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• Verizon Concierge - Offering lifestyle amenity management including resident alerts, community web portal and more • Verizon Home Control - Remotely unlock doors, monitor cameras, manage energy use and more, all coming soon via the FiOS network

Fill your units with the ultimate network! Contact a sales representative today. VISIT verizon.com/communities CALL 1.888.376.5472 *Service usage and content availability restrictions apply. Flex View not currently available in Buffalo, NY. FiOS available in select areas. Actual speeds may vary. Battery back up for standard fiber-based voice, FiOS Digital Voice and E911 (but not other voice services) for up to 8 hours. Call for details. ©2011 Verizon. D3375-1

Puzzle Solved! After 30 years and 900,000 access lines, Brian Schrand has a passion for building fiber networks. The challenge of building a high-performance network – on time and within budget was a complex puzzle that didn’t seem to have an answer. He knew when he saw the Clearview Cassette, that it was an industry-changing technology that could reduce the cost of fiber deployment in the central office, OSP and access network. Andy Betscher, field operations specialist at Cincinnati Bell concurs, “The simplicity of the Clearview Cassette and its ability to be installed into different enclosures gives our technicians the ease and efficiency we need to significantly minimize labor cost.” Join us the first Tuesday of every month at www.FiberPuzzle.com for a live web-based discussion group on fiber challenges – and solutions.And to get our take on a fiber deployment puzzle you’re currently facing, drop Brian a note at [email protected].

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Coming Soon: Broadband Properties is changing its name.

BroadbandCommunities

Why Is BroadBand ProPertIes ChangIng Its name?

A conversation with Scott DeGarmo, CEO of Broadband Properties. Q. Why the name-change? Will the magazine’s mission and content change too? A. It’s always a big step when a well-established publication changes its name. We are changing because we’ve expanded our coverage from our original focus – private cable service in multifamily housing – to a much wider one, advanced broadband and its impacts on communities of many kinds. Many of the changes reflected in the new name, Broadband Communities, have been introduced over the past six or seven years. So, while the new name in some ways marks a beginning, it also confirms changes already made.

Q. Why didn’t you change the name earlier? A. Broadband Properties has been a strong brand with a positive identity. We held onto it until we felt we’d truly expanded beyond the scope of the name. Q. Why is this a good time to change your name? A. It’s best to change from a position of strength, and that is where we are in terms of our outstanding editorial product, the ongoing success of the Summit, our audience growth and our continually expanding online offerings, including webinars. Q. The property owners you serve shouldn’t have a problem with your new name. A. Right. They view their properties as communities, and advanced broadband is one of their major tools for creating a sense of community. Connectivity not only brings residents closer to the outside world but also helps them interact with one another. Q. The magazine also serves towns and cities and the municipal officials who make decisions about broadband. A. The term “community” resonates with these leaders, who see advanced broadband as a way to strengthen their communities economically and improve their quality of life. Economic development professionals, educators and broadband champions share the same view. And, by the way, it’s not just towns and cities. Broadband is vital to all kinds of communities, ranging from student living to retirement villages, and from brand-new planned-unit developments to 200-year-old farming communities. Q. What about telcos, cable companies, utilities and other providers? A. They serve communities as well – in fact, many of the smaller providers have long traditions of involvement with the rural communities they serve. Our coverage of the challenges and successes of deploying advanced broadband in various kinds of communities has relevance to all types of network builders. Q. “Community” also suggests strong connections between people and emotional involvement. Is that what you are trying to convey in a magazine about telecommunications? A. An example: We just received an invitation to a street party in Florida to attend the launch of a fiber-tothe-home network. The invitation was charged with words like “excitement” and “celebration.” While you could view it as just a marketing event, citizens do indeed view such launches as important milestones for themselves, their families and their communities. Q. What about your website? Will that change? A. We have the URL broadbandcommunities.com, so we will make that the new destination for visitors. We will also have an abbreviated form of that name for ease of use. Q. Many magazines have made the switch entirely to digital. Is that coming? A. We will continue to increase our total circulation – with readers of our digital editions, including a planned iPad edition, gradually becoming a larger portion of the mix, based on their own choice. ExPAndEd AUdIEnCES • nEW EdITORIAL FEATURES • AddEd COnTRIBUTORS • dIgITAL & PRInT PUBLICATIOnS • MORE E-nEWSLETTERS • REFURBIShEd WEBSITE • WEBInARS • InTERACTIvE dATABASES • LEAd gEnERATIOn • BLOgS • CUSTOM RESEARCh • TARgETEd EMAIL BLASTS • vIdEO • ChARTER Ad RATES • InTEgRATEd MARkETIng • PROgRAMS • vIRTUAL EvEnTS • RESEARCh • CUSTOM PUBLIShIng • AUdITEd dATA

Editor’s Note

Everything’s Up to Date In Kansas City

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 7 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 © 2011 Broadband Properties LLC. All rights reserved.

4

The Google fiber project in Kansas City has captured the nation’s attention.

A

s everyone with enough interest in broadband to read this magazine already knows, Google recently announced the location for its first gigabit fiber network: Kansas City, Kan. That’s great news for the citizens of Kansas City and maybe for other cities whose turn will be coming soon. Although the newspapers of the other 1,100 communities that submitted proposals to Google all ran headlines with variations on “Google Snubs Us,” project leader Milo Medin made clear that, if all goes well, Google intends to build similar networks in multiple cities. Strong support from the governor, mayor and schools chief; enthusiastic participation by community organizations that included a university medical center, a tech industry alliance and a foundation supporting entrepreneurship; and access to physical infrastructure that will make the buildout cost-efficient were all reasons that Google gave for selecting Kansas City. Yet dozens of other applicants had similar assets, so commentators have been working overtime speculating about the real deciding factor. Does Google plan to buy Sprint, which is headquartered nearby? Does it intend to contract out the installation to SureWest, which also operates in the Kansas City area? Will Kansas City-Wyandotte County’s unified government allow Google to expand the network with a minimum of red tape? If you’re attending the Broadband Properties Summit, you will have a chance to ask Megan Stull, telecom policy counsel

for Google, when she speaks at the Economic Development Program. (I can’t promise she will divulge the answer.) Our Google Moment More interesting than why Google selected Kansas City is what will happen as a result. From a technical standpoint, this project is not radically new, even for the U.S. The competitive provider Paxio has operated an open-access gigabit fiber network in the San Francisco Bay Area for several years. EPB Fiber Optics, the municipal provider in Chattanooga, Tenn., offers 1 Gbps service throughout the city. Case Western Reserve University has a gigabit fiber pilot program in a low-income neighborhood of Cleveland. (EPB and Case are represented at the Summit, too.) A number of other FTTH operators offer gigabit service to businesses. Google is different because – well, because it’s Google. People all over the country pay attention to what Google says, and in this case, it should have much of interest to say. By sharing publicly what it learns about deploying fiber, about making the open-access model work and about new high-bandwidth applications, the company could, in effect, conduct a crash course on broadband for the entire country. We hope that the project will make FTTH a household word. So welcome Google, welcome Kansas City, and welcome the gigabit era!

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

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Table of Contents DEPARTMENTS

HOT PRODUCTS

Editor’s Note . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Advertiser Index. . . . . . . . . . . . . . . . . . . . . . . 132 Calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132

Broadband Properties’ 10th Annual List of Leading Broadband Technologies and Services | 26

IN THIS ISSUE Provider Perspective New Perspective From Old Headlines | 8

By Bryan J. Rader ■ Bandwidth Consulting LLC Today’s ‘game changers’ may turn out to be next year’s also-rans.

Owners Corner Bulk Services Make Sense for Student Housing | 10

By Henry Pye and Chris Acker ■ RealPage Inc. Bulk service agreements may have lost favor in conventional housing, but they are still important in student housing communities.

Metrics Performance Metrics: Beyond the Noise Factor | 12

By David Daugherty ■ Korcett Holdings Inc. Proactive steps that property owners can take.

Property of the Month Horizon Bay at Hyde Park, Tampa, Fla. | 16

By Joe Bousquin ■ Contributing Editor, Broadband Properties In the first new retirement community built in Tampa in 20 years, fiber services help residents stay active and engaged.

Fiber Deployment Strategies Allied Fiber Nationwide Network Uses Bold New Approach | 20

By Joan Engebretson ■ Telecom Writer Allied Fiber’s unusual design promises to bring fiber access to hundreds of smaller, bypassed communities around the country.

The Law Cable Home Wiring Rules and Cable Competition | 40 By Carl E. Kandutsch ■ Attorney MDU owners trying to foster cable competition may be able to use FCC rules that were devised for consumer protection purposes.

FCC to Impose New Disability Access Rules on Service Providers | 44 By Robert D. Primosch ■ Wilkinson Barker Knauer LLP The FCC is developing new rules for making video, VoIP, messaging and videoconferencing services more accessible.

Industry Analysis Consolidation in the Telecommunications Industry | 46 By Jill Kasle ■ Th­e George Washington University A generation ago, Judge Greene broke up the telecom industry. Now, the pieces are reassembling in new ways.

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Learn about this year’s latest and greatest broadband products … and then see them at the BBP Summit.

Cover Story FIBER-TO-THE-HOME PRIMER: Advantages of Optical Access | 51

The fifth annual edition of the Fiber-to-the-Home Primer, produced in association with the Fiber-to-the-Home Council, is a comprehensive guide to FTTH for builders, developers, municipal officials and service providers.

Independent Telcos FTTH and Independent Telcos | 48

By Masha Zager ■ Broadband Properties More than 100 new telcos were added to the list since last year.

Modeling the Cost Of Rural Fiber Deployment | 106

By Masha Zager ■ Broadband Properties A new study provides the first reliable rural FTTH cost model.

Technology Making the Most of a Fiber Network | 110

By Irit Gillath ■ Telco Systems A small ILEC in Alaska offers sophisticated Carrier Ethernet services and mobile backhaul. Here’s how it’s done.

Fundamental FTTH Planning and Design: Part 2 | 114

By David Stallworth ■ OFS Proper placement of fiber routes can have a great impact on cost.

Municipal Fiber Networks Community Fiber Networks Succeed Through Marketing | 118

By Craig Settles ■ Communities United for Broadband Marketing involves learning what customers expect – and meeting those expectations.

Worst Practices in Community Broadband | 122

By Andrew Michael Cohill, Ph.D. ■ Design Nine Inc. Ten mistakes community broadband networks make (and how to avoid them).

Building a Nationwide Open-Access Network | 126

By Ronald Corriveau ■ COS Systems By automating service management, a Swedish network operator costeffectively manages the networks of more than 40 municipalities.

Broadband Apps The Low-Latency Service Opportunity | 128

By Brian Quigley ■ ADVA Optical Networking How low can you go? Financial trading firms are willing to pay a premium for low-latency services. Other industries will follow them.

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

We’ll give your residents what they want—even before they know they want it. Technology is magical. The excitement it creates turns us all into kids again. If it also makes life easier, we put it to work. A good example is Time Warner Cable 4G Mobile Internet. Customers didn’t know they wanted the speed and freedom of Internet on the go. Now, they can’t live without it. You expect nothing less. Time Warner Cable delivers. To learn more about partnering with Time Warner Cable, simply contact Joanne C. Luger at 703.345.2749 or email [email protected]

© 2011 Time Warner Cable Inc. All rights reserved, Time Warner Cable and the eye/ear logo are trademarks of Time Warner Inc., used under license.

Provider Perspective

New Perspective From Old Headlines Video streaming is heralded as the death knell for the cable industry. Now, where have we heard that before? By Bryan Rader ■ Bandwidth Consulting LLC

S

ometimes looking back at history helps us gain perspective on today’s trends. For example, consider January 10, 2000. The business headlines that day all concerned a merger that created a “digital media powerhouse.” The press was celebrating a new force in the media and cable industries. A new player was in town. The cable guys should be shaking in their boots. What had happened? America Online had bought Time Warner for $182 billion in stock and debt. The deal “combined the nation’s top Internet service provider with the world’s top media conglomerate” and “redefines what the next generation of digital-based leaders will look like,” the newspapers asserted. Many said the alliance was unbeatable. People called it a game changer and a winner and said the merged entity would be an all-star platform that would impact music, publishing, news, entertainment and cable. However, the AOL offering never justified these expectations. Yes, a cosmic shift seemed to be occurring. Suddenly, almost 30 million users were paying $19.95 each for dial-up AOL Internet connections. AOL was new. It was fresh. It was a great way to send and receive content. But a game changer? Not quite. Consumer behavior was changing and content consumption was moving online, but none of that radically impacted the cable business. So many smart people got it wrong. Ted Turner supported the merger. Dick Parsons approved it. Gerald Levin com-

8

mitted to it. And Steve Case – well, he was too busy counting the beans he earned from the deal to worry about it. Within 10 years, AOL became a sleepy collection of websites, and its 30 million subscribers signed up for broadband from Comcast, AT&T or FiOS. Is This Another AOL Moment? Which of today’s headlines will be interesting to revisit in a decade? How about “Netflix Tops 20 Million Subscribers” or “Why Netflix Will Beat Cable in the 21st Century”? Yes, there is incredible enthusiasm for streaming movies to computers and iPads – enough to make Amazon, RedBox, Roku, Apple and others jump into this business. But although these third parties may have created the category and have surely captured consumers’ interest, cable companies are still clearly in the driver’s seat. Cable operators own the pipe to the consumer. We can offer movie streaming as part of a cable subscription and provide real quality of service as well as content on demand. Netflix and Amazon just offer collections of content running on someone else’s network. In fact, the new entrants are slowly commoditizing their own movie-streaming businesses.

Ten years ago, people thought AOL would redefine the cable business. Experts said AOL would buy AT&T Broadband and become the leading provider of cable services in the United States. Yes, AOL was first in the online world and developed a very attractive product, just as Netflix has. But it wasn’t sustainable, and it certainly wasn’t a game changer. The same is true today for Netflix. It’s a great concept, and it’s very cheap. However, it has not led to the cord-cutting that many predicted last year, and it has not even led to declining cable bills. In fact, Cablevision recently surpassed $150 a month average revenue per customer. Wow! Netflix, like AOL before it, is an incremental service. There is room on the shelf for this product and others like it. But as cable operators catch up by increasing their on-demand video libraries, headlines will change once again. Rereading old AOL headlines can help us put the Netflix effect into perspective and share this insight with our clients. Strong operators see the videostreaming trend as an opportunity rather than an event that shifts power to the new players. I can’t wait to read those headlines in 10 years. 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 | March/April 2011

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Owners Corner

Bulk Services Make Sense For Student Housing Bulk services are often criticized, but there are good reasons to continue offering them in student living communities. By Henry Pye and Chris Acker ■ RealPage Inc.

N

early every purpose-built student living development today provides bulk video and Internet services. Although bulk services may be debatable for conventional multifamily housing communities, including bulk video and Internet services in a student resident’s rent has been and continues to be a good idea. Every student housing community fills up with new residents over a one- to two-day period at the beginning of the fall term. Initiating service in such a short time for so many residents would be logistically difficult without using bulk services. Most retail services are designed to accommodate single-family homes and work well enough in conventional multifamily communities. In student housing, in the absence of bulk services, the sheer number of move-ins over a short period would cause residents to have to wait at least a week to get their services up and running. The fact that many residents never meet their suite­mates until movein day would further delay coordination and ordering of services. Waiting a week or more for services would be disastrous in student housing. Broadband might as well be water for students. It’s not just about entertainment – students have real academic needs for broadband when classes, which now almost always have online components, begin shortly after move-in. Leasing teams in student communities face a bizarre incongruity: Even though their prospective lessees are the greatest users of video and Internet services, they have had no experience

10

purchasing these services either at home or in on-campus housing. Moreover, competing leasing teams are teaching students the cost savings and efficacy of including video and HSIA in the rent. avoiding equipment deposits Because most students have slim credit histories, they often incur significant deposits for equipment. Digital cable TV, fiber to the premises, IPTV and other advances provide wonderful new services, but they exponentially increase the cost of the customer-premises equipment (CPE) required. Students without bulk services could once obtain video and Internet services with little effort, no equipment and very low deposits, if any; now, many face hundreds of dollars in deposits and highly involved installations. Although parents and others can cosign leases, cosigning service agreements is next to impossible. Creditworthiness and deposits have historically suppressed demand for upgraded video and Internet services. Notably, as student living communities began to include the requisite CPE in bulk services, upgrades increased significantly. Bulk services also offer value to student living communities. Well-negotiated bulk services can cost as little as 25 percent of equivalent retail services (though calculations are difficult because there are often no retail analogies for student

bulk Internet packages). Offering retail services also risks angering residents or their parents, many of whom already feel nickel-and-dimed by the time they complete move-in. Requiring a service contract for basic video and Internet services that other student housing communities include in the rent will ensure that some residents and parents feel cheated. In addition, parents prefer lumping as many costs as possible into one rent check. Finally, management can use bulk Internet services to communicate with residents and enforce timely rent payments. Most bulk multifamily solutions now include messaging systems. Some are simple captive portals that force residents to a community Web page at login; more advanced systems allow communities to send messages of differing levels of urgency to individuals or groups of residents and get acknowledgements of receipt. Many providers now allow management to slow down Internet speeds of residents who are late paying their rent. Finally, various community systems and services, ranging from access control cameras to iPads used for leasing, can piggyback onto bulk Internet services. Though the strategy is often misunderstood and criticized, offering bulk video and Internet services for student living communities still makes sense for many reasons. BBP

About the Authors Henry Pye is vice president of Velocity Advisory Services for RealPage (www.realpage. com). He can be reached at [email protected]. Chris Acker is director, Velocity Advisory Services for RealPage and can be reached at [email protected].

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

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Performance Metrics: Beyond the Noise Factor How a network is designed and provisioned affects an Internet provider’s ability to deliver satisfactory services. By David Daugherty ■ Korcett Holdings Inc.

W

ith the growing reliance on Internet access, good Internet service is far more than an amenity – it’s a necessity. Conversely, poor Internet service isn’t an annoyance; it’s a deal breaker. In the age of social networking, irritated residents don’t take long to make themselves heard. A single resident, using social sites such as Facebook and Twitter, can have a significant impact on occupancy rates.

cussion provides some insight into these topics and their relationship to Internet performance. Ultimately, the industry needs a metrics-based vernacular that will facilitate the assessment of how well Internet service providers are performing in real time. Internet Uptime Internet uptime is the percentage of time that Internet services are available

Waiting for residents to make noise is a dangerous method of measuring service quality; by the time an accurate measurement is available, residents may have moved out. Measuring uptime, bandwidth, oversubscription ratio and infrastructure quality allows owners to be more proactive. In the last Metrics column, we talked about resident noise as a firstorder measure of Internet service quality. However, waiting for residents to make noise is a dangerous method of measuring service quality; by the time an accurate measurement is available, residents may have moved out. Measuring uptime, bandwidth, oversubscription ratio and infrastructure quality, which are typically specified in service agreements, offers a better chance of catching – and fixing – Internet service problems before they drive residents away. The following dis-

12

to residents, excluding regularly scheduled maintenance outages. For example, a “four nines” service level means that services are available 99.99 percent of the time, or 525,895 of the 525,948 minutes in a year. Internet uptime provisions in service agreements have their origins in com-

mercial services. For some larger corporations, minutes of downtime can equate to millions of dollars in lost revenue. In that case, a definitive value can be assigned to every minute of Internet downtime. For residential services, however, the costs of downtime are not as clear. At what point, for example, does a multipledwelling unit (MDU) asset manager begin to see degraded financial performance due to poor Internet services? Residential services do not typically exceed three nines (99.9 percent uptime), much less four nines, and are almost always provided on a best-effort basis. Best-effort basis is an alternative to the complex quality of service (QoS) control mechanisms typically provided in commercial networks. High-quality communications services can be provided over a best-effort network by overprovisioning bandwidth so that it is sufficient for the expected peak traffic load. The resulting absence of network congestion eliminates the need for QoS mechanisms. Bandwidth Provisioning To deliver 2 Mbps x 2 Mbps services to 100 residents, a provider could simply multiply the number of residents by the size of the pipe (100 x 2 = 200 Mbps). Provisioning 200 Mbps of bandwidth would be a very expensive solution, however.

