the home. The products can communicate wirelessly with other home devices, such as lights, thermostats and entertainment systems, and allow customers to rekey their locks quickly and easily.

Kwikset locks can be remotely controlled via the Internet.

Low-Cost, Flexible Home Automation Services CES home automation awards also went to U.K.-based connected home provider Intamac Systems and its partner, networking solutions provider D-Link, for their Home Monitoring Starter Kit and Home Energy Monitoring Starter Kit. The products, manufactured by D-Link and powered by Intamac’s cloud-based service platform, provide home security, energy management and telecare solutions that service providers and utilities can offer as affordable, value-added services. Intamac provides the managed service and user interface for D-Link’s offerings through its Home Manager platform, a Web-based system that can push and manage content via mobile devices and social networking sites. For

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CES Cover age Intamac, this is the first time a major manufacturer has developed an entire line of devices specifically to work with its platform, but according to CEO Kevin Meagher, the platform is almost infinitely adaptable. “Anything in the home can phone you, e-mail you or text you information, or link to other devices,” he explains. “I can take a 30-year-old [security] system on a POTS [plain old telephone service] line and link it to an IP camera; when the alarm goes off, it will reach down to the camera and tell it to start filming. The two devices don’t have to be paired. … You don’t have to rip out the old stuff, and you don’t have to have a lot of intelligence and decision making – that’s all in the cloud. You don’t have to have a gateway to control it in the home.” Meagher sees security as the application most likely to pique consumer interest in home monitoring. “Lots of people would like to open and close the door remotely,” he says. “If you have a door lock with a keypad, you can give the consumer a low-cost way to remotely control the door and reprogram it. You could give someone [a repair person, for example] a PIN number and a time window so you can allow temporary usage and then wipe out the memory of that code. Because it’s in the cloud and not in the door lock, you can bar that code from being used again. That door lock and functionality costs less than $99 in the United States, so it suddenly becomes affordable.” Once consumers become accustomed to simple functions such as remote door control, Meagher says, they are more willing to invest in energy monitoring, telecare and controllers for other in-home devices – such as plugs that measure power consumption and turn off devices that are on standby. The biggest impact on the consumer, of course, will be from the remote control of heating and cooling. By keeping the heat turned off all day and turning it on remotely when leaving the office, a consumer can potentially reap major energy and cost savings. Consumers will be able to buy the D-Link devices in retail stores and purchase premium Intamac services through

D-Link. (The basic level of service will be free.) The products and services will also be white-labeled so a telco or a utility can deliver a turnkey system and add its own brand to the interface. The Connected Life Intamac’s strategy is to work with device manufacturers rather than to become a manufacturer itself. Meagher says, “If we partner with companies that know that space, we can achieve better price points. We’re looking to add value to other people’s products.” In keeping with that strategy, Intamac joined an unusual alliance called ng Connect – a multi-industry initiative launched last year by Alcatel-Lucent that now includes 27 infrastructure, device, content and application providers. Through a series of joint development agreements, the ng Connect group is brainstorming and testing “solution concepts” that take advantage of highbandwidth networks – especially the 4G wireless networks that are beginning to be deployed this year. Many of the solution concepts it is developing center on the LTE Connected Car, a 2010 Toyota Prius with in-vehicle services that include navigation, personal security, vehicle wellness, and infotainment. Alcalu’s vice president of emerging technology and media, Derek Kuhn, explains, “A lot of the magic is just in getting folks together – it allows us to build out some solution concepts, take them to consumers and enterprises and get real feedback. We’re doing primary research, and understanding where things might go. It’s a fantastic opportunity.” Kuhn says ng Connect’s testing and focus groups reveal which applications will drive bandwidth use on LTE networks and which are likely to cause problems for the networks. This research will help service providers decide which services to launch on their new networks. He adds, “The car is a big smart phone on wheels. It can use things like MIMO [multiple-input, multiple-output, a type of smart antenna technology] that cell phones can’t. It’s very exciting to the research science folks and to folks like me, the consummate geeks.” At CES, the ng Connect Program demonstrated these new concepts:

• Safe At Home – Intamac worked with QNX Software Systems and Alcatel-Lucent to integrate its home management capability into the LTE Connected Car. Riders will be able to manage home systems such as lighting and temperature control from any of the car’s four in-vehicle touchscreens. • Anywhere Mobile Gaming – GameStreamer, a digital distribution network for video games, worked with Alcatel-Lucent to bring its game storefront to portable devices ranging from handhelds to the LTE Connected Car (passenger seats only!). LTE networks can support high-bandwidth, low-latency games that have no chance of working on 3G networks. • CelebMap – BUZZMEDIA populates maps with local celebrity events, photos, news and gossip, based on GPS-determined locations. CelebMap works on LTE Connected Car touchscreens and smart phones. • Connected Camera – Upload and store high-definition pictures with associated text, geotags and audio files. • Crowdcasting – Real-time streaming of video recorded on a mobile phone to a TV screen. Contacts are alerted to the new video via a pop-up message on the TV and can switch to the live video stream. • Video-Enhanced Interactive Digital Signage – A prototype HD display from digital signage provider MediaTile combines live two-way video communications with simultaneous interactive promotional messages. Although most of the current research and prototyping involves LTE, Kuhn says, “Ng Connect is not about LTE but about being connected. The vision is really about being contextually relevant. … We’re working through things like being on an HDTV telephone experience, then pausing and moving to the car and continuing in the car, or vice versa. We’re very interested in all kinds of connected devices – tablets, netbooks, mobile devices, custom devices, even machine-to-machine.” BBP

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T h e C o n n ecte d H o m e

Home Networking Strategies For Service Providers Residential gateways will be service providers’ point of contact with networked homes, allowing providers both to reduce their provisioning and support costs and to offer a multitude of new services to consumers. By Kurt Scherf and Jayant Dasari ■ Parks Associates

A

s providers seek to win new subscribers and boost average revenue per user, converged services will become their dominant strategy. Operators are investing heavily to provide more and faster broadband access to consumers, with networking the cornerstone to the strategy for converged services. This new service emphasis has reinvigorated interest in the residential gateway (RG) concept. More and more broadband and triple-play service providers are now using residential gateways to terminate broadband access services. These devices can help to configure and manage home network settings, reduce or prevent customer support calls and serve as launching points for new connected-home services. The RG is an attractive solution for a number of reasons: It offers cost improvement and increased processing power over other consumer electronics options, it can serve as a single point in the home to focus control, and it is always on. Service providers need more control over home networks if they are to deliver converged services and manage in-home distribution of content and communications. RGs help providers build and deploy better networking services – and give them a window into home networks, which providers can use to diagnose network problems and problems with specific devices. For operators, the clear benefit of managed RGs is in saving operational expenses. By automating diagnostics

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Preview

Parks Associates will be a research sponsor of the Broadband Properties Summit in Dallas, April 26– 28.

and troubleshooting of the broadband modem and RG, operators are able to eliminate, or at least shorten, customer support calls. Operators automate in two ways: The modems are auto-configurable for both initial service activation and service upgrades, and providers can automatically detect and solve home networking configuration issues without subscribers’ knowledge. Operators that deploy remotely configurable and manageable RGs are realizing operational cost savings north of 30 percent due to reduced phone calls and truck rolls. Long-term benefits for operators, beyond having happy customers, include reduction in capex, efficient application development and deployment and the role of the RG as a digital rights management/conditional access mediator.

From the consumer perspective, a managed RG’s benefits are in the basic home networking functions – broadband sharing, printer sharing, centralized media management and sharing – that typify home network use today.

Expansion Capabilities The true benefit of the RG is in its ability to expand. An RG can connect to multiple devices, including TVs and mobile phones, in addition to PCs, so as a home acquires new devices, the provider already has a device in place to accommodate this expansion. With RGs in place, operators will be able to expand future services to subscribers, offering seemingly ubiquitous access to content as well as other fields of services. Given its expansion capabilities, the RG naturally inspires speculation about what will be a killer value-added-services

About the Authors Kurt Scherf is vice president and principal analyst at Parks Associates, where he analyzes technology-driven products and services. He can be reached at scherf@ parksassociates.com. Jayant Dasari is a research analyst at Parks Associates covering access services with a focus on residential television and broadband segments.