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

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

Property Bandwidth Recommendations per 100 Residents Property Cap With Upselling (Mbps)

Contractual Cap (Mbps)

Resident Base Rate (Mbps downstream and upstream)

Residents/ Beds

10

5

1x1

100

12

6.25

2x2

100

14

7

3x3

100

15

7.5

4x4

100

16

8

5x5

100

17

8.5

6x6

100

18

9

7x7

100

19

9.5

8x8

100

20

10

9x9

100

21

10.5

10 x 10

100

Figure 1: Oversubscription allows providers to share bandwidth among customers.

every unit, occupied or not), the contractual cap is the bandwidth needed to deliver services to each resident. The property cap is the bandwidth actually deployed to the property, which may be sufficient to allow residents to purchase

Success story NO.9

How is it possible to deliver 2 Mbps x 2 Mbps service to 100 residents with anything less than a 200 Mbps pipe? It’s simple: Oversubscribe a smaller pipe. Oversubscription is how ISPs have sold bandwidth since the Internet was born. It is possible because most Internet data traffic typically occurs in short bursts. Serving a large group of users with a small pipe works because the total cumulative bandwidth required at any time is a small fraction of the cumulative bandwidth that would be required if all users generated constant-bit-rate traffic. Figure 1 illustrates the bandwidth required to deliver bulk Internet services using oversubscription. For example, the bandwidth required to deliver 5 Mbps x 5 Mbps service to each resident is 16 Mbps for every 100 residents. As the demand for constant-bit-rate services increases, so will the bandwidth required to provide bulk Internet services. In a bulk service arrangement (a wholesale purchase agreement in which the owner agrees to buy services for

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bandwidth upgrades through Internetbased service management portals. Oversubscription Ratio In an MDU environment where residents share bandwidth, oversubscrip-

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Infrastructure Rating Management Services Potential Rating Design standards compliance with ring or star topology 1 1 Management portals for residents with bandwidth on demand 1 1 Real-time traffic management 1 1 Captive portal messaging 1 Network equipment management and monitoring 1 Post-installation 24 x 7 help desk support 1 1 Access to ongoing performance metrics 1 1 Total 7 5 Percentage of total rating 21.21% Site Connectivity Fiber connectivity to MAN installed and tested 1 Fiber connectivity from MDF to IDFs installed and tested 1 Spare fiber from MDF to IDFs installed and tested 1 Bandwidth compliance testing to MDF and unit ports 1 Cat 5e connectivity from IDFs to unit installed and tested 1 Total 5 Percentage of total rating 15.15% Network Equipment Standard compliant network equipment Centrally managed switch configs Installed spares Total Percentage of total rating

1 1 1 3 9.09%

MDF Power properly grounded equipment and equipment rack 1 Wire management and strain relief 1 Optical and electrical termination into patch panel 1 Room security 1 Room air conditioning 1 Uninterruptible power supply (UPS) 1 Out of channel connectivity (terminal server) 1 Total 7 Percentage of total rating 21.21% IDF Power properly grounded equipment and equipment rack 1 Electrical and optical termination into patch panel 1 Wire management and strain relief 1 Redundant optical connectivity to MDF 1 Room security 1 Room AC 1 Conditioned power 1 Total 7 Percentage of total rating 21.21% UDF/Unit Power properly grounded 1 Redundant Cat 5e connectivity to IDF 1 UDF security 1 Marked Cat 5e wall plates 1 Total 4 Grand Total 33 Percentage of total rating 12.12% Total Rating 100.00% Infrastructure Rating 66.67% Figure 2: A sample infrastructure scorecard

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1 1 1 3

1 1 1 3

1 1 1 1 4

1 1

1 1 4

1 1 1 3 22 66.67%

tion refers to the ratio of the allocated bandwidth per user to the advertised bandwidth per user. Underlying the oversubscription model is the fact that only a few users will attempt to use their allocated bandwidth simultaneously. In a DOCSIS cable network, for example, the full 38 Mbps download bandwidth is typically shared by 500 subscribers, each of whom is allocated up to 7 Mbps. Dividing the maximum total bandwidth (property cap) of 38 Mbps by the maximum number of simultaneous users (500) gives an average bandwidth per user (contractual cap) of 0.076 Mbps, roughly two orders of magnitude less than the advertised peak bandwidth per user of 7 Mbps. In this example, the download oversubscription ratio is 92 to 1. A similar calculation can be performed using upstream bandwidths. Advertised DOCSIS upload rates are typically 4 times less than download speeds. If 100 subscribers, each allocated 1.75 Mbps of upload bandwidth, share a single upstream channel, the upload oversubscription is 17 to 1. Infrastructure The quality of network infrastructure has a direct impact on the quality of services a provider can offer. The infrastructure rating matrix shown in Figure 2 highlights a number of the pitfalls that could cause service delivery problems down the road. The matrix in Figure 2 assumes an Ethernet network for several reasons: First, Ethernet is the newer and more flexible successor to coax-based data infrastructure. Second, there is a finite number of design, installation and support parameters required to build and support reliable Ethernet networks. Finally, the limited number of parameters makes for a fairly straightforward means of rating infrastructure. In this example, there is no messaging system, and the network equipment is not monitored. The result is a 5 out of 7 score for management services. This rating system was designed for owners and property management companies who need to rate property infrastructure as part of acquisition due diligence. BBP

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

Bring It On! What does the future hold? When it comes to the broadband future, the possibilities are endless. Already, Over-The-Top (OTT) video is making its way into homes and is predicted to dominate the bandwidth supply for the next few years. Additionally, entire 3D video walls are being developed for the future that could allow for a near virtual experience — from becoming part of a sporting event to exploring the depths of the ocean. For service providers, the future means one thing…the demand for high-performance, bandwidth-intensive applications will continue to grow. At ADTRAN we say, Bring It On. We recently added Packet Optical Transport System (P-OTS) functionality to our industry leading Total Access® 5000 broadband MSAP that can provide 400 Gbps over a single fiber pair. As a service provider, it’s time to ask yourself…..Can my network handle the future? What will your customers expect? What will you be able to deliver?

ADTRAN is ready to help you Access Your World. Visit us at booth #306 and see why we say, Bring it On!

CN927A110810TELCODIR Copyright © 2011 ADTRAN Inc. All rights reserved. ADTRAN and Total Access are registered trademarks of ADTRAN, Inc.

adtran.com Total Access 5000

Horizon Bay at Hyde Park Tampa, Fla.

By Joe Bousquin ■ Contributing Editor, Broadband Properties

In this issue, for the first time, we showcase a fiber-connected senior living community – Horizon Bay at Hyde Park. Our thanks go to Verizon’s Eric Cevis and Cliff Lee and to Horizon Bay’s Michael Shaw for assistance in preparing this feature.

J

ust because retirees enjoy a slower pace of life doesn’t mean they want slow Internet connections. When Horizon Bay Communities, a senior living management company that operates 94 communities in 19 states, started building its flagship properties in its hometown of Tampa, Fla., it knew it needed more than the Mediterraneaninspired design, granite counters and abundant lifestyle and activities programs that its other communities are known for. Horizon Bay wanted to use cutting-edge technology to enable its residents to lead meaningful lives enhanced by strong connections to family and the world at large. In fact, that’s the cornerstone of the company’s philosophy: helping residents feel at home while staying fully connected and full of life. Now, residents at Horizon Bay Hyde Park, a 136-unit mid-rise that is the first new senior living community built in South Tampa in 20 years, can stay connected with a 150 Mbps Verizon FiOS connection deployed over a GPON backbone. Bulk video programming

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“One of the biggest success stories has been watching our residents take advantage of the common-area amenities, watching TV together or getting online at the Internet café.” is included in the rent, and residents can take both fiber-based Internet and phone services on an à la carte basis. In addition to the services delivered to individual apartments, Horizon Bay at Hyde Park also offers 14 commonarea televisions as well as complimentary Wi-Fi in common areas. The common-area connections not only provide organic gathering places

to bring residents together but also allow them to experience the Internet communally. “Really, one of the biggest success stories of rolling out the Verizon FiOS network here has been watching our residents take advantage of the common-area amenities, watching TV together or getting online at the Internet café,” says Michael Shaw, executive director of Horizon Bay at Hyde Park.

About the Author Joe Bousquin is a contributing editor to Broadband Properties and a journalist with more than 15 years’ experience writing about finance, real estate and technology. You can reach him at [email protected].

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

ber 2010. During this six-month period, the Verizon construction team worked in concert with the developer to meet key milestone dates. Date services started being delivered? FiOS services were made available to the property during the first week of November 2010, when Horizon Bay’s first residents moved in. Technology The following responses were provided by Eric Cevis, vice president of Verizon Enhanced Communities. The Starbucks Internet Café offers wireless access for Horizon Bay residents.

Who knows – the residents may even be connecting with their grandkids on Facebook. Vital Stats Property Description: Horizon Bay at Hyde Park is the first independent-living and assisted-living retirement community built in South Tampa in more than 20 years. The 136-apartment community is the flagship of the growing Horizon Bay portfolio. The state-of-the-art community features beautifully appointed apartment homes in a Mediterranean-style, six-story building. Each apartment boasts nine-foot ceilings, a full kitchen, granite countertops, walkin closets, ceramic tile and carpet flooring. Horizon Bay at Hyde Park is located in the historic Hyde Park area of South Tampa and features an Internet café, a library, a fitness center, a game room, a pool and a bar and lounge area, complete with views of Tampa Bay. Residents enjoy dining, housekeeping, scheduled transportation, wellness programs, and a full schedule of programs and events. Horizon Bay at Hyde Park embraces an approach to life that creates meaning, purpose, inspiration and fulfillment. It strives to shatter stereotypes and honor residents for the unique lives they have led and the interesting stories they have to tell.

Greenfield or retrofit? Greenfield Number of residential/commercial units 136 residential units and 15 commercial, business and office suites. High-rise/mid-rise/garden style? Mid-rise, 6 stories Time to deploy? The fiber deployment was started at the beginning of May 2010 (in coordination with the builder’s construction schedule) and completed at the end of Octo-

How does fiber get to the property? Fiber is delivered to the ground-floor communications room via a buried conduit system that exits at the right of way. The distribution splice point and fiber distribution hub are located nearby. How is fiber distributed inside the building? From the communications room and splice point, six fiber optic terminal tails are pulled through a 4-inch riser to deliver one terminal to each floor. Corning ClearCurve fiber drop cables are routed through

Older Americans and the Internet Seniors, though at first slow to start going online, are now accessing the Internet in droves. According to the Pew Internet and American Life Project’s 2010 survey, nearly 60 percent of adults between 65 and 73 go online, and Internet use among 70- to 75-year-olds has nearly doubled since 2005. Shopping online is particularly important for seniors who no longer drive, as is staying in touch with families and friends. The same Pew survey found that older Americans are also adopting social networking faster than any other demographic. The group found that the use of social networking has quadrupled since 2008 among Internet users 74 and older and said that sites such as Facebook may be especially appealing to seniors who want to reconnect with people from their past, find support communities for chronic diseases or connect with younger generations. Other studies suggest that seniors with robust Internet access may live healthier lives. The Phoenix Center, a public policy organization in Washington, D.C., found that seniors who regularly go online are 20 percent less likely to suffer from depression. The Semel Institute for Neuroscience and Human Behavior at the University of California, Los Angeles, found that using the Internet helps keep older brains sharp. Then, there’s the fact that home automation and other robust applications such as telemedicine are gaining traction. In sum, a fat Internet pipe is becoming as important for seniors as it is for 14-year-old gaming fanatics.

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Optical network terminals are mounted in closets, where they are out of sight, and inside wiring is hidden away behind drywall. the interior walls into the closet of each unit, where the drop is left coiled in a flush-mounted slack storage box until service is requested.

Who provides support? If residents have an issue or technical challenge, whom do they call? Verizon has a dedicated center for Verizon Enhanced Communities Value Program subscribers for ordering, billing and other account-related questions. For technical assistance, it offers a 24/7 Fiber Solutions Center. The property is also supported by a representative from Verizon Enhanced Communities’ Customer Advocacy Group, local operations and marketing services.

What is the FTTH technology? GPON What type of gear is being used? Motorola optical network terminals, set-top boxes and routers; fiber distribution equipment from ADC (now TE Connectivity) . How did you deal with wiring and plug access within the units? We worked with the developer to pre-position the inside wiring inside the wall studs prior to the drywall installation. We also worked with the developer to have electrical outlets placed adjacent to the ONT/5x5 slack storage fiber drop locations. Have you provided wireless signals within units? Verizon deployed one dedicated fiber optic drop to each unit. Each resident who orders FiOS Internet services is provided with a wireless router when the service is installed. Services Does the building have triple-play services? Yes, triple-play services are available. Are there amenities beyond triple play or IP systems for managing the property? Horizon Bay at Hyde Park provides

Fiber cable is routed from the main communications room to a fiber distribution terminal on each floor. The flexible tubing on the left contains fiber from the main comm room, and the drop cables for the individual units exit on the right.

wireless access in the Starbucks and café area, a fully wired surroundsound theater room and 14 commonarea televisions. Who is the wireless service provider? Verizon Do residents have a choice of service providers? No. Verizon has an agreement with Horizon Bay to provide bulk TV services through the FiOS network. Residents also have the op-

Property of the Month Highlights: Horizon Bay at Hyde Park, Tampa, Fla. • Luxury mid-rise community offering independent-living and assisted-living services to retirees. • First new retirement community built in South Tampa in 20 years. • Triple-play Verizon FiOS services including bulk video and à la carte telephone and Internet. • Internet speeds up to 150 Mbps/35 Mbps. • Equipment from Motorola, Corning and TE Connectivity. 18

tion of adding FiOS Digital Voice and FiOS Internet services. All Verizon FiOS connection speeds are available to the residents of Horizon Bay, from our 15 Mbps downstream and 5 Mpbs upstream all the way to our newest speed of 150 down and 35 up.  Speeds of 25/25, 35/35 and 50/20 are also available. 

Business Who owns the network? Michael Shaw, Horizon Bay: We own the wiring in the units and have a separate homerun wire back to the communications closet for our future use.  Verizon owns the backbone and the home-run wiring to the demarcation point at the terminus of the interior wiring, located inside the communications closets. Was there a door fee? Michael Shaw: Yes, $150 per door. Are services automatically included in the rent? Eric Cevis, Verizon: Yes, FiOS TV Prime HD package is included as part of the amenities package, including an HD set-top box. Incremental services, including FiOS Internet and phone service, may be ordered directly by the residents. Who handles billing and collection? Eric Cevis: The contracted bulk video service is billed directly to the developer. Any package upgrades, additional services or products ordered directly by a resident are billed directly to the resident by Verizon. How are the services marketed, and by whom?

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

Subsurface precast concrete ground vaults provide technicians with access to underground facilities, typically at splice or distribution terminal locations.

After leaving the fiber distribution terminal, the drop cables are routed into microducts that provide pathways to each unit. The microducts have room for additional fiber that may be needed in the future.

Eric Cevis: Verizon Enhanced Communities provides brochures and other marketing materials about FiOS services on-site for residents, and a dedicated account manager works with the property management staff to organize and host on-site informational events to explain the services to residents. On-site Experience/ Lessons Learned What was the biggest challenge?  

Michael Shaw: As with any deal, negotiations were the biggest challenge. It was challenging, at points, to get all the right decision makers in the loop, and we had to negotiate a marketrate deal with Verizon so we could make sure both we and our residents realized value from the bulk services. At the same time, Verizon needed to manage its own interests. For instance, the escalation clauses in the contract came very close to killing the deal, but we were able to come to a mutually acceptable solution. What was the biggest success?  Michael Shaw: Watching our residents use the common-area space with Verizon TVs or the Internet café while enjoying the cornerstone of the Horizon Bay experience: feeling at home, full of life and fully connected. What would you say to owners who want to deploy a similar network?

In each master bedroom closet, the microduct and fiber drop cable were pre-positioned inside the wall during construction. An ONT will be placed here when service is requested. An electrical outlet is positioned close by to power the ONT.

Michael Shaw: Make sure you deal with the decision makers in any organization right from the start. When you get into the details of something like this, a myriad of decisions needs to be made at each step, so communicating with the individuals who have the authority to proceed at each juncture is critical. 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?

Two computers are set up for resident use near the Internet Café.

Eric Cevis: Because the fiber deployment took place during the construction phase, before any residents had moved in, the developer was able to eliminate any concerns regarding disruption to its residents. All the necessary hardware and other wiring equipment is in place and was carefully designed to require minimal disruption to activate services as new residents move into their units. BBP

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Fiber Deployment Strategies

Allied Fiber Nationwide Network Uses Bold New Approach With dark fiber to major interconnection points and colocation facilities every 60 miles, the company aims to provide unprecedented network access for community networks, data center operators and others. By Joan Engebretson

B

y some measures, the Allied Fiber network is the most ambitious fiber network build to have been planned for at least a decade. It uses a network architecture not quite like anything that’s ever been built before. And if CEO Hunter Newby’s vision is correct, the network’s mere existence should

use the Allied Fiber network to easily reach those traffic exchange points. “We come from a world of solving interconnection problems,” says Newby, who previously was chief strategy officer for Telx, a pioneer in the neutral colocation market. Newby expects the Allied Fiber network to attract a diverse mix of

The Allied Fiber network is expected to attract rural network operators and community networks seeking economical connectivity to Internet points of presence. vastly improve the economics of bringing first-mile fiber networks to communities that, to date, have struggled to support broadband business models. Ultimately, Allied Fiber’s own business model isn’t as much about the network as it is about interconnecting other carriers. Allied Fiber will not be installing its own transport equipment. It will sell long-term dark fiber leases to other carriers, which will light their own networks. Importantly, the company’s plan includes a network presence in major carrier traffic exchange points in critical markets such as New York, Miami and Seattle, enabling network operators that

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companies that range from small rural network operators and community networks seeking economical connectivity to Internet points of presence to international carriers seeking a low-latency way to cross the North American continent. Exploiting Pent-up Demand The Allied Fiber plan seems to be resonating with the right people. “There’s a known need in the industry for new in-

frastructure between markets, given the lack of available dark fiber,” comments Ben Edmonds, executive vice president of sales and marketing for FiberLight, a company that has built fiber networks in 21 markets in the southern half of the United States. “You always want to exploit where there’s a limited supply and pent-up demand, and that’s what Allied Fiber has tried to do.” The Allied Fiber network, Edmonds says, could be complementary to the metro networks FiberLight already has deployed. “A multitenant fiber build has a lot of value to our customers,” comments Jim Poole, general manager of global networks and mobility for Equinix, the company whose carrier-neutral colocation facility in Ashburn, Va., will be a tether point for Phase 1 of the Allied Fiber network. The connection to the Equinix exchange will give Allied Fiber easy access to an existing base of 190 network providers already connected to the exchange. Phase 1 of the Allied Fiber network – interconnecting New York, Chicago, Ashburn and points in between – is nearing completion, and with four more

About the Author Joan Engebretson is a Chicago-based freelancer who has been writing about the telecom industry since 1993. She can be reached at [email protected].

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

Fiber Deployment Strategies phases still to go, Newby notes, “We have a line out the door of banks that want to finance Phase 2.” New York to Chicago, and Points in Between What makes the Allied Fiber network unique is its use of two separate highcount dark fiber bundles that run in parallel. The company refers to one fiber batch, consisting of 432 fibers, as its long-haul network and the other, with 216 fibers, as its short-haul network. There is also an empty fiber duct for future expansion. Local and regional network operators will be able to tap into the shorthaul network almost anywhere along the fiber route. It won’t be necessary to run a connection all the way to a major metro market. Every 60 miles, the optical signal needs regeneration, and at each of those points, carriers will be able to interconnect with other carriers via a crossconnect, to shift traffic from the shorthaul to the long-haul network and to colocate transport equipment, such as dense wavelength-division multiplexing equipment, switches and routers, but not servers. Although Allied Fiber expects to generate much of its initial revenue from long-term leases (known as indefeasible rights of use, or IRUs) on dark fiber, the company’s ultimate prize is the re-

Local and regional network operators will be able to tap into the short-haul network almost anywhere along the fiber route. curring revenue it expects to earn from colocation in the Allied Fiber–owned colo-regen facilities along the route. This approach is a far cry from the way most fiber networks are designed. Traditionally, carriers could tap into fiber networks only in major metropolitan areas. Fiber might pass through smaller markets like Toledo and Altoona, but often there was no way to connect to it. Newby argues that this goes a long way toward explaining why smaller markets with populations between 25,000 and 300,000 tend not to have high-speed broadband availability. “Nobody is building fiber to the anything in those towns,” says Newby, noting that some entire towns have only a DS-3 connection to the public Internet. “The choke point you can’t get around is backhaul,” Newby argues. “You can build in town but not to New York.” One nationwide network operator that has architected its network with onand off-ramps primarily in major metro markets is XO Communications, and that company is beginning to see the

Phase 1 of Allied Fiber’s network is nearing completion, and four more phases are planned.

logic of Allied Fiber’s approach. Don MacNeil, vice president of operations for XO Communications, notes that for years the company’s network passed through Charlotte, N.C., without picking up or dropping off traffic there. “Two years ago, we decided to create a stop there, and we were able to open the market very easily,” recalls MacNeil. XO now is looking at the possibility of using the Allied Fiber network as a means of serving some of the smaller markets along the Allied Fiber route. MacNeil cites the hypothetical example of a local Pennsylvania ISP that might obtain more economical Internet connectivity by using new XO facilities running over dark fiber from Allied Fiber. “I can take him to my big Internet router in New York and give him better economics,” MacNeil explains. DIY Attitude Needed Newby is quick to offer up some compelling data about Phase 1 of the Allied Fiber network. More than 130 towns within a mile of the Phase 1 network have populations between 25,000 and 500,000, he says. With Allied Fiber paving the way for economical backhaul connectivity, Newby says, it shouldn’t be difficult for those markets to support local broadband builds. But communities shouldn’t count on carriers to step in, he cautions. “Some towns are stuck in the mindset that someone will bring them broadband,” observes Newby. “But you have to have a do-it-yourself attitude.” Increasingly, towns and municipalities are realizing that, Newby says. He points to the Axcess Ontario network in upstate New York as an example of what towns and municipalities can achieve on their own. (Axcess Ontario is run by a public-benefit corporation set up by

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

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Fiber Deployment Strategies More than 3,000 counties have populations of around 100,000. All could benefit from fiber networks constructed like Allied Fiber’s. Ontario County, N.Y.) “They [the county] have 100,000 people. They built a fiber ring that they lease to eight providers. They did it on their own. They put up the money. They spent $5 million to build a 200-mile ring.” The 130-plus communities along Allied Fiber’s Phase 1 route are wellpositioned to do the same thing, Newby argues. But he doesn’t stop there. “There are 3,140 counties in the U.S. with an average population of 100,000,” notes Newby. “That means there are that many opportunities to build the same kind of network and link them all. And the Allied Fiber approach is the bridge to link them all.” Unfortunately, Allied Fiber isn’t planning to reach every one of those counties. Nevertheless, Newby says, “You have to do this for all of America. I’ll share my model with anybody and encourage them to do this where I’m not.” Allied Fiber’s Genesis Newby honed much of his thinking about open access and carrier-neutral interconnection seven or eight years ago at Telx, which started out as an international provider of wholesale minutes. Many carriers had to interconnect with one another within the carrier exchange at 60 Hudson Street in New York City, and as Newby recalls, “Everyone was in 60 Hudson, but they weren’t in the same place.” Telx established a platform that enabled carriers to easily interconnect with one another at the physical layer, then extended that approach to other key carrier meeting points, eventually making carrier interconnection the focus of its business. Key concepts underlying the business are standard physical layer connection and open access – which also drive the thinking at Allied Fiber. The genesis of Allied Fiber came from two pivotal encounters that Newby

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experienced while working for Telx. The first encounter was in 2004, when Telx bought the 56 Marietta Street building in Atlanta, which serves as a traffic exchange point, with the goal of setting up a neutral interconnection platform there. The building’s previous owners “had no idea what they had bought,” Newby recalls. “They bought the building to convert it to loft condos, and they were upset they couldn’t throw the carriers out.” Newby went to Atlanta to explain Telx’s interconnection philosophy to the carriers that were connected at the facility. One of his meetings was with a potential client, Norfolk Southern Corporation. The company, a railroad, had rights of way behind the building and had already installed clear innerduct spanning thousands of miles in the eastern United States. The ductwork had been installed during the digital boom period, and the railroad had tried, without success, to get the previous owners of 56 Marietta Street to allow it into the building. Telx had no objection. As soon as the ducts were brought in, two network operators used them to install fiber. “It really strengthened the building,” Newby says. Newby also recognized that at some future point, the Norfolk Southern ductwork could be a valuable platform for a new fiber network build. He was confident he would know when the time was right. The period between 2004 and 2007 was one of consolidation in the longhaul market, with lots of fiber network bargains to be found. By 2007, Newby realized that conditions had changed when Telx got an inquiry from a major international carrier asking for assistance in finding dark fiber to connect subsea landing points. “Either the fiber didn’t exist, or the carriers wouldn’t sell it,” Newby says.

Also around this time, Telx was sold to a new investment group, and Telx CEO Rory Cutaia left to join private equity firm Corinthian Capital, urging Newby to look at deals with him. Newby told him, “Instead of looking for deals, I have a deal.” The upshot was that Newby cut a deal with the railroad to use its ductwork and rights of way nationwide and was able to obtain construction completion financing from principals of Corinthian and from other individuals who had been involved with Telx in its early days. In addition, Newby secured a commitment for senior debt from Falcon Investment Advisors and ABRY Partners. Phasing in the Network As of mid-March, Allied Fiber had 10 carriers signed up to use Phase 1 dark fiber, with dozens more contracts still being finalized. Signing the deals were traditional interexchange carriers, competitive carriers and cable multiple systems operators, says Newby, who also expects to see companies using Allied Fiber’s dark fiber for mobile backhaul. The company already has customers lined up for Phase 2, which will extend the network to Miami, and for Phase 3, which will take it to Seattle, Newby says. The final two phases will extend the network from Seattle to southern California and then from southern California back to Miami. Phases 2 through 5 will be a bit more challenging than Phase 1 from a construction point of view, however, because ductwork has not been installed along those routes. data center opportunities Ductwork and rights of way aren’t the only benefits that Allied Fiber gets from working with the railroad. There’s something else, too – and it relates to the railroad’s heritage of serving the heavy industrial and manufacturing locations that flourished during a different era. The network runs through areas that have great access to major sources of power at some of the best prices available anywhere – as low as 3 cents per kilowatt hour, according to Newby. That access to power captured the attention of Pod Global, a company that

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

Fiber Deployment Strategies is planning to install containerized data center parks at several locations along the Allied Fiber route, where it has not only found great pricing on power but also plenty of capacity. “Every location will support 100 megawatts, and we’ll have 100 containers or more at each location,” says Pod Global CEO Lee Hansen. The container shell, he says, is the same type of ISO9001 shipping container used on railroad cars and tractor trailers. Pod Global has not yet revealed the specific markets where its containerized data centers will be located, but Hansen said an initial location is likely to be in Indiana. The company is seeing strong interest from major users of data centers that are running out of either space or power at existing facilities. The excellent connectivity via the Allied Fiber network to major traffic exchange points makes a containerized approach viable and economical in some of the markets along the route, Hansen says. He believes most customers will manage their equipment remotely, drawing on local Pod Global staff when needed. Because power accounts for such a large part of the cost of data center service, data center operators tend to charge clients for monthly service, including floor or rack space, based on peak power consumption, explains Hansen. Pod Global expects to charge about $150 per kilowatt per month, which is a far cry from the $700 per kilowatt per month commanded by some major data center operators. “When we tell people $150 a kilowatt and you can do your own dark fiber, almost everyone’s eyes widen,” says Hansen. Hansen expects to find local business clients for his centers as well. His enthusiasm for the potential long-term economic impact of the Allied Fiber network matches Newby’s – as long as data centers are part of the equation. “Fiber is of epic importance, but if there is no data center space, there’s nothing,” comments Hansen. Many small communities have been “swept under the rug” because of technology changes, he says. But with high-speed connectivity and data cen-

Allied Fiber’s mix of long-haul and short-haul fiber lets carriers tap into the network every 60 miles.

ters more widely available, he predicts, “there will be an uptake of utilization from localized regions, which will play a role in the economic development of the regions.” Hansen even goes as far as predicting “an increase in property values and an influx of population” to smaller markets reached by Allied Fiber or similar networks. Many people, he says, don’t want to live in metro regions, but they are forced to do so today. Investors Are Attracted Not everyone is sold on the idea of using data centers so remote from traditional interconnection points. In certain circumstances, they say, latency could be an issue. For example, MacNeil doesn’t expect XO to be a heavy user of data centers along the Allied Fiber route. He says that although XO might put some equipment in those centers to serve tenants in the centers, it will continue to rely primarily on data centers in major metro markets. Nevertheless, even skeptics may have to admit that a containerized data center approach could be well-suited to markets along the Allied Fiber route because of the difficulty of predicting demand in some of these markets. “The chances of accurately predicting your IT requirements are very low and, considering the costs of data center construction, the risk is very high,” comments Waite Ave, managing partner

for Universal Networking Services, a company that sells and installs containerized data centers and has had inquiries from financial firms that are considering establishing centers along the Allied Fiber route. “If a customer needs to grow, we simply deploy another modular container,” says Ave, adding that containerized data centers are well-suited for disaster recovery use. According to Newby, neither demand uncertainty nor other concerns have deterred some traditional data center operators from making plans to locate along the Allied Fiber route. “I know of at least three data center projects on the Phase 1 route,” comments Newby. One of them, which he says is “the biggest data center I’ve ever seen,” is “on the east coast, directly on the route.” Clearly, Allied Fiber is attracting significant investment and interest at a time when any type of infrastructure spending seems to be scrutinized more closely than ever. Newby says he has also received inquiries from governments of other countries asking him to help them adopt a similar approach as a means of driving broadband deployment in their countries. Some of those who buy into the Allied Fiber vision, including Hansen, are just as evangelical as Newby is about it. “Hunter [Newby] will change the face of the United States and the global economy because we’ll be able to jump back in with both feet – all of us, not just some of us,” says Hansen. BBP

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Whether it’s a heart-wrenching email from a Moroccan prince or signs at intersections promising thousands per month for selling items on eBay, get rich quick schemes usually send up red flags for most of us. We have been taught since an early age that if it seems too good to be true, it probably is. Ninety-nine percent of the time this is a helpful instinct that keeps us from losing our identities, savings and time from predators who seek to prey on the naive. However, what about the one percent of time that it could keep us from missing a viable opportunity to generate legitimate additional income? By attempting to avoid scams and wasted time, are we, as owners, occasionally missing out on ways to enhance our bottom line?

One area where many owners miss out on potential opportunities is internet and television service. Just as soda companies pay arenas a fee to sell drinks and advertise to its patrons, so should telecommunications companies pay for the same access to sell and advertise to your residents. You are providing a huge set of potential customers, so you should be proportionally compensated for your part in their sales process. However, not all telecommunications companies and/or arrangements are created equally. Here are a few important steps to go through prior to making any binding decisions or signing any contracts.

Payment Structures The two most common types of ancillary income are door fees and revenue sharing agreements. While it can be tempting to sign the first good deal that comes along, take the time to negotiate and look at every provider in your area. While one company may initially offer a relatively low revenue share, they may be willing to go higher if they feel as though they may lose your business to a competitor. However, don’t settle for the first big figure that you hear. Revenue shares are based on the percentage of occupied units as well as the number of occupants who choose to subscribe to the service. While a good provider will attract new subscribers, it won’t make a drastic change. For example, if only 40 percent of your residents have Internet service, and the model you’re looking at is dependent on an 80 percent subscription rate, you’ll probably have to readjust your expectations. A great provider may moderately increase subscription rates, but don’t expect them to double. A factor that does profoundly affect subscription rates is the number of providers on the property. As Carl E. Kandutsch, a former FCC lawyer, recently explained in Broadband Properties Magazine, “Say for instance, in exchange for the grant of exclusive marketing rights and/or the exclusive use of inside wiring, the cable company pays the owner a door fee of $150 per unit, as well as a share of its monthly revenue, in amounts based on those typically found in cable right-of-entry agreements. The up-front door fee payment of $52,500, amortized at 6 percent, amounts to about $767 per month, or $9,200 per year, over the seven-year term. This looks pretty good until we consider how much potential rent is lost because prospective tenants are stuck with no choice among service providers. Remember our assumption that the average monthly rental income from one resident is $800, or $9,600 yearly.”

Only allowing one provider usually increases revenue for the short term, it may cause people to leave your community at the end of their lease. It usually doesn’t take the loss of more than a couple of units to quickly outweigh the additional revenue. There are ways around this problem. Some companies act as service provider managers and can negotiate revenue sharing options with multiple service providers. They work with them to get the best deal for you, and you only have to work with one company, eliminating a lot of frustration and confusion. By working with these kinds of companies, you can have the best of both worlds of maximizing revenue and offering choice. Choice isn’t the only factor in keeping residents happy. Quality of service and support are key to ensuring residents don’t feel trapped by their providers. The best way to check on this is to talk to other owners about their experiences with customer support. If your doubts linger, ask for the customer service line, call, and see how fast and courteous the response is. If you wouldn’t want to talk to the person on the other end of the line, don’t ask your residents to do the same. Ultimately, the key to finding the right services that enhance your bottom line and the happiness of your residents is due diligence. Take the time to find out what your residents like, what they want in their services, listen and find a provider who can deliver. There are companies who offer both quality service and competitive ancillary income options, if you take the time to do your research.

www.cnxntech.com cnxntech

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Connexion Technologies

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919.535.7329

Connexion Technologies

hot products

Broadband Properties th Annual List Of Leading Broadband Technologies and Services

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The latest offerings from top broadband hardware and software suppliers, distributors and service providers.

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Hospitality 3

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Active Electronics - Wireless Video Headends and Related Equipment Passives - Outside Plant

Products and Services Active Electronics - Wireline

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DISH Network

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Display Systems International

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G4S Technology (formerly Adesta)

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Mac Gray

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Multicom Inc.

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Spot On Networks

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Sumitomo Electric Lightwave

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Time Warner Cable

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Verizon Enhanced Communities

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Active Electronics - Wireless Video Headends and Related Equipment Passives - Outside Plant

Products and Services Active Electronics - Wireline

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3M Communication Markets Division 6801 Riverplace Blvd. Austin, TX 78726 P: 512-984-4641 Contact: Linnea Wilkes E: [email protected] W: www.3m.com/onepass

Segments of Industry Served: MDU/PCO; Telcos; Hospitality; Municipalities Products and Services: Passives – Outside Plant; Passives – Inside Plant; Customer-Premises Equipment; Structured Wiring

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In 2009, 3M unveiled the revolutionary 3M One Pass Fiber Pathway to enable fast, low-cost installation of FTTP networks in brownfield multipledwelling units. Now, 3M introduces the newest addition to its One Pass family of products, the 3M One Pass Mini Fiber Pathway. The One Pass Mini is a low-profile, single-fiber cable pathway solution designed to take fiber beyond the hallway, deep into a living unit discreetly and with minimal subscriber disruption. And like its

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

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hot products older brother, the One Pass Mini Fiber Pathway utilizes exclusive 3M adhesive technology, which ensures reliable installation on a wide variety of surfaces, even painted or sealed concrete. Together, the 3M One Pass Fiber Pathway and the new 3M One Pass Mini Fiber Pathway, both terminated with the highperformance 3M No Polish Connector, provide a complete, cost-effective and aesthetically pleasing fiber solution for MDUs, both inside and outside the living unit ... the Total Package.

ADTRAN

901 Explorer Blvd. Huntsville, AL 35806 P: 256-963-8000 F: 256-963-7916 Contact: Kim Brashears E: [email protected] W: www.adtran.com Segments of Industry Served: MDU/PCO; Telcos; Cable TV; Hospitality; Municipalities Products and Services: Active Electronics – Wireline; Active Electronics – Wireless; Customer-Premises Equipment The ADTRAN Total Access 5000 MSAP is a carrier-class multiservice access and aggregation platform that bridges the gap between existing and next-generation networks. With a pure Ethernet core, the Total Access 5000 supports both legacy and emerging service interfaces over both copper and fiber, easily scaling to support even the most bandwidth-intensive applications. The innovative product was recently cited for adding Packet Optical Transport Switching (P-OTS) to its list of applications for access networks. Total Access 5000 is built around a pure Ethernet core. All incoming services, regardless of protocol, are handled as Ethernet, creating a native service delivery model for advanced services without stranding existing legacy services. This allows the Total Access 5000 to economically address multiple network applications with traditional network interfaces. It also addresses advanced capabilities such as Ethernet Ring Protection Switching, VDSL2, 10 GigE, GPON, active Ethernet, WDM and OTN.

Advanced Media Technologies 3150 SW 15th Street Deerfield Beach, FL 33442 P: 954-427-5711 F: 954-427-9688 Contact: Rob Narzisi E: [email protected] W: www.amt.com

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Segments of Industry Served: MDU/PCO; Telcos; Cable TV; Hospitality; Municipalities Products and Services: Active Electronics – Wireline; Video Headends and Related Equipment; Passives – Outside Plant; Passives – Inside Plant; Customer-Premises Equipment; Test Equipment Economically disruptive LAN solution that will revolutionize the way voice, video and data are distributed throughout enterprises. POL replaces existing LAN connections with a single high-capacity fiber optical cable designed to connect end users directly to the data center. Derived from carrier-grade passive optical networking (PON) technology, POL allows end users to realize substantial capex and opex savings while taking significant steps toward becoming more green.

AFL

PO Box 3127 Spartanburg, SC 29304 P: 864-433-0333 F: 864-433-5363 Contact: Tony Nieves E: [email protected] W: www.aflglobal.com Segments of Industry Served: MDU/PCO; Telcos; Cable TV; Hospitality; Municipalities Products and Services: Video Headends and Related Equipment; Passives – Outside Plant; Passives – Inside Plant; Customer-Premises Equipment; Structured Wiring; Test Equipment; Planning, Design or Construction; Training IDEAA – Integrated Distribution Enabling Access Apparatus: The IDEAA product family revolutionizes the way passive optical splitter modules are deployed in the outside-plant network. An alternative to traditional splitter-modulein-cabinet designs, IDEAA allows service providers to provision PON splitter module needs with less upfront cost by using a common footprint module. Additionally, the IDEAA product family allows quick and easy termination of distribution fibers using the latest AFL FuseConnect technology. Because it uses a small modular design, the IDEAA product can be installed in many different applications. This allows

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

hot products service providers to manage a single type of splitter module to service and upgrade all their PON applications. Applications include direct wall mount, interior wall mount enclosure or pedestal, exterior wall mount enclosure, exterior distribution enclosure or pedestal, exterior distribution cabinet, sealed splice closure and rack mount bracket.

AT&T Connected Communities 2180 Lake Blvd. Atlanta, GA 30319 P: 404-829-8895 F: 404-829-8818 Contact: Thuy Woodall E: [email protected] W: www.att.com/communities

Segments of Industry Served: MDU/PCO Products and Services: Internet and Video Services/ Programming AT&T Connected Communities is a specialized division of AT&T dedicated to creating alliances with apartment ownership and management groups, single-family builders, developers and real estate investment trusts within our 22-state service area. As a leading global provider of high-speed Internet, advanced TV, home phone service and wireless communication services, our mission is to develop reliable technology solutions that bring AT&T’s complete offering of the latest communications and entertainment services to your community and residents. Aligning with AT&T Connected Communities, which is backed by a single point of contact, ensures a rewarding marketing partnership and seamless technology deployment while increasing the value of your community. To learn more, visit www.att.com/communities.

haul from a remote location. The DVIS can MPEG-2 encode up to 10 programs, demodulate an incoming QAM, create a new multiplex of encoded content and demodulated content and then transmit it via QAM or IP (RJ45/SFP). The DVISm (Mini) is scalable from 1 to 4 programs. These MDU hardened designs include integrated RF management and an industryleading digital channel deletion filter. They can be configured for any digital insertion method, including add, add/drop or drop on an existing QAM, QAM deletion and reinsertion or QAM insertion at the band edge. An IP-based management port with onboard Web server and SNMP support allows users to configure and monitor the DVIS/DVISm remotely. The gldsad-qrtrpageFINAL.pdf 10:39:16 AM DVISn (Nano) is scalable from 16/18/09 to 2 programs and is geared

ATX Networks

1-501 Clements Rd. W. Ajax, ON, L1S7H4 Canada P: 800-565-7488 F: 866-427-1964 Contact: Tim Buck E: [email protected] W: www.atxnetworks.com

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Segments of Industry Served: MDU/PCO; Telcos; Cable TV; Hospitality; Municipalities Products and Services: Active Electronics – Wireline; Video Headends and Related Equipment; Passives – Outside Plant; Passives – Inside Plant; Customer-Premises Equipment; Test Equipment

CMY

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The DVIS line from ATX Networks is designed for MDU digital insertion or for applications that require content back-

WWW.GLDS.COM

800-882-7950

[email protected]

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

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hot products toward applications requiring a basic and cost-effective QAM insertion into an empty EIA channel or at the band edge. http://www.atxnetworks.com/digital-video-insertion ATX Networks has expanded its UCrypt product offering, which is designed to support operators with the delivery of content into hospitality and bulk MDU accounts, so that virtually any deployment architecture and distribution application can be addressed. The UCrypt QAM-to-QAM product was designed to transition content from HFC plant and retransmit into an MDU/hotel in Pro:Idiom/clear QAM format. Expanding upon the success of that product, ATX has now included both IP and analog output capabilities in the UCrypt so that operators can service IPTV-based hospitality accounts and address accounts where supplying every dwelling with a set-top box is not practical. ATX has also developed IP to Pro:Idiom QAM, IP to Pro:Idiom IP, QAM to IP and QAM to analog as a part of the UCrypt product suite to provide operators with the ability to deploy Pro:Idiom encrypted content in a more centralized manner. http://www.atxnetworks.com/bulk-qamto-qam-gige-analog-mdu

Blonder Tongue Laboratories Inc. One Jake Brown Road Old Bridge, NJ 08857 P: 800-523-6049 F: 732-679-1886 Contact: Lauren Yesler E: [email protected] W: www.blondertongue.com

Segments of Industry Served: MDU/PCO; Cable TV; Hospitality; Municipalities Products and Services: Video Headends and Related Equipment; Training MUX-12A-IP (Multiplexer; 12:1 ASI-to-IP) is designed to utilize a common hardware platform for two similar but separate applications. The IPTV mode is ideal for cherry-picking applications and to allow operators to create custom-made channel lineups by grooming SD and HD programs on an asneeded basis. The RF QAM mode is suitable for distribution over coaxial networks, and each input ASI stream can contain up to three programs – typical for digital off-air broadcasting applications. The multiplexer is Emergency Alert System (EAS) compliant in both modes – the operator can assign ASI port #12 as an EAS input which, when activated, will override the content of all other ASI inputs. Comprehensive remote monitoring and control is accomplished via a GUI-based interface using any standard Web browser. Please come to Booth #206 at the 2011 BBP Summit

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or visit www.blondertongue.com for more information on our Edge/IP Solutions.