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T h e C o n n ecte d H o m e app in the near future. Operators will find significant traction by creating multidevice services around the value-added service categories of entertainment, lifestyle, premium technical support and home and health management. Specific possibilities include the following: • A centralized backup solution in the home and a backup on the Internet. To date, network-attached storage products are too difficult to use. There will be improvements, but at the same time, consumer storage companies are taking a segmented approach to the market, offering not only high-end central-storage products but also smaller, portable devices that provide easy backup. • Home automation and smart energy. The energy grid is getting more complex related to demand and supply. Government initiatives and stimulus funds, with their emphasis on energy conservation and greater efficiency, have stoked demand for residential energy-management technologies. • Home monitoring through devices such as webcams. • Health care services. • Services that expand access to and control of video services. GlideTV, ZeeVee, Rippol, Boxee and Sen-CE are among the many companies developing user interfaces that aggregate Web content, which they will then license to CE companies. Companies such as Syabas (Popcorn Hour), D-Link, Seagate, NETGEAR and Cisco Linksys will continue to add functionality to their Web-content set-top boxes, with a real focus on premium video and other high-end content. Content owners are starting to shift their thinking about how users access content from multiple devices. “Digital locker” strategies such as the Digital Entertainment content Ecosystem (DEcE) and Disney’s Keychest reflect new thinking about how content can move more freely on the home network and among connected devices, as companies traditionally involved in conditional access and copy protection are focusing on new technologies that will expand usage rights to more devices.

The RG Versus the STB Consumers today have multiple TV sets in the home, which in the set-top box (STB) paradigm would require multiple instances of the STB in order to extend service to all TVs. The debate of RG versus STB is essentially one of whether

been no clear consensus, at least from service providers, on which platform they will be using for the foreseeable future. One factor in favor of wider RG adoption is the growing adoption of Internet-connected TV sets. These devices, provided they become more prevalent, could offer providers a platform

“The most significant trend in the CE industry is the connectivity of tens of millions of devices to online content and services. ... Web-connected CE will grow to more than 200 million in 2013.” – Kurt Scherf, Parks Associates or not to integrate intelligence into the STB, making it more RG-like, while not making the full investment in a fullscale RG deployment. This hybridization of the STB is quite common now, especially since there has

that would substitute for the basic STB functions, while providers focus the reception and distribution functions for video content in the RG. The RG also makes it easier to enforce digital-rights management and content security.

s e t a l u t a r Cong

Broadband Properties Magazine

For becoming the Tote Bag Co-Sponsor at the 2010 Broadband Properties Summit. For more information on Trilithic, visit www.trilithic.com. You are cordially invited to come see Trilithic at the upcoming

April 26 – 28, 2010 InterContinental Hotel – Dallas Addison, Texas The Leading Conference on Broadband Technologies and Services To Exhibit or Sponsor, contact: Irene Prescott at [email protected], or call 316-733-9122. For other inquiries, call 877-588-1649, or visit www.bbpmag.com.

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BROADBAND PROPERTIES Marketplace To reserve space in this section and LEVERAGE the power of your advertising via print, digital, and multimedia exposure in the global market, contact Irene Prescott at 316-733-9122 or email [email protected].

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ADC 77 Advanced Media Technologies 19, 76 AFL Telecommunications 9, 76 Alcatel-Lucent 7 Atlantic Engineering 76 AT&T Inside Back Cover, 76 Blonder Tongue 78 Broadband Properties Magazine 49 Broadband Properties Summit 2010 13, 37, 38-44, 68, 75, 79, 80 Calix 76 Clearfield 24 Connexion Technologies 78 Corning Cable Systems Back Cover, 77 COS Systems 64 Design Nine 78 DirecTV 1, 77 Great Lakes Data 63, 78 Greenfield Communications 78 Hiawatha Broadband 77 Montclair Fiber Optics 78 Multicom, Inc. 77 NorthStar TeleSolutions 63 OFS 33 PBC 21 Quanta Services 5 RVA, LLC 11, 76 Suttle 48 Verizon Enhanced Communities Inside Front Cover, 77