Calix

1035 N. McDowell Blvd. Petaluma, CA 94954 P: 707-766-3000 F: 707-766-3100 Contact: David Russell E: [email protected] W: www.calix.com Segments of Industry Served: MDU/PCO; Telcos; Cable TV; Hospitality; Municipalities Products and Services: Active Electronics – Wireline; Passives – Outside Plant The 716GE-I is the first indoor ONT in the industry that supports both GPON and active Ethernet in the same home unit. The 716GE-I is designed to address a wider range of indoor settings. Its modern, consumer product–inspired design enables it to be located in public settings, such as desktops and visible wall locations, but its wider temperature specifications allow it to be used in garage and laundry-room settings. The 716GE-I offers two POTS and four GE ports and all the most valued features of Calix 700GE ONTs: • Support for both GPON and active Ethernet (AE) through the unique Calix auto-detect technology • Full symmetrical, line-rate GE • Every port separately provisioned • Support for multiple services (VLANs) over each GE port • Remote ONT activation (RONTA) via a voice response system • Voice services – both TDM and VoIP (SIP and H.248, MGCP in the near future)

Channell Corp

PO Box 2099 Temecula, CA 92589 P: 951-719-2600 Contact: Jill Orr E: [email protected] W: www.channell.com Segments of Industry Served: MDU/PCO; Cable TV; Municipalities Products and Services: Passives – Outside Plant

Telcos;

Channell is into FTTH fiber, pits and enclosures: Channell’s newest generation of FTTH fiber optic cable splicing, storage and management systems features field-upgradable splice tray enclosures and options. The superior strength of our Signature

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

hot products Grade Level Boxes (SGLB) is combined with our Multiple Access Housing (MAH) pedestal for easy, 360-degree access to our splice tray enclosure products. The thermoplastic MAH pedestal provides protection from extreme elements, and its patented universal bracketry design just snaps in and out of the SGLB base for quick access and hassle-free maintenance challenges.

Charles Industries

5600 Apollo Drive Rolling Meadows, IL 60008 P: 847-806-6300 F: 847-806-6231 Contact: Brad Wackerlin E: [email protected] W: www.charlesindustries.com Segments of Industry Served: MCU/PCO, Telcos; Cable TV; Municipalities Products and Services: Passives – Outside Plant; Passives – Inside Plant Charles CUBE RL Series Cabinets: Compact and compartmentalized, Charles CUBE RL Series remote cabinets are ideal for backhaul and other remote electronics equipment deployments at cell sites, MDUs, business parks and other multiuser locations. Separate locking compartments for service provider equipment, customer equipment and powering are available to allow service providers the ability to restrict customer and technician access to individual compartments. RL Series cabinets are designed to support traditional 19” or 23” rackmount equipment and may be mounted on walls, H-frame channels or poles. They are made in the United States, certified to Telcordia GR-487 specifications and available with several options, including heat exchangers, copper and fiber cable management, solar shields and AC or DC powering. AC panels that include circuit breakers, surge suppression and GFCI receptacles are also available.

Clearfield Inc.

5480 Nathan Ln. Plymouth, MN 55442 P: 763-476-6866 F: 763-475-8457 Contact: Lindsay Golz

E: [email protected] W: www.clearfieldconnection.com Segments of Industry Served: MDU/PCO; Telcos; Cable TV; Municipalities Products and Services: Passives – Outside Plant; Passives – Inside Plant Delivering small fiber counts to the access network just got a whole lot easier!  The FieldSmart Small Count Delivery (SCD) Case from Clearfield delivers any type of fiber construction or optical component to any point in the access network. It is optimized for above- or below-grade deployment in Clearfield’s new CraftSmart Optical Protection (OP) pedestal or vault and combines the low-cost fiber management features of Clearview xPAK with an innovative sealed enclosure. Leading the industry in modularity, the FieldSmart SCD Case can also be deployed directly out of the box with aerial or pole mounting hardware.

Comcast Cable

1701 JFK Blvd. Philadelphia, PA 19103 P: 800-COMCAST Contact: Bill Revell E: [email protected] W: www.comcast.com Segments of Industry Served: MDU/PCO Products and Services: Internet and Video Services/ Programming Comcast Corporation is one of the nation’s leading providers of entertainment, information and communications products and services. We value our partnerships with multifamily communities as we help them deliver the best in entertainment to their residents. All Comcast services bring valuable benefits to each customer’s home, including XFINITY TV, XFINITY Internet and XFINITY Voice. We hold our products, service and people to the highest standards because our goal is to provide a superior customer experience. Serving residents in 36 states and the District of Columbia, Comcast will partner with you to meet all your residents’ communications needs.

Connexion Technologies

111 Corning Road, Ste. 250 Cary, NC 27518 P: 919-535-7342 F: 919-882-9338 Contact: Susan Knowles, Media Relations Coordinator E: [email protected] W: www.cnxntech.com Segments of Industry Served: MDU/PCO

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

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hot products Products and Services: Other Planning, Design or Construction

Managed

Services;

Connexion Technologies customizes and manages advanced communications networks in residential properties nationwide. Its networks optimize the communication experience and value of properties for residents and owners. Connexion Technologies is not a service provider; rather, it selects and manages providers that offer entertainment and communication applications, including enhanced television, telephone and Internet services over Connexion’s providerneutral networks. The company is based in Cary, N.C. It was established in 2002 and serves properties nationwide. For more information, visit us at www.connexiontechnologies.net

Corning Cable Systems

800 17th Street NW Hickory, NC 28603 P: 828-901-5000 F: 828-901-5488 Contact: Dave Kiel E: [email protected] W: www.corning.com/cablesystems Segments of Industry Served: MDU/PCO; Telcos; Cable TV; Municipalities Products and Services: Passives – Outside Plant; Passives – Inside Plant; Test Equipment; Planning, Design or Construction; Training Corning Cable Systems, a global innovator and industry leader in optical networking, offers a complete solution optimized for FTTx networks. Through its Evolant Solutions, Corning Cable Systems provides a range of innovative products, including optical cable, hardware and equipment products designed to make FTTx deployments faster, easier, more reliable and less costly. The Corning Connected Community Program assists homebuilders and community developers with implementing fiber optic infrastructures into their building plans, while the Corning Total Access Program provides highly qualified design, engineer, furnish and install companies with the tools necessary to ensure successful fiber-to-the-home and wireless deployments. FTTx consultants and network designers have access to a diverse range of tools and resources through the Corning FTTxpert Program.

COS Systems

16 Coddington Wharf #2 Newport, RI 02840 P: 617-274-8171 Contact: Ronald Corriveau, VP Business Development

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E: [email protected] W: www.cossystems.com Segments of Industry Served: MDU/PCO; Telcos; Cable TV; Hospitality; Municipalities Products and Services: Back-Office Software; Customer-Facing Applications COS is an operations, administration and management solution that offers secure, automated provisioning and monitoring for broadband networks. It provides a comprehensive solution for automating the operational and business processes critical to selling, provisioning and managing broadband networks. COS offers a secure, highly customizable self-service portal that lets customers select offerings such as triple play from multiple service providers. COS automatically provisions services offered to subscribers from the COS portal, sends customer and billing information to the relevant service provider and enables the services, all in a matter of minutes. By automating all the activities needed to provision and manage subscribers, COS improves customer satisfaction, lowers service deployment costs and accelerates revenues. For more information, visit us at www.cossystems.com

DISH Network

9601 S. Meridian Blvd. Englewood, CO 80112 P: 720-514-5811 Contact: Troy Barclay E: [email protected] W: www.commercial.dishnetwork.com Segments of Industry Served: MDU/PCO; Telcos; Hospitality Products and Services: Video Headends and Related Equipment; Internet and Video Services/Programming; Planning, Design or Construction DISH Network offers best-in-class programming at a competitive  rate for multitenant buildings,  student housing, singlefamily neighborhoods, hospitals and assisted-living properties. Services range from bulk programming delivered to an entire complex to customized digital, video and  Internet solutions. DISH is the smart choice for business, providing the best in high-definition, international, movie and sports programming plus local channels in every market. Our technology is available across all 50 states, Puerto Rico and the USVI. No matter what the infrastructure, DISH has a solution to maximize a property’s appeal and help sell units faster. Scalable solutions combined with technical innovation go beyond the specific requirements of property owners and management

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

hot products companies to provide unique, value-added product to service any property’s needs. www.Commercial.Dishnetwork.com

Display Systems International 2214 Hanselman Ave. Saskatoon, SK S7L6A4 P: 306-934-6884 F: 306-934-6447 Contact: Whitney Lemke E: [email protected] W: www.displaysystemsintl.com

Segments of Industry Served: MDU/PCO; Telcos; Cable TV; Hospitality; Municipalities Products and Services: Video Headends and Related Equipment Display Systems International’s Video Information Player (VIP) is a powerful, easy-to-use video display administration system. The machine’s intuitive, Webbased control system gives you the ability to control multiple units in remote locations using a single login. The VIP can handle almost any video file format, and the machine’s online interface ensures cross-platform compatibility. The VIP is capable of meeting your needs regardless of the scale of your operation, and is useful for everything from controlling a single electronic bulletin board to running a fullfledged community information channel. DSI has more than 25 years of experience in the broadcast industry and specializes in providing a diverse array of services that include scrolling channel guides, TV listings data and digital signage solutions. The company has recently added “Best Customer Service” to the long list of awards received and has recently expanded its operations, not only in space but staff as well.

results-oriented services in SONET, IP/Ethernet, DWDM/ CWDM, wireless, last-mile and broadband networks. Since 1988, G4S Technology has deployed more than 2 million fiber miles. We can help develop a greenfield network or integrate into an existing infrastructure. We work with both inside- and outside-plant facilities and provide all types of networks for voice, data and video applications. Our wide range of services includes design, engineering, cable and equipment procurement, aerial and underground installation, construction, system testing and turn-up, fusion splicing and documentation. G4S Technology is a founding member of the Fiber-to-theHome Council and specializes in last-mile and broadband solutions for ILECs, CLECs, utilities, municipalities, economic development projects and rural broadband cooperatives.

Mac-Gray 404 Wyman St., Ste. 400 Waltham, MA 02451 P: 888-MAC-GRAY F: 781-290-4890 Contact: Don Baumann E: [email protected] W: www.macgray.com Segments of Industry Served: MDU/PCO

TEAM FENEX announces an addition to the family! The proven line of Fiber Optic Splicing Labs now has a new addition – a Baby Brother! The CUB, expands the quality FOSL family to four sizes of trailers. Maintaining the features and construction of its bigger brothers, the CUB provides greater maneuverability in an eco-friendly manner. Shorter turning radius, lighter overall weight, and shorter overall length are just a sample of the features achieved by this single axle design. The new TEAM FENEX 6’ X 8’ CUB is ready for work!

G4S Technology (formerly Adesta) 1200 Handmark Center, Ste. #1300 Omaha, NE 68102 P: 402-233-7700 F: 402-233-7650 Contact: Laura Kocher E: [email protected] W: www.g4stechnology.com

Segments of Industry Served: MDU/PCO; Telcos Products and Services: Planning, Design or Construction G4S Technology (formerly Adesta) specializes in the design and implementation of modern communications networks and infrastructure for public and private customers. A trusted provider of facilities, equipment and personnel for a wide variety of communications infrastructure, we offer custom-tailored,

For information call

TEAM FENEX SALES @ 1-800-88FENEX

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

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hot products Products and Services: Other Managed Services Mac-Gray is the premier multifamily provider of energy-efficient commercial laundry equipment, award-winning local support and cutting-edge services and technologies. Our specialized programs and superior equipment options are proven to increase revenues and resident satisfaction while reducing utility costs. Mac-Gray is proud to introduce Change Point – a revolutionary, Internet-based laundry payment and monitoring system, incorporating patented technology and proprietary features to ensure 100-percent revenue accountability, increased resident satisfaction and more. By connecting washers and dryers to the Internet, Change Point gives residents the ability to pay for each cycle with a debit card, credit card or coin, eliminating the chore of finding the correct number of quarters and the need to keep track of or replenish a laundry card. Change Point also utilizes Mac-Gray’s proprietary LaundryView monitoring system, offering robust service and revenue-tracking capabilities for property owners. To learn more about Change Point, please visit www.mac gray.com/changepoint.

Multicom Inc.

1076 Florida Central Parkway Longwood, FL 32750 P: 407-337-7779 F: 407-339-0204 Contact: Scott Brietz E: [email protected] W: www.multicominc.com

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Segments of Industry Served: MDU/PCO; Telcos; Cable TV; Hospitality Products and Services: Active Electronics – Wireline; Video Headends and Related Equipment; Passives – Outside Plant; Passives – Inside Plant; Customer-Premises Equipment; Structured Wiring; Test Equipment; Internet and Video Services/Programming; Other Managed Services; Planning, Design or Construction; Training Multicom is proud to announce a complete FTTH RFoG solution that includes Multicom’s 1550 transmitter, high-power EDFA, optical splitters, nano node and high-sensitivity return path receiver. Designed to scale to a wide variety of applications from greenfield to HFC upgrades to GPON migration, this solution enables Multicom to provide all required active and passive components for complete, end-to-end FTTH solutions. Multicom’s RFoG products integrate with existing headends, CMTS and set-top boxes, resulting in a seamless, cost-

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effective deployment. Multicom’s sales engineers have FTTH Professional Certification and proven track records for providing the product and service solutions you need. Stocking 13,000 products from more than 270 of the world’s major manufacturers, we provide answers to today’s most challenging issues and the products to implement even the most sophisticated projects. Headquartered in Orlando, Fla., since 1982, Multicom is a full-line stocking distributor and manufacturer of products used for end-to-end integration of voice, data, and video over fiber, coax and copper at cost-effective prices. Call Multicom at 800-423-2594, email [email protected] or visit www.multicominc.com

OFS

2000 N.E. Expressway, Ste. B030 Norcross, GA 30071 $)XUXNDZD&RPSDQ\ P: 888-Fiber-Help  888-342-3743 from inside the U.S.A. 770-798-5555 from outside the U.S.A. For questions about Specialty Photonics Division Products and Services: 860-678-0371 F: 770-798-3872 E: [email protected] W: www.ofsoptics.com Segments of Industry Served: MDU/PCO; Telcos; Cable TV; Municipalities Products and Services: Passives – Outside Plant; Passives – Inside Plant; Test Equipment; Planning, Design or Construction OFS is a world-leading designer, manufacturer and provider of optical fiber, optical fiber cable, FTTx, optical connectivity and specialty photonics products. Our manufacturing and research divisions work together to provide innovative products and solutions that traverse many different applications as they link people and machines worldwide. Between continents, between cities, around neighborhoods and into homes and businesses of digital consumers we provide the right optical fiber, optical cable and components for efficient, cost-effective transmission. OFS’ corporate lineage dates back to 1876 and included technology powerhouses such as AT&T and Lucent Technologies. Today, OFS is owned by Furukawa Electric, a multibillion-dollar global leader in optical communications.

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

hot products Headquartered in Norcross (near Atlanta), Ga., OFS is a global provider with facilities in Avon, Ct.; Carrollton, Ga.; Somerset, N.J.; and Sturbridge, Mass., as well as in Denmark, Germany and Russia.

Radiant Communications 5001 Hadley Rd. South Plainfield, NJ 07080 P: 908-757-7444 F: 908-757-8666 Contact: Tom Lewis E: [email protected] W: www.rccfiber.com

Segments of Industry Served: MDU/PCO; Hospitality; Municipalities Products and Services: Video Headends and Related Equipment; Customer-Premises Equipment

Easily insert local content including security camera feeds, locally created video content, character generators and more with Radiant’s local digital insertion products. They come in rackmountable and wall-mountable versions or in compact cassette packages the size of cable modems. Easily configurable with a front panel or our simple-to-use GUI. Features drop/add capabilities that give property owners control of their channel lineups.

Spot On Networks

55 Church Street New Haven, CT 06510 P: 877-768-6687 F: 203-773-1947 Contact: Jessica DaSilva E: [email protected] W: http://www.spotonnetworks.com Segments of Industry Served: MDU/PCO; Hospitality Products and Services: Internet and Video Services/ Programming; Other Managed Services Spot On Networks offers communitywide Wi-Fi networks for the multifamily industry. Residents can use their laptops, smartphones, tablets, gaming devices and more throughout the entire community – in their apartments, at the pool, in the clubhouse and more! Spot On’s networks are fully managed and CALEA-compliant and offer unlimited data for smartphones and tablets. Spot On has deployed networks at more than 400 properties covering more than 70,000 residential units in 26 states. Spot On deploys 802.11 b/g/n networks. In addition to providing

communitywide Internet access, a Spot On Wi-Fi network can act as a backbone for energy management, water management and utility cost-saving devices. High-speed Wi-Fi Internet has been ranked as the number one amenity for apartment residents. Call now to find out more about the benefits of deploying a managed Wi-Fi network throughout your community: 877-768-6687 www. spotonnetworks.com

Sumitomo Electric Lightwave

PO Box 13445 78 T.W. Alexander Dr. Research Triangle Park, NC 27709 P: 800-358-7378 Contact: Customer Service E: [email protected] W: www.sumitomoelectric.com Segments of Industry Served: MDU/PCO; Telcos; Cable TV; Hospitality; Municipalities Products and Services: Passives – Outside Plant; Passives – Inside Plant; Customer-Premises Equipment; Structured Wiring; Planning, Design or Construction The Lynx2-MPO, offered for ribbon and round-cord, loosetube and patch-cord terminations (pictured top right), brings breakthrough technology to customized on-site connectivity for virtually any network termination project. Yielding better performance than other termination methods, the Lynx2MPO allows technicians to terminate typically in less than three minutes for ribbon and less than five for loose tube. Build cable to the exact length on site and make quick repairs and restorations without pre-engineering, logistical delays, or the risk of shorts and slack that preterminated cables and pigtails entail. Also offered are SC, ST, LC, and FC connectors. Sumitomo Electric Lightwave offers solutions that include the industry’s highest-quality and most reliable optical fiber cable, fusion splicers and accessories, optical network products

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

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hot products and FutureFLEX air-blown network solutions. Visit www. sumitomoelectric.com, www.futureflex.com and http://www. youtube.com/user/SumitomoRTP. Call today and ask for customer service at 800-358-7378. Visit us at the Broadband Properties Summit, Booth# 513.

Suttle

1001 E. Hwy 212 Hector, MN 55342 P: 800-852-8662 F: 320-848-6218 E: [email protected] W: www.suttleonline.com Segments of Industry Served: MCU/PCO; Telcos Products and Services: Passives – Outside Plant; Passives – Inside Plant; Customer-Service Equipment; Structured Wiring Suttle HomePNA Coax Gigabit Ethernet Adapter (CES2CUA): Suttle’s HPNA Gigabit Coax Ethernet Adapter (CES-2CUA) enables setup of a home network using existing coaxial cable with no additional wiring or setup. Simply connect the home’s gateway device to an adapter and plug it into any coax connector to feed IP video and high-speed data to any coax port on the network. The adapter includes intelligence to support various services, including VLAN tagging, queuing schemes and bandwidth control.

Televes USA LLC

9800 Mount Pyramid Ct., Ste. 400 Englewood, CO 80112 P: 303-256-6767 F: 303-256-6769 Contact: Javier Ruano E: [email protected] W: www.televes.com Segments of Industry Served: MDU/PCO; Cable TV; Hospitality Products and Services: Active Electronics – Wireline; Video Headends and Related Equipment; Passives – Outside Plant; Passives – Inside Plant; Customer-Premises Equipment; Test Equipment H45 Advance Series – Advanced HDTV System Analyzers: The H45 Advance series are new-generation, real-time digital processing test solutions designed for digital and analog cable, satellite and off-air HDTV signal analysis.  KEY FEATURES: • Real-time digital processing

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• • • • •

MPEG-4, full-HD TV signal display and measurements Optical interface with built-in optical receiver Professional-grade spectrum analyzer (2 MHz to 3.3 GHz) Workflow automation Portability and ease of use

HDTV TESTING MADE SIMPLE – One single tool covers every testing need: • • • •

CATV – QAM Annex A/B/C · NTSC SATELLITE – DVB-S · 8PSK · DSS · DVB-S2 OFF-AIR – ATSC/8VSB · NTSC DIGITAL PROCESSING:

Traditional sweep architecture meters spend more time missing signal information than measuring it! The H45 has been designed from the ground up to instantaneously obtain all the information in a signal in real time. With 20MHz digitally captured every 10ms, no detail escapes H45’s eye. The H45 with real-time digital processing is a total revolution.

Time Warner Cable

13820 Sunrise Valley Drive Herndon, VA 20171 P: 703-345-2749 Contact: Joanne C. Luger E: [email protected] W: timewarnercable.com Segments of Industry Served: MDU/PCO Products and Services: Internet and Video Services/ Programming Time Warner Cable Mobile Internet provides our customers with an online connection that’s there for them on their terms. It’s a totally portable Internet connection, so our customers never have to search for Wi-Fi hotspots. The IntelliGo Mobile Hotspot creates a personal hotspot to share a secure, superfast Internet connection with up to five users or

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

hot products Wi-Fi enabled devices that include printers, cameras, laptops and game consoles. It’s perfect for business meetings, road trips, family outings and more. It’s portable enough to fit into a briefcase, backpack, purse or even a jacket pocket. It is user friendly with a simple interactive setup and has GPS capability, expandable storage and more. It is the safe and secure Time Warner Cable Internet our customers know, on the go.

Verizon Enhanced Communities 13100 Columbia Pike Silver Springs, MD 20904 P: 866-638-6066 Contact: Jessie Chesson E: Jessie.a.chesson@ verizon.com W: www.verizon.com/communities

fiber-to-the premises network has the bandwidth to support the latest technologies today and those to come in the future. Verizon offers programs that benefit property owners as well as unique services that enhance any community by differentiating it from a property without FiOS services. Verizon makes it easy, providing custom installation with dedicated management and engineering teams as well as ongoing customer service. Learn how your property can get an upgrade and benefit from the value of having an all-fiber-optic network at www.verizon.com/communities.

ViewTEQ

Segments of Industry Served: MDU/PCO Products and Services: Internet and Video Services/ Programming; Customer-Facing Applications

1020 NW 6th St., Ste. A Deerfield Beach, FL 33442 P: 954-351-1121 F: 954-351-6977 Contact: Carl Klein E: [email protected] W: www.viewteq.com

Verizon Enhanced Communities is Verizon’s business unit dedicated to serving single- and multifamily residential, mixed-use, and commercial multitenant properties with Verizon FiOS Internet, TV and phone services delivered b over the award-winning Verizon FiOS all-fiber-optic network. Verizon’s

Motorola’s Passive Optical LAN Solution… Fiber to the ________. A. Desk B. Dorm C. Guestroom

D. Hospital Bed E. Classroom F. All of the Above

Motorola’s Passive Optical LAN (POL) Solution is a highly reliable and economically disruptive LAN solution that will revolutionize how voice, video and data are distributed throughout the enterprise. POL replaces existing LAN connections with a single high capacity fiber optical cable designed to connect the end user directly to the data center. Derived from carrier grade passive optical networking (PON) technology, POL allows end users to realize substantial CAPEX and OPEX savings while taking significant steps towards becoming a more green enterprise.

For more information, call us at 888.293.5856 or visit amt.com.

Motorola AXS 1800

Multiple Solutions. One Source.

Advanced Media Technologies® | 3150 SW 15th Street | Deerfield Beach, FL 33442 954.427.5711 | www.amt.com | [email protected] MOTOROLA and the Stylized M Logo are registered in the US Patent and Trademark Office. © Motorola, Inc. 2011

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

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hot products Segments of Industry Served: MDU/PCO; Telcos; Cable TV; Hospitality Products and Services: Video Headends and Related Equipment; Passives – Inside Plant; Customer-Premises Equipment; Test Equipment The ViewTEQ VTM12 integrated headend system consists of a 12-slot mounting chassis, up to 12 high-quality SAW filter modulators, a plug-and-play backplane, an integrated 12-channel combiner and a universal 90-260V power supply. Install the modulators by sliding them into the chassis slots. This connects the power plug and also connects the modulator output directly to the integrated 12-way combiner, eliminating unnecessary cabling and potential connection problems. The VTM12-CPC chassis and VTM12-* modulators use only three rack units, making for easy installation and efficient use of rack space. All components come with three-year warranties.

Walker and Associates 7129 Old Hwy 52 N Welome, NC 27374 P: 800-WALKER1 F: 336-731-3089 Contact: Randy Turner E: [email protected] W: www.walkerfirst.com

Segments of Industry Served: Telcos; Cable TV; Municipalities Products and Services: Passives – Outside Plant; Active Electronics – Wireless; Structured Wiring; Test Equipment; Planning, Design or Construction; Customer-Premises Equipment Walker and Associates is the premier distributor of network products solutions. It provides world-class supply-chain management, network deployment kits, quality installation, expert systems integration and unsurpassed service to U.S. telecommunications service provider markets. Since 1970, Walker has remained an aggressive industry leader by offering products that support leading-edge technologies, such as IP, network access, 802.11 wireless, point-to-point wireless, Ethernet over copper, CWDM, passive connectivity, digital cross-connect systems, power products, cable, routers, Ethernet switching and more.  Walker’s services help reduce the costs of installing and maintaining equipment at customer locations. The company helps its customers solve business challenges and increase their ability to meet their customers’ expectations. The company is celebrating 40 years of success with a regular service base of over 1,200 domestic service provider customers. Walker and Associates is headquartered near WinstonSalem, N.C., and is a certified women-owned corporation.

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| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

D E I SSIF

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Department of Intelligent Stuff and How

CLA

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March 31, 2011

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Phone code: 720.514.5811

THE LAW

Cable Home Wiring Rules And Cable Competition MDU owners who want to open their properties to multiple cable providers may be able to use the FCC’s cable home wiring rules for this purpose. By Carl E. Kandutsch ■ Attorney

A

re the FCC’s inside wiring rules, including the rules for homerun wiring and cable home wiring, still relevant in a competitive marketplace characterized by nonexclusive access to multidwelling unit (MDU) properties? In an article in the January/February issue of Broadband Properties, I identified three reasons property owners might be reluctant to use the Commission’s procedures for gaining control over home-run wiring: First, implementation of those procedures is complex, time-consuming and easily blocked or delayed by incumbent cable operators; second, whether and how the rules apply when the same wiring is used by the incumbent cable operator to deliver services other than video services is unclear; and third, the rules may be preempted by contractual language in the incumbent’s right-of-entry agreement. This article suggests ways for MDU owners to leverage other FCC regulations – the rules for cable home wiring (47 C.F.R. § 76.802) – to achieve results they might otherwise attain by means of the home-run wiring rules (47 C.F.R. § 76.804) while avoiding some of the problems with those rules. Note: The legal analyses of FCC regulations presented in this article are for informational purposes only and should not be construed as legal advice. Interested parties are strongly advised to consult with legal counsel prior to undertaking any action based in whole or in part on the analyses included herein. To begin, let’s recall some defini-

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tions. The FCC defines home-run wiring as “the wiring from the demarcation point to the point at which the multichannel video programming distributor’s (MVPD’s) wiring becomes devoted to an individual subscriber or individual loop.”1 By contrast, cable home wiring is “the internal wiring contained within the premises of a subscriber which begins at the demarcation point.”2 Stated without the jargon, home-run wiring is on the provider’s side of the demarcation point, and cable home wiring is on the subscriber’s side of the demarcation point. The location of the cable demarcation point therefore determines which wiring is home-run wiring and which wiring is cable home wiring. We will return to the concept of the demarcation point later. First, we provide a brief summary of the cable home wiring rules, with an eye toward answering the question: Can anything be achieved by use of the home-run wiring procedures that cannot be more easily achieved by use of the cable home wiring rules? Cable Home Wiring Rules The cable home wiring rules were first promulgated in 1993 to address the

disposition of in-building wiring when customers in single-family homes terminated cable services. The rule was intended as a consumer protection measure to prevent a cable operator from preempting a subscriber’s desire to switch to another cable provider by threatening to remove wiring from inside the subscriber’s home. The rule prohibited removing wiring on termination of service unless the cable company had offered to sell the wiring to the subscriber at a quoted purchase price. In its 1997 rule-making proceeding, the FCC expanded its regulatory regime to address wiring in MDU buildings. To accommodate wiring in the MDU environment, the Commission divided in-building wiring into two subcategories: cable home wiring runs inside an MDU resident’s living unit, ending at the demarcation point 12 inches outside the unit, and home-run wiring extends from the demarcation point through the building’s hallways to the cable operator’s junction box (where the wiring first becomes “devoted to an individual subscriber”). Cable home wiring in MDU units would be treated like wiring in a single-family residence under 47 C.F.R.

About the Author Carl Kandutsch holds a Ph.D. from Yale University and a J.D. from the University of Washington. A former FCC lawyer, he currently has a private legal practice and is a principal at ComGroup Associates LLC, a consulting firm that represents professionals in the multifamily real estate industry with regard to telecommunications matters. You can reach Carl at [email protected] or 207-659-6247. Find out more at www.kandutsch.com.

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

THE LAW § 76.802 (with minor adjustments), and home-run wiring would be subject to the procedures specified in 47 C.F.R. § 76.804. Unlike the home-run wiring rules, which regulate the relationship between the cable operator and the owner of the MDU building, the cable home wiring rules address the relationship between the cable operator and the subscriber. The FCC’s rule for cable home wiring in MDU buildings provides that when an individual subscriber in an MDU building voluntarily terminates service, the cable operator may not remove the cable home wiring unless it offers to sell the wiring to the terminating subscriber at replacement cost, the subscriber declines, and neither the MDU owner nor the alternative provider notifies the cable operator that it wishes to purchase the wiring after the subscriber declines. “If the [incumbent cable operator] is entitled to remove the cable home wiring, it must then remove the wiring within seven days of the subscriber’s decision [not to purchase], under normal operating conditions, or make no subsequent attempt to remove it or restrict its use.”3 The effect of the cable home wiring rules is to transfer ownership of the home wiring – the cable wiring on the subscriber’s side of the demarcation point – from the incumbent cable company to the subscriber who terminates cable service. In other words, home wiring not removed by the incumbent within seven days after the subscriber’s voluntary termination of cable service is deemed abandoned to the subscriber. Presumably (depending on the state’s abandoned-property laws), when a former cable subscriber moves out of his or her unit without removing the home wiring, that wiring is abandoned and becomes the property of the building owner. As the legal owner of home wiring that is not removed after termination of services, the terminating subscriber or the property owner may authorize an alternative video provider to connect its signal distribution system to the wiring at the demarcation point. The incumbent provider has an affirmative obligation to facilitate the alternative provider’s access

Placing the demarcation point 12 inches outside a subscriber’s doorway did not help alternative providers gain access, because that point was usually behind drywall and inaccessible. to the wiring at that point. According to the rule, incumbent cable operators “must take reasonable steps within their control to ensure that an alternative service provider has access to the home wiring at the demarcation point.”4 the Sheetrock Order’s effect As mentioned above, the cable demarcation point is important because it marks the boundary between cable home wiring (on the subscriber’s side of the demarcation point) and home-run wiring (on the provider’s side). The FCC defines the cable demarcation point as “a point at (or about) 12 inches outside of where the cable wire enters the subscriber’s dwelling unit, or, where the wire is physically inaccessible at such point, the closest practicable point thereto that does not require access to the individual subscriber’s dwelling unit.”5 If one of the essential functions of the demarcation point was to facilitate competition by designating a location at which alternative providers could access existing inside wiring,6 the FCC’s definition did not well serve that goal: Apartment owners were loath to allow alternative video providers to bore holes through drywall in the hallway 12 inches outside residential units, and few alternative providers were eager to snake cable wiring from a junction box behind drywall through hallways to individual units. The Commission addressed this dilemma in 2007 by issuing the so-called Sheetrock Order.7 In that Order, the FCC ruled that in any building where the inside wiring is located behind drywall at the presumptive demarcation point 12 inches outside a unit, the wiring is considered to be “physically inaccessible,” and the demarcation point is located at the point where the wiring

first becomes physically accessible. In a typical MDU building, the wiring first becomes physically accessible at the incumbent’s junction box. The Sheetrock Order was first announced in the FCC’s 2003 amendment of the wiring rules.8 Cable overbuilder RCN-BeCoCom LLC had filed a request for a letter ruling that described its difficulties accessing cable home wiring at demarcation points 12 inches outside subscribers’ units. Because property owners were reluctant to allow RCN to drill through drywall in hallways at demarcation points, RCN’s only options were to install additional sets of home-run wires or to access the wiring at incumbents’ junction boxes in utility closets. The first option was a nonstarter because building owners objected to the disruption associated with installing a second wire. As for the second possibility, “[n]or was connecting to the operator’s existing wire [at the junction box] an option … because the operator refused to cooperate in allowing such a connection.” Therefore, “RCN urges the Commission to find that cable wiring behind Sheetrock is ‘physically inaccessible,’ such that the demarcation point should be located not at the 12-inch mark, but rather at the operator’s junction box.”9 RCN’s request was granted. Although the FCC surely understood that, for all practical purposes, its Sheetrock Order would move the demarcation point to the junction box in a typical MDU building, the Commission chose not to make that understanding explicit. The Commission discreetly addressed the matter in a footnote: “We note that exactly where the wiring will become accessible (because it is no longer behind brick, cinderblock or sheetrock) will vary building by building.”

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

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THE LAW Under the cable home wiring rules, an alternative provider can access home wiring at the demarc point seven days after the subscriber terminates cable service. The net effect of the Sheetrock Order is this: In any case where video cable wiring 12 inches outside a residential unit is concealed behind drywall, the cable demarcation point is located at the junction box. Therefore, all video wiring on the subscriber’s side of the junction box, extending all the way inside the subscriber’s unit, is considered cable home wiring, and no home-run wiring exists. Recall that home-run wiring is defined as “the wiring from the demarcation point to the point at which the MVPD’s wiring becomes devoted to an individual subscriber or individual loop.” According to the Sheetrock Order in the circumstance described, the demarcation point is located at the junction box. However, the junction box is also “the point at which the MVPD’s wiring becomes devoted to an individual subscriber.” Because the demarcation point and the point at which the MVPD’s wiring becomes devoted to an individual subscriber are one and the same, there is no home-run wiring. On the other hand, cable home wiring is defined as “the internal wiring contained within the premises of a subscriber which begins at the demarcation point.” If the demarcation point is located at the junction box, then all the horizontal wiring – extending from within the premises of the subscriber to the junction box – falls within the definition of cable home wiring. If the purpose of the FCC’s homerun wiring procedures is to allow a property owner to gain control over inbuilding cable wiring so as to make the wiring available to an alternative provider at the incumbent provider’s junction box, it appears that following the Sheetrock Order, the same result can be more economically achieved by use of

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the FCC’s rules for cable home wiring. To what extent do the three problems associated with use of the homerun wiring rules affect application of the cable home wiring rules? Time and Complexity An MDU owner may invoke the FCC’s home-run wiring procedures to facilitate a competing video provider’s access to inside wiring at the incumbent’s junction box. This process can require three to four months’ time to complete, following the building owner’s delivery of initial notice to the incumbent cable provider, assuming that the incumbent cooperates. However, if the previous analysis is correct, application of the cable home wiring rules should (in theory) produce the same result – permitting access by an alternative video provider to existing inside wiring at an incumbent’s junction box – without comparable complications or delays. Under the unit-by-unit home-run wiring rules, a property owner must provide 60 days’ notice to an MSO before requiring the MSO to sell, remove or abandon home run wiring that extends from the junction box to the subscriber unit. However, under the cable home wiring rules, an alternative video provider has a right to access home wiring at the demarcation point seven days after the subscriber terminates cable service (assuming that the building owner consents and the subscriber wishes to switch video service providers) – and, according to the FCC’s Sheetrock Order, the demarcation point is located at the junction box. In other words, the cable home wiring rules, as modified by the Sheetrock Order, provide a much more efficient route to the same destination.

Multiple Services As I discussed in the previous article, the application of home-run wiring rules to wiring used to deliver data or telephone services in addition to multichannel video programming is unclear. An incumbent may argue that its ongoing use of the wire to deliver data or VoIP signals to subscribers gives it a “legally enforceable right to maintain” that wire, thus creating uncertainty surrounding application of the FCC’s transitional procedure for home-run wiring. No such ambiguity exists in the language of the cable home wiring rule: An incumbent’s obligations – including the obligation to take affirmative steps to facilitate an alternative video provider’s access to wiring at the demarcation point – are triggered by the subscriber’s “voluntary termination of cable service.” Cable service is defined to mean the “one-way transmission to subscribers of video programming, or other programming service”10 and does not include two-way transmissions such as Internet access service or telephone service. Because neither Internet access nor telephone service is a cable service, the application of 47 C.F.R. § 76.802 is not affected by the incumbent’s continued use of cable home wiring for the provision of either or both of those services. Therefore, an incumbent’s use of existing inside wiring for delivery of multiple services should not affect the application of the FCC’s cable home wiring rules. Preemption of Wiring Rules by Contract A final obstacle to use of the FCC’s home-run wiring procedures is the ease with which those procedures may be preempted by language contained in a contract between the incumbent provider and the property owner. It is not unusual for right-of-entry agreements written after 1997 to include provisions specifying that the disposition of inside wiring upon termination of the agreement is governed not by the FCC rules but by another procedure specified in the agreement. Because the home-run wiring rules are not intended to nullify contractual or other legal rights secured by state law, such provisions are enforce-

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

THE LAW able. A property owner who signs such an agreement and later wishes to make the existing wiring available to an alternative provider may be unable to utilize the FCC procedures. In contrast with the home-run wiring rules, which regulate dealings between cable operators and MDU property owners, the FCC’s rules for cable home wiring are, in essence, consumer protection regulations intended to benefit cable subscribers. It is hard to see how a contract between a cable operator and an MDU property owner could impair rights guaranteed under federal law to a third party. For example, it is unlikely that a property owner and an incumbent cable operator could effectively contract to block application of the cable home wiring rules by designating a demarcation point inside the subscriber’s unit, by stipulating that the cable company need not offer to sell the home wiring to an MDU resident who voluntarily terminates the incumbent’s video programming service or by agreeing that the incumbent may maintain control over the wiring indefinitely after the termination of video service. On the other hand, a right-of-entry agreement can circumvent the cable home wiring rules by declaring that the wiring belongs to the property owner, who grants the incumbent the exclusive right to use the wiring. 47 C.F.R. § 76.801 specifies that the rules “do not apply where the cable home wiring … is considered to be a fixture by state or local law in the subscriber’s jurisdiction.” The FCC procedures, whether for home-run wiring or for cable home wiring, are not intended to affect the legal rights of property owners under existing state law.

The FCC’s rules for cable home wiring are, in essence, consumer protection regulations intended to benefit cable subscribers. It is hard to see how a contract between a cable operator and an MDU owner could impair a third party’s rights.

7 8 9 10

cess existing cable home wiring in an MDU building.” Report and Order and Declaratory Ruling (CS Docket No. 95-184, rel. June 8, 2007), ¶ 5. “Location of the demarcation point is significant because under our rules, the demarcation point is the place where competing providers may access existing home wiring in an MDU building.” First Order on Reconsideration and Second Report and Order (CS Docket No. 95-184, rel. Jan. 29, 2003), ¶ 49. Report and Order and Declaratory Ruling (CS Docket No. 95-184, rel. June 8, 2007). First Order on Reconsideration and Second Report and Order (CS Docket No. 95-184, rel. Jan. 29, 2003). Id. at ¶ 51. 47 C.F.R. § 76.5(ff ).

Conclusion The difficulties surrounding use of the FCC’s procedures for gaining control over existing home-run wiring belonging to an incumbent cable operator may account for the apparent reluctance of MDU property owners to rely on those procedures. However, the FCC’s rules for cable home wiring as modified by the 2007 Sheetrock Order, as we interpret them, suggest that a property owner can use the cable home wiring rules to achieve the same result without most of the difficulties associated with the home-run wiring procedures. This is not to say that the FCC specifically intended its Sheetrock Order to produce the result outlined in this article or that a competitive strategy based on the analysis set forth in this article is without difficulties of its own. It suggests that such a strategy may be worth trying until the Commission undertakes the complicated task of unifying its inside-wiring rules or until those rules are rendered obsolete by further developments in wireless technology. BBP Endnotes 1 2 3 4 5 6

47 C.F.R. 76.800(d). 47 C.F.R. 76.5(ll). 47 C.F.R. § 76.802(a)(2). 47 C.F.R. § 76.802(j). 47 C.F.R. § 76.5(mm)(2). The Commission has described the cable demarcation point as “the point at which an alternative multichannel video programming distributor (MVPD) would attach its wiring to the subscriber’s wiring in order to provide service,” and as the location where “a competing provider may acMarch/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

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THE LAW

FCC to Impose New Disability Access Rules On Service Providers New rules for making video, VoIP, messaging and videoconferencing services more accessible are now in development. Some of them seem likely to impose costs on service providers and equipment vendors. By Robert D. Primosch ■ Wilkinson Barker Knauer LLP

P

roviders of video, voice and data services and their vendors should familiarize themselves with the FCC’s implementation of the TwentyFirst Century Communications and Video Accessibility Act of 2010. The purpose of the new law is to provide people with disabilities, including those who have visual or hearing impairments, with improved access to modern communications services and technologies. The FCC must promulgate many rules to implement the new law, including the ones discussed below, beginning October 8, 2011, or shortly thereafter. Following is an overview of some of the more significant issues on which the FCC is currently seeking comment from industry and the public. Further details are available in the FCC Notices of Proposed Rulemaking shown below. Video Description The Act directs the FCC to reinstate and modify rules that require television stations and multichannel video programming distributors (MVPDs) to provide or pass through a minimum amount of video programming that includes video description, defined as “the insertion of audio narrated descriptions of a television program’s key visual elements into natural pauses in the program’s dialogue.” In effect, video description does for visually impaired subscribers what closed captioning does for those who are hearing impaired. A copy of the FCC’s Notice of

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Under proposed rules, video providers must pass through video descriptions for the visually impaired if they are technically capable of doing so. Technical capability hasn’t yet been defined. Proposed Rulemaking for this matter is available at http://tinyurl.com/5tyueaj. Comments and reply comments are due April 28 and May 27, respectively Under the reinstated rules, beginning January 1, 2012, all MVPDs generally would be required to pass through any video description when a broadcast station or nonbroadcast network provides it, if the MVPD has the technical capability necessary to do so on the channel over which it distributes the station or network in question. MVPDs with 50,000 or more subscribers would be required to provide 50 hours per calendar quarter of video-described primetime or children’s programming on each of the top five nonbroadcast networks that they carry.

The FCC is examining, among other things, how it should determine whether an MVPD has the technical capability to pass through video description. For example, transmitting multiple audio tracks, even digitally, may require MVPDs to deploy equipment that they do not have in place today. At what point the costs of compliance should be considered high enough to render an MVPD technically incapable of complying with the rules has not yet been decided. In addition, the FCC has proposed to reinstate the process through which an otherwise technically capable MVPD may seek an exemption from the rules based on economic burden. Interested parties are asked to comment on the

About the Author Robert Primosch is a partner at Wilkinson Barker Knauer LLP, a law firm in Washington, D.C., that specializes in telecommunications law. You can reach him at [email protected].