Website www.adc.com www.amt.com www.afltele.com/go/stimulus www.alcatellucent.com/ tripleplayexpress www.atlanticengineering.com www.att.com/communities www.blondertongue.com www.bbpmag.com www.broadbandproperties.com www.calix.com www.clearfieldconnection.com www.connexiontechnologies.net www.corning.com/cablesystems/ ftthprograms www.cossystems.com www.designnine.com www.directv.com www.cablebilling.com www.egreenfield.com www.hbci.com www.montclairfiber.com www.multicominc.com www.northstartele.com www.ofsoptics.com www.privatebroadband.com www.quantaservices.com www.RVALLC.com www.suttleonline.com www.verizon.com/communities

MARK YOUR CALENDAR

The Leading Conference on Broadband Technologies and Services

April 26 – 28, 2010 InterContinental Hotel – Dallas Addison, Texas “… our experience at the show this year was tremendous! You and your team did a great job recruiting top notch attendees during a tumultuous market. My sales team set meetings with key retrofit targets and managed to engage potential future developer partners of which we were previously unaware.” – Carter Steg, Executive Vice President, Corporate Sales and Marketing, Connexion Technologies To Exhibit or Sponsor, contact: Irene Prescott at [email protected], or call 316-733-9122 For other inquiries, call 877-588-1649, or visit www.bbpmag.com

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March 23 – 25 OFCNFOEC San Diego Convention Center San Diego, CA 202-416-1975 www.ofcnfoec.org 24 FTTH Council Workshop on National Broadband Plan & FTTH Best Practices Sheraton Raleigh Hotel 613-226-9988 ext. 7 www.ftthcouncil.org April 10 – 15 NAB Show Las Vegas Convention Center Las Vegas, NV 202-429-5300 www.nabshow.com 26 – 29 Broadband Properties Summit InterContinental Hotel – Dallas Addison, Texas 877-588-1649 • www.bbpmag.com June 24 – 26 NAA Education Conference & Expo Ernest N. Morial Convention Center New Orleans, LA 703-518-6141 www.naahq.org September 12 – 16 FTTH Conference & Expo Venetian Resort Hotel & Casino Las Vegas, NV 613-226-9988 www.ftthconference.com 12 – 16 BICSI Fall Conference & Exhibition MGM Grand Hotel & Convention Center Las Vegas, NV 813-979-1991 www.bicsi.org

| BROADBAND PROPERTIES | www.broadbandproper ties.com | Bonus Spring Issue

Connected Communities How they use it is up to them. How you profit is up to you. OFFER AT&T CONNECTED COMMUNITIES,2 and your tenants get to customize their ideal mix of voice and Internet connectivity, with superior options that include U-verse TV solutions and complimentary access at thousands of Wi-Fi locations. And you’ll profit from our competitive commissions program. Visit att.com/communities to find out how offering greater flexibility can also flex your income. S t r e t c h .

att.com/communities Watches sports. Blogs about sports. All at the same time.

Out for coffee now, recording shows for later.

© 2009–2010 AT&T Inte llectual Property. All righ ts reserved. AT&T, the AT&T marks contained herein are trademarks of AT&T logo and all other AT&T Intellectual Property and/ Subsidiaries and affiliates or AT&T affiliated compani of AT&T Inc. provide prod es. ucts and services under the AT&T brand.

Runs her business from her PDA.

Evolving Solutions for Today and Tomorrow

Wouldn’t it be nice to invest in a sure thing? To spend money only when you know there will be a return? Yeah, we think so too. Corning Cable Systems preconnectorized solutions are designed around the idea that networks should be scalable, and capital expenditures should generate revenue. Our Premier and Advantage solutions substitute fixed costs with variable ones, eliminating stranded assets and giving you more control over your cash flow. Don’t invest another dollar in your network until you’re sure it will go to work making money for you. Remember, if it doesn’t make dollars, it doesn’t make sense. www.corning.com/cablesystems/evolant

© 2010 Corning Cable Systems LLC

Everytime. Everywhere. Evolant.