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

THE LAW economic costs of the pass-through requirement and on whether any considerations are unique to particular MVPD delivery technologies, such as IPTV. Finally, the Act requires the FCC to initiate a future inquiry into whether video description requirements are feasible for video programming distributed via the Internet. Advanced Communications Services The Act also requires that advanced communications services (ACS) be accessible to persons with disabilities to the extent that accessibility is achievable. If accessibility is not achievable, then an entity covered by the Act must “ensure that its equipment or service is compatible with existing peripheral devices or specialized customer-premises equipment commonly used by individuals with disabilities to achieve access,” if that is achievable. In addition, each ACS provider “has the duty not to install network features, functions or capabilities that impede accessibility or usability.” The FCC’s Notice of Proposed Rulemaking on this matter is available at http://tinyurl. com/6dkfbrg. Comments and reply comments are due April 13 and May 13, respectively, and the FCC must finalize these rules by October 8, 2011. In this context, ACS is defined to include interconnected and noninterconnected VoIP service, electronic messaging service and interoperable videoconferencing service. The FCC proposes to define “disability” as a “physical or mental impairment that substantially limits one or more of the major life activities of an individual; a record of such an impairment; or being regarded as having such an impairment.” The FCC’s accessibility regulations for ACS will apply to any “manufacturer of equipment used for [ACS], including end user equipment, network equipment and software.” As to service providers, the FCC seeks comment on its proposal to apply the Act’s requirements to “all entities that make ACS available in interstate commerce, including resellers and aggregators.” The FCC also proposes to apply the Act to “entities that

Advanced communications services must now be accessible to persons with disabilities, if possible, but service providers have some flexibility in choosing how to do this. provide ACS over their own networks” and all entities that make ACS available in or affecting interstate commerce, including providers of applications or services that are accessed (that is, downloaded and run) by users over other service providers’ networks. The Act gives manufacturers and service providers some flexibility in choosing how they will make their products or services accessible. They may do so either by building accessibility features into the relevant equipment or service or “by relying on third-party applications, peripheral devices, software, hardware or customer-premises equipment that is available to consumers at nominal cost and that can be accessed by people with disabilities.” On the issue of achievability, the FCC proposes to consider only the factors set forth in the Act, which are • Nature and cost of steps needed to make a product or service accessible • Technical and economic impact • Type of operations (for example, the extent to which the FCC should consider an entity’s status as a new entrant in the ACS market and whether that entity has significant resources to devote to compliance with the Act’s requirements) • Industry flexibility (the FCC believes that it is “preclude[d] from preferring built-in accessibility over third-party accessibility solutions” but asks a variety of questions as to how it should determine whether a third-party solution complies with the Act, particularly as to cost, usability and documentation and support). The FCC’s rules also must provide that “[ACS], the equipment used for [ACS] and networks used to provide [such services] may not impair or impede the accessibility of information content

when accessibility has been incorporated into that content for transmission through [such services, equipment or networks].” The FCC asks whether such rules should ensure that “the accessibility information (e.g., captions or descriptions) are not stripped off when information is transitioned from one medium to another”; “parallel and associated media channels are not disconnected or blocked”; and “consumers … have the ability to combine text, video and audio streaming from different origins.” The FCC asks how it should implement the Act’s record-keeping requirements, which are not insignificant. Beginning one year after the effective date of the FCC’s new rules, covered entities must maintain compliance records that include their efforts to consult with individuals who have disabilities, descriptions of the accessibility features of products and services, and information about whether products and services satisfy the Act’s compatibility requirements. Complaint-related records must be maintained as well. An officer must submit to the FCC an annual certification that records are being kept in accordance with the Act. Finally, the FCC seeks comment on what remedies and other sanctions it should consider when an entity violates the Act. The FCC states that it may issue an “order directing a manufacturer to bring its next generation or equipment or device, and a service provider to bring its service, into compliance within a reasonable period of time,” but that ordering any retrofitting of equipment would be an inappropriate remedy. Due to the upcoming statutory deadlines, both rule makings described above will be on a fast track. Interested parties therefore should be prepared to express their concerns to the FCC sooner rather than later. BBP

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

45

INDUSTRY ANALYSIS

Consolidation in The Telecommunications Industry Citing economies of scale, telcos have entered a period of rapid consolidation. What will this trend mean for you? By Jill Kasle ■ The George Washington University

T

his is the story of how a momand-pop telephone company in Louisiana, founded some 30 years after AT&T was incorporated, grew big enough to merge with a gigantic telephone company that didn’t even exist when the AT&T divestiture case was filed – and what this all means for you. Since the beginning of the telecommunications business, there has always been a very large number of very small companies – the so-called “independent” telephone companies. These companies were so small (hundreds of subscribers instead of the tens of millions that the big companies had) and so nonoffensive (no insider trading charges, no antitrust violations) that they flew largely under the radar. Though these companies had to meet obligations imposed by state public utility commissions and, often, answer to local governing bodies, for the most part they were left alone. Even the Modified Final Judgment, the 1982 court order that broke up AT&T, said nothing about independent telephone companies. But some of these independent companies are ambitious – and one of the most ambitious is CenturyLink, a company based in Monroe, La., that has just merged with Qwest. CenturyLink’s beginnings are so homespun that if a movie had been made about the origins of the company, the part of CenturyLink’s founder would surely have been played by Jimmy Stewart. In 1921, a man named William

46

The breakup of the old AT&T created opportunities for new competitors, which are now reassembling what was broken apart in 1984. Clarke Williams, a former manager of the Ozon Telephone Company in western Texas, accepted a job in the payroll department of Southern Bell in Monroe, La. Shortly thereafter, Williams married a woman named Marie Hill, a former teacher and operator for the Mertzon Telephone Company in Mertzon, Texas. In 1930, Mr. and Mrs. Williams purchased the Oak Ridge Telephone Company, which was located near Monroe, La., and served all of 75 customers. The Williamses’ front parlor became the company headquarters. Marie Williams, assisted by two young girls, switched calls around the clock except between the hours of 10 a.m. and 3 p.m. on Sunday, when the customers were at church and Sunday supper. Each month, Marie Williams wrote out the customers’ bills by hand, and the Williamses’ eight-year-

old son, Clarke, delivered the bills on his bike. In 1946, Clarke Williams came home from serving in World War II and married Mary Kathryn Lee. His parents gave the Oak Ridge Telephone Company to the young couple as a wedding gift. For the next 50 years, Clarke Williams led the company on an acquisitions spree so extensive that by 2009 the company, now known as CenturyLink, had operations in 33 states and was the largest independent telephone company in the country and the fourth-largest (by access lines) telecommunications provider in the country. Then the economy tanked, credit dried up, and CenturyLink’s executives retreated to their boardroom to ponder their next move. And what a move it turned out to be: the acquisition of Qwest, a multibillion-

About the Author Jill Kasle is a law professor at The George Washington University. She was a member of the defendant’s trial team in United States v. AT&T and, with Professor Christopher H. Sterling, wrote “Decision to Divest,” a four-volume study of the divestiture case. You can reach her at [email protected].

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

INDUSTRY ANALYSIS dollar company that had acquired, among other things, U S West, a regional Bell operating company. As more and more customers turn to the Internet as their main form of communication, wireline companies such as CenturyLink and Qwest find themselves in an industry sector where the competition is heating up. By joining forces, wireline companies save money, gain clout and reduce their operating costs. The merger of CenturyLink and Qwest, a transaction valued at $25 billion, promises to be one of the biggest examples of the benefits of consolidation. The two companies have estimated that they will eventually save $625 million in yearly costs. CenturyLink and Qwest are by no means the only couple at this dance: AT&T just announced a deal, valued at $39 billion, to acquire T-Mobile, a transaction so enormous that it has the potential to reshape the telecommunications industry.

So what does all this mean to you? The answer, of course, depends on who the “you” is: • If you’re a customer, you might benefit from the oft-touted economies of scale that result from a consolidation; in other words, you might actually see lower prices. • If you’re a broadband consultant, economic development professional, or telecommunications lawyer, the news is definitely good: If the number and pace of consolidations really does increase, as forecasts suggest, there will be plenty of fee-based work to go around. • If you’re a real estate developer or city government official (or a consumer) hoping for better broadband in your development or city, the news is mixed. A consolidated company, especially in an area where scant competition exists, has little incentive to negotiate. • If you’re a lawyer at the Antitrust

Division of the Justice Department or on the staff of the communications subcommittee of the Senate Committee on Commerce, Science, and Transportation, you’re keeping a close eye on things and wondering whether the telecommunications industry is going to return to the “Wild West” days of the 1990s, when everyone seemed bent on acquiring everyone else. • If you are the late Harold Greene, the no-nonsense judge who presided over the AT&T divestiture case and all but insisted on the breakup of the company on the grounds that telecommunications is not a natural monopoly and that the best and most cost-efficient service could be provided by a disaggregated telephone business, you just might be watching, from your seat in Heaven, as the telecommunications industry reassembles itself and wondering if, in fact, you were wrong. BBP

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March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

47

INDEPENDENT TELCOS

FTTH and Independent Telcos Telcos are beginning to look beyond the triple play to new applications, such as meter reading and mobile backhaul. By Masha Zager ■ Broadband Properties

About the List Since 2005, Broadband Properties has maintained a list of independent telephone companies that deploy fiber to the premises. We’ve published the list at least twice each year, and we also maintain it online at www.bbpmag.com/search. php to enable you to search, sort and download this information. The online list includes several other types of deployers in addition to independent telcos. Although we gather information from as many sources as we can, we know the list is not complete. To add to the list, fill in missing information or correct any errors, please contact [email protected].

B

roadband Properties’ list of independent telcos deploying or planning fiber to the premises has now grown to 576 – more than 12 times the size of the first list the magazine compiled in 2005. That means about half the independent telcos in the United States now have at least some experience deploying fiber to the premises.

gram. The Rural Utilities Service (RUS) awarded $3.6 billion in broadband stimulus loans and grants, much of it for FTTH projects. Much of the RUS funding was awarded to independent telcos, largely because these companies are RUS’s traditional clients, and the agency was directed to give preference to companies it had worked with success-

“I never want to dig up this town again,” said one independent telco general manager, explaining why he replaced deteriorated copper with fiber. FTTH has now become the default technology choice for telcos when they have to build new plant. Although not many have undertaken to replace their entire networks with fiber, telcos tend to choose future-proof fiber whenever they wire new subdivisions, replace deteriorated copper plant or overbuild other providers’ territories. “I never want to dig up this town again,” one general manager said, explaining that the fiber he was putting in the ground was likely to outlast his own career. Another reason for the growth of the list is the broadband stimulus pro-

48

fully in the past. Many of these stimulus projects are now in progress. Additional drivers for independent telcos’ adoption of FTTH include • ongoing improvements in technology that have reduced the cost of deploying fiber • a tradition of commitment to local

economic development and quality of life • a desire to provide advanced services to both residential and business customers. Many, if not most, of the telcos on the list are in the midst of long-term fiber upgrades. After starting with trial deployments, they commit to building out fiber wherever they can make an economic case for it. In addition, early adopters of FTTH have continued to upgrade their fiber electronics. Though our list still shows some BPON technology, we suspect that most of it has been upgraded by now. By installing new electronics on existing networks, these telcos are demonstrating that FTTH is indeed future-proof. Why Build Fiber? Independents have told us they are building fiber networks because • their old copper plant was failing, and they didn’t want to replace it with more copper that would soon be obsolete

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

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

INDEPENDENT TELCOS What Is an Independent Telco? The companies that appear on this list are licensed providers of wireline voice services other than Verizon, AT&T and Qwest. They are regulated in the United States as ILECs (incumbent providers), CLECs (competitive providers) or both. The majority are rural providers, many of them cooperatives or small family-owned businesses that were set up 50 or more years ago to offer telephone service in regions not covered by the Bell system. A smaller number came into existence after the Telecommunications Act of 1996, some specifically to build fiber-to-the-home networks in new housing developments and others to serve businesses or offer alternatives in underserved areas. Some cable operators also have CLEC certificates and are included on the list. Today, many non-telephone companies deliver voice services and are functionally equivalent to CLECs. Although the telco category is becoming less meaningful as a result, telcos still exist as a historical and legal category, and our definition is consistent with industry usage. As we went to press, the CenturyLink-Qwest merger had just been granted final approvals (see Consolidation in the Telecommunications Industry in this issue), so CenturyLink will not appear on this list in the future. To the extent possible, we have excluded from the list telcos whose only involvement with FTTH is to deliver services over fiber access networks that they do not own – for example, networks owned by municipalities or housing developers. • they wanted to offer advanced services and decided that FTTH would allow them more options • their service areas were losing jobs and population, and they believed fiber would bring more economic opportunities • their service areas were growing rapidly, and new residents moving from metropolitan areas were attracted to fiber as an amenity • they determined that the capital cost of FTTH was comparable to that of copper, but fiber cost less to maintain and had a longer useful life • they saw opportunities to compete in areas where businesses and residents were seeking additional service choices, but incumbents were not upgrading their networks. Because independent telcos rarely compete with one another, they share experiences and pool information. As information spreads, one success gives rise to another – and over the last several years, with fiber deployment costs falling and the cost of copper rising, more and more independents have been encouraged to try out this technology. What the Numbers Show 1 Larger telcos are more likely to deploy FTTH only in greenfield developments; smaller telcos are more likely to overbuild their own or other telcos’ service areas with fiber.

Most of the largest telcos on our list – sometimes called Tier-2 telcos – including CenturyLink, Fairpoint, Frontier, TDS Telecom and Windstream, have greenfield-only fiber deployment policies. (There are occasional exceptions, such as TDS Telecom’s building of FTTH in response to municipal competition in Monticello, Minn. In addition, Frontier’s FTTH network, with 500,000+ homes passed, was acquired from Verizon.) The large telcos that are overbuilding their own or others’ territories with fiber, such as SureWest and Cincinnati Bell, tend to be metropolitan rather than rural. In other words, most of the fiber-

to-the-home upgrades outside metropolitan areas are being done by smaller, or Tier-3, telcos. Though some of these are pure CLECs, many are cooperatives and small family businesses that until recently never marketed their services proactively, let alone competed with other providers. When we speak with these companies, they consistently express surprise at the failure of their larger competitors to compete – and at how easy it is to cherry-pick profitable customers that larger companies are overlooking. 2 Most independent telcos building fiber networks are incumbent providers or subsidiaries of incumbents.

FTTH Network Builders by Type ILECs and their CLEC subsidiaries 86%

Pure CLECs 14% About six out of seven independent telcos deploying FTTH are incumbents, though many are overbuilding nearby towns with fiber.

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

49

INDEPENDENT TELCOS Six out of seven companies on the list are ILECs (incumbent carriers dating from before 1996) that are either replacing old copper plant with fiber, building fiber to new developments in their service areas or overbuilding towns near their service areas where they have name recognition – or some combination of the three. In most states, they must form CLEC subsidiaries in order to move outside their traditional service areas, but we still list them as ILECs even if their fiber-to-the-home networks are only in their CLEC areas. The remaining companies are pure CLECs (competitive carriers), many of which have no traditional geographic base. These companies seek out promising territories to overbuild with fiber. A few of them build hybrid fiber-coax networks in some areas and FTTH networks in others. The proportion of ILECs to CLECs has remained surprisingly constant over the years that we have tracked telco fiber builds, even as the number of companies on the list increased by a factor of 12. Many of the pure CLECs originally collaborated with housing developers to build networks in greenfield developments and masterplanned communities, but after the housing market peaked, some turned to overbuilding. A few, such as ComSpan USA and Hiawatha Broadband, adopted an overbuilding model from the start. Others focus on serving small and midsize businesses. The typical independent telco serves a few thousand customers in one or two rural counties; however, the companies on this list range from corporate giants to tiny cooperatives that serve a few hundred customers. Likewise, their fiber deployments (not counting Frontier’s FiOS acquisition) range from SureWest’s 150,000 homes passed to pilot projects with fewer than a hundred homes passed. 3 Though the triple play of voice, data and video services is still standard, additional services are becoming more common.

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Services Delivered or Planned on FTTH Networks Triple Play Plus Additional Services 4%

Voice, Data, Video 57%

Voice, Data 19% Other 1%

Voice, Data Plus Additional Services 1%

Unknown 18%

In residential areas, the triple play of voice, video and data continues to be the standard offering.

Many independent telcos manage cable TV networks alongside their telephone networks. Deploying fiber to the home allows them to merge the two networks, reducing operating costs while adding highdefinition TV, DVR, video on demand and a wider selection of channels. Telcos that don’t own cable TV plant throughout their service areas are losing landlines to cable companies and must usually offer video to compete with cable. Though they have the option of reselling satellite TV, they often prefer to operate their own networks, and they consider FTTH when they cannot reach all their customers with DSL. Beyond the triple play, the most

common residential services offered are security monitoring, gaming and home automation; business applications are also offered by telcos that have significant numbers of business customers. Two important new services for fiber networks are mobile backhaul and meter reading. In the last two years, as demand for mobile bandwidth has grown, fiber-based backhaul has become critical. FTTH equipment vendor Calix says hundreds of its telco customers now use FTTH technologies to serve wireless operators. A case study of an Alaskan telco is described in an article in this issue, Making the Most of a Fiber Network. Because deployments to cell towers rarely

FTTH Technology Used

Note: Some telcos use multiple technologies. 392

GPON

144

Active Ethernet

70

Unknown/Undecided

42

BPON

36

EPON

15

PON Unspecified RFoG

7

Passive optical networks are far more common than active networks, but active networks continue to gain in popularity. Many telcos deploy PON to residential customers and active Ethernet to business customers.

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

Continued on Page 83

aul only for long-h d se u ce n o , mises. ptic cable end users’ pre ecade, fiber o d to t ay as p w e e th th l r Ove gy, and xtended al ns, has been e roven technolo p io , at re ic u n u at m m m a co of old copper me (FT TH) is o se h o e th th w to lo e r b e e and even Today, fib oice for servic comparable to ch e f o ar y at g th lo s o n st with co the tech certain to be is it s, ie g lo o techn ve. In one home in fi g forward. t n u vi o o ab m rs to e d le b vi pro availa is closer States, FT TH is den, the figure e Sw d an k In the United ar a, Denm bility and as Japan, Kore andwidth, relia b le b la ai av r in countries such new services fo e to vast gains u le D . ab n ve e fi f d o t an u o growth to four ions spur economic ore – these nat at m th s d n an ai g g n – ti u ty p securi oud com nce learning, cl ta is scale. d , th al e h tele ber on a broad jobs – fi g n yi lo p e d ained 700,000 d to st te su it s m e m ss e co n e si u av d h ents stimulate er-fed home b b ym fi , lo e p n e o d al r e 0 b In 201 nomy. Fi try, a poor U.S. eco ross the coun in ac – s s ie b it jo n u w e m n m mostly the th in co er expansion in conomic grow h e rt d fu f an o t e n e is m m invest ed the pro nding establish fu s lu u im st d an ers, real s network build e s. iv ar g ye h g ic h in w m , w n co is publicatio als an overvie th ci in ffi e o t ar n e ils m ta e rn The d d gove It communities. d managers, an to an rs rs e e liv p e lo d it ve e ts d estate ell. the benefi the home, as w to ber optics and r fi e f o b fi r e r w fo o p se e of th nmental ca rg. ess and enviro n si u b e .FT THCouncil.o th w s e w w t mak si vi e er, you’ll as ation, ple read this prim e ’v u yo n e For more inform h W ic. e Light Fantast We call fiber th see the light!

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2

| The Advantages of Optical Access | FTTH Council

Contents Reliability... Bandwidth... Affordability... Future-Proofing... Standards... Security... Economic Development... Sustainability... New Broadband Content & Services... Higher Revenue... Fiber to the Home: Pathway to Ultra-Broadband. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Fiber and Bandwidth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Applications for FTTH Providers: Beyond The Triple Play. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Fiber: The Light Fantastic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Telehealth: The Time is Now. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 FTTH Aids Sustainability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Builders, Real Estate Developers and FTTH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Questions Real Estate Developers Ask About FTTH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Beating the Recession with Fiber: Three Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Focus on Municipal Priorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Key Questions Municipal Officials Ask. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 FTTH Success Stories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Introducing 1 Gbps to the Home. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Understanding Fiber Network Architectures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 FTTH Council Certification Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 This primer was originally written by Steven S. Ross and updated by him and by Masha Zager, both of the Broadband Properties staff. It summarizes research commissioned by the FTTH Council as well as independent reporting by the authors and by BBP contributing editor Joe Bousquin.

Local Economic Impact of FTTH Noted by FTTH Providers 42%

Large business development Work from home/SOHO expansion Business efficiency Rural growth/agricultural efficiency Quality of life (services, home education…) Construction stimulus Residential growth

22% 8% 6% 5% 3% 3% 0%

5% 10% 15% 20% 25% 30% 35% 40% 45%

FTTH providers notice significant economic impacts borne by fiber; 42 percent specifically cited expansions or establishment of large businesses. Source: RVA LLC. FTTH Council | The Advantages of Optical Access |

3

Fiber to the home:

F

Pathway to Ultra-Broadband

iber to the home (FTTH) has become the leading technology for next-generation communications networks worldwide. On every continent, telecom providers are building FTTH networks to replace legacy copper networks that are running out of headroom to support the demand for communications services. Because governments view fiber as critical national infrastructure, many have developed national broadband plans to encourage the buildout of fiber. Already, fiber reaches at least 200 million homes globally – a tenth of all the households in the world – and an estimated 62 million households subscribe to fiber-based services, including voice, video, data and more. In the United States, fiber reaches 20 million homes; half of those now have direct fiber optic connections, as do 17 million homes in Japan, more than 12 million in Korea and 8 million more in Europe. These numbers continue to grow exponentially. China alone expects to have 100 million fiber subscribers by 2015. Providers and governments around the world all agree fiber to the home is the endgame for communications infrastructure. No alternative infrastructure is even a contender (al-

4

The number of Internet-connected devices in the home will grow from 2 billion today to 10 billion in 2015, says Pyramid Research. Only FTTH can meet this demand for in-home bandwidth.

though wireless networks are being integrated with FTTH – more on that later), and everyone agrees that fiber will meet the world’s needs for the foreseeable future. The only debates involve the speed of the transition. Why Fiber? The reason for this striking degree of unanimity is simple: FTTH offers far

| The Advantages of Optical Access | FTTH Council

more bandwidth, reliability, flexibility, security and longer economic life than alternative technologies, even though its price is comparable. It is also less expensive to operate and maintain than copper. Because of these advantages, FTTH can support many more communications services than legacy infrastructures, including newly emerging services such as health care and cloud computing. Fiber’s reliability and security are particularly critical for such new services as telehealth and telepresence. FTTH also allows network operators to derive more revenues from today’s communications services. FTTH subscribers today often spend 30 to 40 percent more per month than DSL subscribers – not because basic services are more expensive (they aren’t), but because more and better premium services are available. For example, multiple simultaneous HD channels are difficult to implement well over any medium but fiber; 3D TV and high-definition video communications are even more challenging. At the end of 2010, Verizon, thanks to its all-fiber FiOS network, was within

Fiber duct being laid in Chennai, India.

a few cents per month of the highest average monthly customer revenue of any large network provider on Earth. Because other media have inherently limited capacity, tweaking more bandwidth from them becomes increasingly difficult and expensive as time goes on. This isn’t true of optical fiber, whose capacity is effectively unlimited. Fiber can handle any bandwidth demand with ease. In fact, one bundle of fiber cable not much thicker than a pencil can carry all of the world’s current communications traffic. The technologies for transmitting data over fiber are well understood, and the upgrade path for the electronic components that send and receive signals has been defined for years into the future. If anything, increasing fiber bandwidth will become less expensive rather than more expensive. Who’s Building FTTH? By our count, well over 700 network operators have already deployed FTTH in the United States. Even in a down economy, most developers put fiber into new properties and many are up-

grading existing properties. Larger telcos are deploying fiber in cities and suburbs, and smaller telcos in rural areas. Cable providers use fiber to compete for lucrative commercial-services business. Even some small electric companies have extended the fiber networks they use to manage their own facilities to serve their customers as well.

and municipal buildings. In 2010, when Google announced that it planned to build one or more community fiber networks, more than 1,100 local governments proposed their communities as suitable locations. (In March 2011, Google selected Kansas City, Kan., for its initial fiber deployment.) Adding Value to Properties Access to utilities makes private property more valuable. A house is worth much more if it has access to a public

Telepresence is one of the advanced applications that depends on a high-bandwidth, high-reliability network. In this photo, the people on the far side of the table are actually sitting in a remote office, but can interact with the local group as if they were physically present.

Municipalities are attracted to FTTH because it positions their communities for tomorrow’s jobs and economic growth. Nearly 100 localities have built or are building fiber networks to serve residents or businesses; hundreds more have fiber to schools

street, water and sewer services, public schools and other utilities than if it does not. In the same way, FTTH adds value to properties. Fiber connections make single-family homes easier to sell and multiple dwelling units easier to rent. Renters and buyers know they can get the most attractive services available on the market today – and that if an exciting new service is introduced in a few years, they’ll be prepared for that as well. This publication explores these issues, and more, in detail. It’s written in nontechnical language so you can understand the value of next-generation infrastructure – and what it means to you – without a degree in optical engineering. We want to communicate ... The Advantages of Fiber to the Home.

FTTH Council | The Advantages of Optical Access |

5

Fiber and Bandwidth Q: What is bandwidth? A: In a network, bandwidth (what engineers call bitrate) is the ability to carry information. The more bandwidth a network has, the more information it can carry in a given amount of time. Networks with high bandwidth also tend to be more reliable because fewer bottlenecks disturb the flow of information. Q: How much bandwidth – or information delivered by bandwidth – do we need? A: A standard-definition television signal requires a bandwidth of about 2 Mbps – two million bits (zeros and ones) per second. HDTV requires as little as 2.5 Mbps if the image is rather static – a person being interviewed, for instance. But fast action, such as in some sporting events, requires more – as much as 8 Mbps, even with new compression technology such as MPEG-4. Now, full-frame 3D is hot. While it can be delivered at 2.5 to 3 Mbps, a high-quality experience requires closer to 5 Mbps. 3D immersive HDTV – a technology already being used in some academic and industrial settings – will require between 50 and 300 Mbps. Q: What about data? A: Bandwidth requirements for many kinds of data are exploding. For example, the digital cameras that consumers buy can create larger and larger images. In health care, the medical images produced by equipment such as CT scanners are orders of magnitude larger than camera images – a hundred times larger, and more. The biggest growth in data transmission has been for video, and this trend is expected to continue at least for the rest of this decade. Video requires not only extra bandwidth but also extra reliability. The smallest delay in data transmission can result in distorted views.

6

Q: Can’t copper carry high bandwidth? A: Yes, copper can support high bandwidth, but only for a few hundred yards. The longer the signal travels on copper, the lower the bandwidth. Optical fiber is unique in that it can carry high-bandwidth signals over enormous distances. Fiber uses laser light to carry signals. Under some circumstances, a signal can travel 40 miles (60 kilometers) without degrading enough to keep it from being received. Another difference is that fiber is better able to support upstream bandwidth – that is, from the user out to the network. High upstream bandwidth is important for video communication and for many business applications. Q: What exactly makes fiber “future proof”? A: The equipment necessary to send light signals keeps getting better. So equipping an existing fiber network with newer electronics and with lasers that pulse light faster, or lasers using different wavelengths of light, can vastly increase available bandwidth without changing the fiber itself. The new electronics are very cheap compared with the original cost of laying the fiber. Therefore, once fiber has been deployed, network operators can keep increasing bandwidth at very little cost. Q: How long has fiber optic technology been in use? A: Fiber optic cable has actually been used in communications networks for more than 30 years. Fiber first delivered a signal directly to an American home (in Hunter’s Creek, Fla.) more than 20 years ago. Before that, fiber was – and still is – relied upon to carry communications traffic from city to city or country to country. The first trans-Atlantic fiber cable was laid in 1988. Almost every country on earth has some fi-

| The Advantages of Optical Access | FTTH Council

ber, delivering services reliably and inexpensively. Q: All providers seem to claim they have fiber networks. What’s different about fiber to the home? A: Don’t be fooled! It is true that most cable and DSL networks use fiber. In these networks, the fiber carries the signal close enough to a home so that copper can carry it the rest of the way. However, this approach requires expensive, difficult-tomaintain electronics at the point where the fiber meets the copper. The available bandwidth is far less than an all-fiber network. And these halfway approaches do not allow symmetrical bandwidth – existing cable and DSL systems can download much faster than they can upload information. Q: Isn’t that good enough? A: That depends on what you want to use your bandwidth for. If all you want is to send emails, download songs or share family photos, the bandwidth provided by today’s cable modems and DSL lines may be good enough. If you want to log on to the corporate LAN from home and work effectively, you’ll need more. And what about uploading a high-def video of the school play, or sitting down to dinner with family members a thousand miles away? Q: Why does it matter how close to the home fiber comes in DSL and cable systems? A: With copper cable, there is a marked relationship between distance and available bandwidth. For example, the latest commercial versions of DSL can carry a signal of more than 200 Mbps for about 750 feet. Over a distance of a mile, DSL can deliver only about 30 Mbps. That’s the theoretical limit. In practice, the real bandwidth is less. Q: With cable and DSL, there’s often a difference between advertised

providers can guarantee high speeds with little or no oversubscription. If a fiber network is designed properly, users will always get the speeds that are advertised. The Federal Communications Commission now insists that carriers deliver the bandwidth they advertise.

Source: BBP LLC

and actual bandwidth. Is that true for fiber? A: Cable, DSL and even wireless networks are usually more heavily oversubscribed than fiber – that is, providers promise users more than the total amount of available band-

width because they know all users aren’t going full throttle most of the time. As a result, copper-based networks slow down during periods of heavy use – such as when teenagers come home from school. Fiber has enough bandwidth that

Q: Is FTTH technology expensive? A: In new construction, fiber costs about the same as copper to build, and it costs much less to operate and maintain. Building fiber to the home is expensive only when compared with not building anything – that is, with adding new electronics to an existing copper network or building fiber only part of the way to the home. The problem is that these less-expensive

Bandwidth Comparisons 64 Kbps: Phone Line

per er ing F i b ow ps Gr Gb nd 11) 1+ r, a (20 e Us

1+ Use Gbp r, a s F i b n (20 d G er p 11 ro er ) w in g

Visualizing Fiber-Borne Bandwidth

128 Kbps: ISDN

1.5 Mbps for a T1 Line

20 Mbps: Wireless maximum per user with latest technology

Only the Beginning In a few years, even 1 Gbps will look small. Soon, most content will be 3D and ultra-high-definition.

100 Mbps: D  SL maximum per user with latest technology

160 Mbps: Cable maximum per user with latest technology

1 + Us Gbp s er , a Fi b n (20 d G er p e 1 r 1 ) ow r in g

er r p ing e b w i s F Gro) p d Gb an 011 1+ er, (2 Us

Today, fiber’s bandwidth is orders of magnitude bigger than other technologies. As the new generation of 10 Gbps equipment is deployed, the fiber circle will move off the page.

FTTH Council | The Advantages of Optical Access |

7

solutions don’t always meet users’ needs. In the last few years, the flood of video content has outrun the ability of older technologies to handle bandwidth demands. Providers are shutting off or slowing

down service or imposing prohibitive fees for customers who exceed monthly bandwidth caps. Customers don’t like these restrictions, and they don’t appreciate being called “bandwidth hogs” for using

services they have paid for. In addition, it’s not clear that providers save money by failing to meet users’ needs, because limiting bandwidth means limiting revenue potential as well.

The Inevitability of Bandwidth Growth Increased bandwidth lets us do familiar things faster. Send an email. View a website. But its real value is that it lets us do entirely new things with our computers, cameras, televisions – with our network. Today, the network is often called the “cloud,” which is a way of saying, “I don’t even have to think about where data is stored or where processing is happening.” Things we talk about in everyday conversation today would have been bewildering a decade ago. In the past few years, we have seen such dazzling innovations as • Tablet computers for easy access to games, ebooks, TV programs, email, shopping, banking and an everexpanding suite of new “apps.” • Smartphones that aren’t just for mobility anymore but are increasingly used for personal media consumption in the home. • Internet-connected televisions, radios, set-top boxes, Blu-ray Disc players, cameras and picture frames that receive or deliver movies, TV and photos via the Web. • Voice over Internet Protocol telephones that direct incoming callers to any line and take messages in text and video as well as voice. • Social media that keeps people continuously in touch and up to date – who needs phone calls anymore? • Two-way video communication whose quality is good enough to bring the illusion of “being there” to teleconferencing. It’s called “telepresence.” Highdefinition video communication has even reached the home market; telecommuting workers can send telepresence robots in their offices to sit in for them at meetings while they watch from their home TVs. • Easy distribution of user-created video that lets grandparents see children, musicians develop audiences and manufacturers demonstrate new products. • Digital media lockers that let consumers store music, TV, videos and services in the cloud and access them from many devices. • Telehealth devices and applications that bring medical services to remote areas and to the homebound elderly.

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| The Advantages of Optical Access | FTTH Council

YouTube appeared in February 2005 and quickly became one of the five largest users of bandwidth on earth and the largest single user of Internet bandwidth. The social networking platform Facebook, the world’s most visited site, has more than 600 million active users who share photos and videos, play games and use half a million other embedded applications. The least expensive netbooks today come with 160 GB hard drives, because users need the file space. And if they need the file space, they also need to transmit large files and back them up online. Users become annoyed when network speeds lag behind local connection speeds – and USB transfer rates have now reached 5 Gbps. Internet-connected TV sets and set-top boxes let viewers watch high-definition online video on the big screen as easily as they can watch video from the local cable or phone company. Users don’t have to “think Internet” to put Internet video on the TV. They just check out what’s available, using their TV remotes. Internet-capable TV models are today’s standard offering. New services let people access health care and take classes from their homes. With home automation, residents can take care of their homes while they’re away, using Internet- connected security cameras and remote energy monitoring devices. Telecommuting and home-based businesses are on the rise, too. In October 2010, market researcher Michael Render reported that new businesses created by fiber-connected residential users had pumped more than $40 billion into the economy in just the previous 12 months, the largest source of new jobs in 2010. Owners and managers of multifamily communities are turning social rooms into fiber-connected business centers and concierge offices. We have every reason to believe that innovation will continue, that bandwidth needs will keep on growing – and that only fiber to the home, with its superior reliability and plentiful upstream capacity, will be able to keep delivering the bandwidth we need.

Applications for FTTH Providers: Beyond The Triple Play

A

decade ago, cable companies introduced the triple play of voice, video and data that has now become the standard telecom offering worldwide. But fiber’s greater bandwidth and reliability gives FTTH providers the option to think beyond the triple play and offer multiplay services tailored to the needs of particular communities. Fortunately, new broadband applications become available every day, and many of them create opportunities for use or resale by fiber providers. These new applications fall into several categories. Some help differentiate fiber-to-the-home communities; some generate additional revenue streams for providers or help retain customers; still others can be used by providers or property developers to manage their assets more efficiently. Many do all three. Differentiating A Community Fiber has become the norm in new developments, especially in new masterplanned communities, according to market researcher Mike Render. In order to further differentiate their communities, developers are now seeking applications to leverage their fiber infrastructure. Telehealth gives residents instant access to medical specialists via videoconferencing from the home, the fitness center or the community room. The videoconferencing may be integrated with Internet-enabled diagnostic devices (blood pressure cuffs, respiration measurement, etc.), electronic medical records systems, online prescription services and online appointment scheduling. Telehealth helps keep older adults living independently longer, and it is a boon for members of the “sandwich generation,” who are responsible for caring for both their children and their elders. Social applications use the fiber infrastructure to build a sense of community. They range from social

one click to community services or schedule a dry-cleaning pickup, pizza delivery or home repair. These applications can also help owners control energy use. Mobility is easier to accommodate with a robust fiber-to-the-home network. Using the backhaul afforded by FTTH, providers can offer Wi-Fi connections to residents in indoor and outdoor public spaces throughout a community. Residents can bring their laptops or tablets to the pool, check email from the laundry room or listen to Internet radios in the gym.

networking sites focused on the community, to intranet sites featuring local news and events, to Web-based or IPTV video channels broadcasting local athletic contests, artistic productions and political discussions. Because these offerings can be interactive, they easily trump conventional “public access” stations on cable. Home-automation and concierge services, such as Verizon Concierge, take advantage of the fiber network within a community to make residents’ lives comfortable and convenient. Cameras that recognize residents’ cars entering the community can alert parking attendants and security personnel and then turn on lights and heating or air conditioning at home. Residents can connect with

Generating New Revenue Streams Customers have become used to purchasing such over-the-top Internet

Interest in Futuristic Services Current FTTH Users Over Age 55 36% 35%

Online face-to-face healthcare Very large HDD with super resolution One device for TV, Internet, & phone Advanced online shopping Two-way video calling Remote home and pet monitoring Advanced websites/full video Business video conferencing 3D TV Advanced online college

31% 30% 27% 26% 25% 23% 17% 16% 0%

5%

10%

15%

20%

25%

30%

35%

40%

Older FTTH customers put online face-to-face health care above other video services, but one in six say they’d also use FTTH for online courses. Source: RVA LLC.

Interest in Futuristic Services Current FTTH Users Under Age 40 Very large HDD with super resolution Business video conferencing Advanced websites/full video Remote home and pet monitoring Advanced online shopping Online face-to-face healthcare One device for TV, Internet, & phone Two-way video calling Advanced online college 3D TV

52% 52% 50% 49% 47% 47% 46% 42% 41% 33% 0%

10%

20%

30%

40%

50%

60%

Video applications are pacing broadband use by FTTH customers under age 40. Source: RVA LLC. FTTH Council | The Advantages of Optical Access |

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services as Skype or Netflix, but often they’re happier to deal directly with network providers they know and trust. Broadband providers of all kinds now offer a variety of applications to their customers through Web portals or through set-top boxes, often at lower prices than the customers could obtain by purchasing these services directly. These applications reduce customer churn; they lower expenses by keeping more traffic in-network; and they create new revenue streams. Because fiber-to-the-home networks have virtually unlimited capacity and unparalleled reliability and remote service monitoring, fiber providers have a far wider choice of applications for resale. Online storage allows users to store their data files on the Internet, access them from anywhere and share them with others. Indeed, the cloud computing revolution has moved applications from the desktop to the Web. Service providers are now supplying the types of services to business customers that until recently were provided by corporate IT departments. Home security, like many other technologies, is migrating from analog to digital. Digitally based home security allows residents to control settings, receive alerts and view their homes via the Internet or cell phone. Digital security systems also support a wider range of sensors – not only traditional motion detectors but cameras,

Fiber-connected cameras can be used for community security applications.

water detectors, smoke detectors and many others. Because digital security uses wiring that is already installed for broadband, it is inexpensive to install and makes economic sense for renters as well as homeowners. Over-the-Top Video may be offered as either an adjunct to or a substitute for a pay-TV offering, and it may be delivered either through a provider’s Web portal or via a specialized set-top box or a hybrid set-top box. The business models, technologies and even legal status of provider-delivered OTT video are evolving rapidly – a fact that demonstrates the enormous amount of interest in this application. If OTT video eventually displaces the traditional payTV model, fiber-to-the-home providers are well-positioned to benefit from this change because they can guarantee the quality of user experience. Videoconferencing or video chat is universally available through free or low-cost Web-based services, but it is cumbersome and the quality is often poor. Fiber to the home, with its high upstream bandwidth, presents opportunities for providers to make highquality videoconferencing avail­able,

Rural telco BEK brings local sports events to its video customers; this is the mobile studio.

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| The Advantages of Optical Access | FTTH Council

and several such services have been introduced in the past year. FTTH providers are generating new revenue streams not only from residential and business customers but also from advertisers, utilities and wireless providers. Targeted advertising sold to advertisers represents an important potential revenue stream. One mechanism is through IPTV, which lets providers insert ads based on nearly any criteria. IPTV ads can be sent to households with certain demographic criteria, or to households (or even individual TV sets) with certain viewing patterns. Another potential source of advertising dollars is t-commerce, in which television viewers click the remote on an ad – or even a product placement in a television show – to either see more information about the product or actually to order it. Automated meter reading is usually the first smart-grid application that utilities deploy because it is relatively straightforward to implement and has an immediate payback. Though most fiber deployers that have installed smart meters on FTTH networks are either public or cooperative electric utilities, a few telcos are installing and reading smart meters and charging utilities on a per-reading basis. Beyond automated meter reading, such smart-grid applications as demand-response programs, SCADA and outage investigation greatly reduce electric utilities’ operating costs. Smartgrid applications are major reasons that electric utilities across the country are now building fiber infrastructures. The federal government’s stimulus programs have subsidized smart-grid upgrades and coordinated FTTH with smart-grid initiatives. Mobile backhaul has become an enormous revenue opportunity for fiber deployers. The exploding demands for mobile bandwidth have made clear to wireless providers that they must upgrade the connections from their cell sites to the Internet

Join the FTTH Council Isn’t it time you enjoyed the benefits of FTTH Council membership? The Council offers several membership categories, with dues starting at only $395/year for organizations and as little as $50/year for individuals.

Remote music lessons.

(traditional connections are copper T1 lines with 1.5 Mbps bandwidth). FTTH deployers are already beginning to run fiber to the busiest cell sites – about one cell site in five is now served by fiber. In addition, the next generation of wireless architecture will move all baseband processing from cell sites to the cloud; cell sites will have to be connected via fiber to hubs where processing takes place.

ers communicate with tenants and employees. Guarding construction sites can be managed through IP-based video surveillance. Asset tagging, typically with inexpensive RFID, helps prevent theft or misplacement of equipment, and tags worn by employees help make sure people are where they’re authorized to be. Videoconferencing allows construction managers to make virtual site inspections more frequently than Property Management they can make physical inspections. Broadband enables property owners Online work order scheduling to control their properties and assets helps property managers be more remore efficiently than ever before. The sponsive to their residents while reducaddition of broadband – especially the ing operating expenses. Residents can high-capacity, high-reliability broadrequest repairs at any time – not just band that fiber enables – turns “smart” when the office is open or they can find buildings into “genius” buildings, the super – and management personaccording to one expert. Internetnel can deal with problems that require enabled sensors and applications aupersonal attention rather than routine tomate work that was once done by requests. Residents can be automatimaintenance crews – and get it done cally notified when work is completed. Energy management and water it more quickly and accurately. Broadmanagement can be broadband-enband applications also help ownabled. Motion sensors, intelligent thermostats and automated ventilation equipment can keep public spaces and unoccupied units at appropriate temperatures; applications that monitor and analyze usage help property managers and residents find opportunities to shift loads to nonpeak times and reElectric meter set up to transmit smart-grid information. duce their overall usage.

We are: n Independent telecom providers from across North America that are future-proofing their networks by upgrading to FTTH. n Competitive broadband providers that are differentiating their offerings with all-fiber connectivity. n A wide variety of FTTH equipment manufacturers and other broadband solutions providers showcasing their latest products. n Engineering, outside-plant, consulting and construction firms that work with telecom service providers to design and deploy North America’s next-generation networks. n Municipalities and electric utilities that operate all-fiber networks as a way of enhancing prospects for local economic development. n Educational institutions, students and individuals interested in learning more about all-fiber networks and their role in communities’ economic growth and competitiveness. n Industry and professional groups whose missions are enhanced by the availability of ultra-broadband networks. Our areas of focus include: n Building a legislative and regulatory framework for advancing FTTH deployments. n Educating policymakers and the public about the benefits of FTTH. n Sharing information and best practices concerning: ‑ Emerging optical access technologies and FTTH industry trends. ‑ All-fiber network design, operations and optimization. ‑ Fiber-to-the-home business planning and marketing strategies. ‑ Smart-grid and green technology evolution. ‑ High-bandwidth consumer applications, content and in-home networking. For more information, please consult the membership section of the FTTH Council website, www.ftthcouncil.org, or email [email protected].

FTTH Council | The Advantages of Optical Access |

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U

Fiber: The Light Fantastic

nlike copper cable, which carries low-voltage electrical signals, fiber optic cable carries information by transmitting pulses of light. The pulses are turned on and off very, very quickly. Multiple streams of information are carried on the same fiber at the same time by using multiple wavelengths – colors – of light. The pulses of light are usually created by lasers. (Some short-range fiber systems use LEDs.) The equipment that transmits signals keeps getting faster and cheaper, so the same old fiber can be used to carry ever more information. New equipment is just slipped in. Fiber has many advantages over copper wire or coaxial cable, as it is easier to maintain and delivers far more bandwidth. Three of the biggest advantages are these:

1

Signals travel long distances inside fiber cable without degradation – 50 miles or more in some real-world networks and 65 miles or more in the laboratory. By contrast, bandwidth decreases in copper wire or coax as the distance traveled increases. Short lengths of coax, for instance – the lengths typically found in a small building – can carry 1 Gbps if the coax network is well designed. That’s 500 times more bandwidth than typical broadband services using DSL over copper wire, and 200 times more than typical broadband over cable TV coax. But those speeds are impossible over longer distances. The closer fiber gets to a building, the shorter the copper loop and therefore the faster the service that can be made available to the building’s residents and businesses. Fiber all the way to the living unit can deliver virtually unlimited speeds.

2

Fiber cable is thin. Individual fibers can, in fact, be made thinner than a human hair. Thin fibers can be carried on a narrow ribbon or inside a microduct

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of hollow plastic typically less than 1/8 inch in diameter. One typical fiber cable configuration with about 200 superthin strands is about the thickness of a standard coax cable. That fiber cable could theoretically carry enough bandwidth to handle all

the information being sent on earth at any one time today. The bottom line: Fiber can be hidden easily on the surfaces of walls in old construction. It is also flexible and rugged. In 2007, many vendors introduced inexpensive fiber that is tough enough to be stapled to

Comparative Bitrate in Mbps, Downloads 18 16

FTTH

14

Cable Modem DSL

12 10 8 6 4 2 0 2007

2008

2009

2010

Comparative Bitrate in Mbps, Uploads 5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 2007

2008

2009

2010

Even in today’s deployments, which often do not exploit the full potential of fiber, FTTH has a sizable, and growing, downstream bitrate advantage over cable and DSL. The advantage of fiber is even more apparent on the upstream side – on average, FTTH connections have more than three times the upstream speed of cable or DSL connections. Source: RVA LLC. (DSL and cable data for 2007–8 not available.)

| The Advantages of Optical Access | FTTH Council

Average Number of Times Modem Rebooting Necessary Per Month Wireless

4.9

Cable Modem

3.4

FTTN

2.5 2.4

DSL 1.5

FTTH 0

1

2

3

4

5

6

Another measure of FTTH reliability: Customers report only about 1.5 reboots necessary per month – better than twice the reliability of cable. Source: RVA LLC.

walls by installers and flexible enough to be bent around sharp corners. Though such fiber had been available for years, in the past it had been difficult and expensive to manufacture. Optical fibers made of polymers (plastics) rather than glass are now starting to be deployed for indoor networks. These cables are easy to install and close to invisible.

3

common type of fiber network. They use a minimum of electronics. In fact, there are no electronics at all between

the provider’s central office and users. This improves network reliability and cuts deployment costs. But optical networks that do require electronics in the field have some advantages as well, especially when a network is built to carry content from multiple providers on the same fiber. Either way, the amount of power needed to run a fiber network is far less than that needed to run a coax or other copper network. This aids reliability and contributes to sustainability as well.

Very Satisfied with Specific Internet Aspects, FTTH Versus Cable Modem 43%

Provider’s customer service

58%

Once installed, fiber is up42% Consistency of speed 61% graded by changing the 52% Installation process 63% electronics that create and 46% receive the light pulses, not Broadband speed 64% by replacing the cable itself. Fiber ca49% Reliability – service uptime 69% ble deployed in the access network is considerably longer lived than copper. 0% 10% 20% 30% 40% 50% 60% 70% 80% It has a recommended depreciation life Telcos generally outperform cable operators on service, but telcos offering FTTH widen the gap even of 20 to 25 years, according to consultfurther. Source: RVA LLC. ing company Technology Futures Inc. in a study commissioned by several Most Important Advantages of FTTH Tier 1 telephone compaAs Reported by Customers nies. The actual physical life expectancy of fiber is 44.8% Speed/ faster/ better Internet/ bandwidth 20.2% Picture clarity/ video clarity even longer; its economic 15.8% Reliability/consistency/ no hassles life is limited by the pros10.7% Bundle of several services on one bill 9.8% Cost pect of competition.

4

Fiber networks are far less expensive to maintain and operate than copper networks. The fiber is amazingly reliable. Nothing hurts it except a physical cut or the destruction of the building it is in. Passive optical networks, or PONs, are the most

Quality Fewer weather disruptions Number of channels/ entertainment choice Better customer service General positives - pleased to have it DVR Convenience Other Better than previous cable company Video-on-demand/ movie downloads No satellite dish Better technology/ up to date Lines are buried/ not overhead Easy installation Can run two computers at once

5.8% 5.8% 5.4% 5.2% 3.0% 2.7% 2.5% 2.3% 1.4% 1.1% 1.0% 0.8% 0.6% 0.5% 0.5%

0%

5%

10% 15% 20% 25% 30% 35% 40% 45% 50%

Bandwidth and reliability were cited most often by customers as FTTH advantages. Source: RVA LLC FTTH Council | The Advantages of Optical Access |

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F

Telehealth: The Time is Now

iber’s bandwidth, reliability, safety and security have made it the technology of choice for in-hospital networks, and health care providers increasingly depend on fiber for exchanging huge image files and even for remote consultations and surgery. Until recently, regulatory requirements have limited the opportunities for using broadband to substitute live-at-home options for costly nursing home care. A recent study in Philadelphia, however, suggests that these savings are too large to ignore. Moreover, the situation studied could be copied by many local network providers under current regulations. NewCourtland, a senior services provider in Philadelphia, operates the LIFE program, modeled on the Medicare/Medicaid Program of All-Inclusive Care for the Elderly (PACE) initiative. PACE serves individuals who are

Housing with Technology saves medical costs Number of patients

33 in 26 housing units or rooms

Annual technology cost

$39,000

Annual home care cost

$249,600

Total nursing home cost avoided

$2,135,250

Annual savings

$1,846,650

age 55 or older, certified by their state to need nursing home care, able to live safely in the community at the time of enrollment and in a PACE service area. A total of 75 providers in 29 states have received Medicare and Medicaid waivers to operate PACE programs. Although all PACE participants are certified to need nursing home care, the program keeps 93 percent of participants living safely in the community. PACE providers deliver all needed

medical and supportive services, including adult day care, medical care, drugs, social services, medical specialists, and hospital and nursing home care when they become necessary. By employing remote monitoring technology, NewCourtland enabled 33 residents to move from traditional nursing home care, realizing an annual savings of more than $1.8 million. Essentially, the technology helped substitute a $125 per month technology

Become a CFHP!

Certified Fiber to the Home Professional Program The rapid growth in FTTH is creating significant demand for technical staff trained in FTTH technology and installation techniques. Many service providers are struggling to find enough trained staff. In response to this need, the FTTH Council has embarked on a training and certification program in cooperation with professional training organizations, educational institutions and other third-party training programs offered by major vendors and service providers. This program benefits the fiber industry and develops in-demand job skills for people dislocated during the current recession. Certification as a CFHP indicates a professional level of technical competence in fiber-to-the-home technologies. Certification requires demonstrating knowledge of and familiarity with FTTH architecture, network design, deployment technology and operational skills, not a specific vendor’s products. Candidates for CFHP certification include management and supervisory staff, technical support managers and administrators, design specialists, telephony and network engineers and administrators, and advanced network engineers and administrators. Individuals participating in or graduating from community and technical college programs in telecommunications can also be candidates even if they have little or no experience in telecommunications. The Council recommends participating in a training course before taking the certification exam. The current CFHP course consists of two days of classroom instruction and is structured to provide competence in overall FTTH theory, terminology, topology, equipment and system cost estimation.

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| The Advantages of Optical Access | FTTH Council

CFHP COURSE DATES for 2011 Dallas, TX (at the Broadband Summit) • April 28 - 29, 2011 Spartanburg, SC • June 1 - 2, 2011 St. Louis, MO • June 9 - 10, 2011 Seattle, WA • July 6 - 7, 2011 Minneapolis, MN • September 7 - 8, 2011 Orlando, FL (at the FTTH Conference) • September 26 - 27, 2011 Austin, TX • December 8 - 9, 2011 The first two-day CFHP training course has been developed by The Light Brigade with assistance from FTTH Council member companies and organizations. For more information, go to www.lightbrigade.com. After completing the course, candidates can take the online examination to confirm certification on the FTTH Council’s website. Those who successfully demonstrate knowledge of the course matter through this online examination by achieving a passing percentage of 80 percent or higher will receive the CFHP designation and a certification diploma valid for three years. The CFHP exam and certification fee is $150 for the three-year period. After that time, another exam will be required to maintain certification. For further information, please contact [email protected].

cost per person for $225 per day in nursing home costs, starting in 2008. Seven of the patients were in a group home, and 26 lived separately. Instead of staffing the patients’ homes with live-in help, NewCourtland installed a Healthsense eNeighbor system that includes sensors placed around the home, biometric devices as appropriate, medication dispensing, and a check-in button in each person’s home. A problem or unwarranted change brings a call from the monitoring center and, if necessary, a response from nearby staff. In a group home, there is one caregiver, supplemented with regular extra support mornings and evenings. “Keeping even one person out of

“Keeping even one person out of the hospital can pay for all systems for a PACE program for a year. The individuals we helped were motivated to leave a nursing home and move into the community, making an extra effort to participate in rehab.” the hospital can pay for all systems for a PACE program for a year,” said Jim Reilly, Director of Courtland Health Technology. “And more important, the individuals we helped were motivated to leave a nursing home and move into the community, making the extra effort to participate in rehab.”

Inside the patient’s living unit, all the equipment is connected by Wi-Fi to a network gateway. Fiber providers, whose networks rarely suffer outages that require on-premises gateway resets, have a huge advantage over DSL or cable providers in supporting programs like this one.

FTTH Aids Sustainability

F

or service providers concerned about the impact of their networks on the environment, there’s good news about fiber. The environmental impact of FTTH is more positive than that of traditional copper networks, according to a PricewaterhouseCoopers study commissioned by the FTTH Council and released in October 2008. Even with conservative assumptions about take rates, the greenhouse gases produced in manufacturing equipment and deploying networks are far lower for fiber than for copper networks and are outweighed in about five years by the savings from increased telecommuting alone. Telecommuting saves more than triple the amount of greenhouse gases released by powering the network. That’s an annual carbon-reduction dividend of close to 20 percent. Other environmental impacts are recouped with fiber in time periods ranging

from one to six years, according to the report, which examined an “average” American FTTH deployment. The impact of any actual network would be slightly different from the typical case that was studied. Earlier studies have shown smaller annual savings, but almost all studies show a positive impact. Savings on gasoline (both for commutes avoided and for commuters who now enjoy less congestion on the highways) are partially offset by extra electricity use at home and by the power used to run the networks. Savings are likely to increase in the future as the uses of broadband networks expand. For example, PricewaterhouseCoopers did not consider other energy-saving applications, such as: • Telepresence, which is beginning to replace a significant amount of business travel; • Cloud computing, which enables

data centers to be located near sources of renewable energy; • Smart-grid applications, which make electricity generation and distribution far more efficient; or • Distance learning, which reduces travel for educational purposes. About three-quarters of greenhouse gas emissions in the network life cycle come from the manufacture of active network equipment, Pricewaterhouse Coopers found. The researchers also examined how FTTH deployment affected such environmental issues as resource depletion, air acidification, algae growth in the oceans and the release of toxins into the environment. By every measure, FTTH had a beneficial environmental impact. A more complete presentation of the report’s results can be found at http://www. ftthcouncil.org/en/knowledge-center/ documents-of-interest-to/ftth-equipment-vendor/environmental-benefits-of-ftth-deplo.

FTTH Council | The Advantages of Optical Access |

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Builders, Real Estate Developers and FTTH

V

irtually all large developers of single-family homes and many developers of multifamily communities add FTTH to new properties. Many are working on retrofitting older properties as well. Retrofit work has expanded as new-home sales have fallen in the recession. Before the housing boom ended, Michael Render of RVA LLC estimated, on the basis of surveying home buyers and developers, that FTTH added about $5,000 to the price of a home. The size of the increase is less certain now, but it is clear that FTTH homes sell faster. By mid-2006, FTTH was economically viable in new developments with as few as 80 MDU living units or 100 single-family homes. That number has

continued to fall due to improvements in deployment technology. As fiber and fiber deployment costs have fallen

and copper costs have increased, fiber has achieved cost parity with copper in most new construction.

Source: RVA LLC

FTTH Homes Passed, March 2011 (Cumulative, North America) 20,914,476

21,000,000 18,249,900

19,966,200

17,227,000 16,000,000 11,763,000

15,170,900 13,825,000

11,000,000 8,003,000 6,000,000 3,625,000 35,700 1,000,000

19,400

110,000 72,100

180,300

189,000

9,552,300

6,099,000 4,089,000

2,696,846 970,000 1,619,500

Sep-01 Mar-02 Sep-02 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 -4,000,000

Source: RVA LLC

For single-family homes, customer-premises equipment is typically located outdoors.

Major Categories of Fiber-to-the-Home Deployers And Take Rates, Winter 2010 Developer With Competitive Overbuilder

85.5%

Incumbent Rural Telephone Company

58.0%

Competitive Overbuilder (Rural or Suburban)

44.0%

Municipality or Public Utility District Acting as Retail Provider Competitive Overbuilder (Urban) Regional Bell Operating Company (within MSA) Municipality or Public Utility District Acting as Wholesaler

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FTTH is now available to almost one out of five American homes. In the six months between September 2010 and March 2011, an additional 948,000 homes were passed by fiber despite the recession and the worst winter weather in a decade. That’s below the previous 6 months but in line with the same period a year earlier.

42.0% 32.0% 30.0% 25.0%

| The Advantages of Optical Access | FTTH Council

Source: RVA LLC

FTTH Homes Marketed, March 2011 (Cumulative, North America) 19,344,791

20,000,000

18,167,300

18,000,000

16,992,600

16,000,000 12,369,000

12,000,000

10,082,065

10,000,000

7,996,400

8,000,000

6,643,000 5,079,999

6,000,000

3,218,600

0

22 3,

00

0

9,

30

00

00

00 ,7

00 ,4

0

1

4,000,000 2,000,000

16,048,500

13,875,600

14,000,000

41

18

0,

0,

18

11

72

19

35

,1

1,754,300 829,700 0 Sep-01 Mar-02Sep-02 Mar-03Sep-03 Mar-04Sep-04 Mar-05Sep-05 Mar-06Sep-06 Mar-07Sep-07 Mar-08Sep-08 Mar-09Sep-09 Mar-10Sep-10 Mar-11 Source: RVA LLC

The number of homes marketed for FTTH rose by almost 1.2 million from September 2010 to March 2011, a gain slightly above the previous six months and well above the year-earlier period. The latest six-month increase was far below the 2.2 million record logged for March 2009 to September 2009, but it shows a clear turnaround.

There is a wide range of devices for placing fiber underground.

FTTH Homes Connected, March 2011 (Cumulative, North America) 7,094,800 6,452,300 5,804,800 5,275,000 4,422,000

3,760,000

2, 70 54 0 8, 00 0

00

2,142,000

1,478,597

1,011,000 671,000

31

3, 21

50 6, 14

00 78

,0

00 ,7

00 ,0 38

64

00 ,5 22

50 ,3

50

10

0

0

0

2,912,500

5,

7,500,000 7,000,000 6,500,000 6,000,000 5,500,000 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 -

Sep-01 Mar-02 Sep-02 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Source: RVA LLC

FTTH connections are rising. The number of homes connected rose by 647,500 from September 2010 to March 2011, faster than in the same period a year ago, while the ratio of homes connected to homes passed remained steady at a record 32 percent, up from 29 percent two years ago. The number of new connections, 647,500, is higher than the total of 529,800 a year earlier but well below the record 853,000 of March 2009 to September 2009.

Percent of US Households Passed and Connected to FTTH, 2006 - 2011 (RVA LLC data) 20%

17.3%

18% 16%

Passed

14%

Connected

15.1% 13.0% 11.9%

12% 9.9%

10% 8%

4.6%

3.5%

2% 0%

8.1%

6.8% 5.3%

6% 4%

18.2%

15.7%

0.6%

Mar-06

0.9% Sep-06

1.3% Mar-07

1.8%

Sep-07

2.5%

Mar-08

3.2%

Sep-08

5.0%

5.6%

6.2%

3.8%

Mar-09

Sep-09

Mar-10

Aug-10

Feb-11

More than 18 percent of all homes in the U.S. were passed by fiber by March 2011, making FTTH technology a major player in broadband and video services. More than 6 percent of all U.S. households were actually connected to FTTH. FTTH Council | The Advantages of Optical Access |

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Questions Real Estate Developers Ask About FTTH Q: How can I justify adding to the price of a home in a weak market? A: The data are clear: Homes sell for higher prices when they are wired for high bandwidth and provide access to fiber. What’s more, FTTH homes sell faster than non-FTTH homes in the same market. In good times, this may translate into a greater profit, but it’s even more important in bad times. If few homes are being sold, you can bet that homes with high-bandwidth amenities will sell faster. This is equally true for rental properties: Developers of multiple-dwelling unit communities say their new buildings lease up faster if they can advertise them as fiber-connected. Q: Do I need to hire an engineering firm to design the installation? A: Fiber does need to be engineered in large apartment complexes – that’s true for coax, too. But smaller installations, as with smaller corporate LANs, do not need that kind of sophistication to work well. Greater standardization, clever new systems from equipment vendors, fiber that can be stapled and bent tightly around corners, the growth of distributor-supplied design help

Likelihood of Adding FTTH Lines, Current Non-RBOC FTTH Providers 70%

Very likely 15%

Somewhat likely 2%

Somewhat unlikely

9%

Very unlikely 0%

10%

20%

and an expanding corps of qualified technicians have made lessformal design regimes feasible in the last few years. Q: Do I have to worry about other labor on my construction site damaging the fiber cable? A: Optical fiber is very, very thin – thinner than a human hair. But fiber vendors have developed many techniques to protect the fibers from harm. Cable can be armored to ward off cuts. Contractors can route inexpensive microduct – hollow plastic tubes typically threeeighths of an inch in diam-

Fiber can now be bent tightly around corners.

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4%

All customers have FTTH

| The Advantages of Optical Access | FTTH Council

30%

40%

50%

60%

70% 80% Source: RVA LLC

eter – through walls before the walls are closed in with drywall or other materials. The microducts are easily repairable. After everything else is done, thin fiber can be “blown” through the microduct for hundreds of feet. New fiber can be bent almost like copper. Some vendors offer fiber in thin adhesive tape that can be rolled onto walls. Q: Do any building codes pertain to fiber? The stuff seems inert. A: Yes, all the regular fire and lifesafety issues apply. For instance, just as copper with PVC sheathing

Thinner, more bend-tole rant fiber also allows mo re compact fittings, like this box. That makes installation easier in old er structures.

Components of a Fiber-to-the-Home Network Most of the devices in FTTH networks convert electrical signals that travel along wires to pulses of light that travel on fiber, and back again. Let’s start at the beginning of a fiber network.

Fiber networks are easy to test; the testing device often pinpoints the exact location of a problem.

would be considered a life-safety hazard because of the combustion products released when it burns, so would various plastics used in fiber that is meant for outside installation. Indoors, look for Low Smoke Zero Halogen (LSZH) cables. If you are using thin plastic microduct that fiber can later be blown through, it should be labeled Halogen-Free Flame Retardant. You use a simple junction box to change from “outside” to “inside” wiring, just as you might with electrical cables. Of course, you should check with your local building code inspector. Aside from fire issues, codes may govern where fiber optical network terminals (ONTs – the boxes that convert pulses of light from the fiber into electrical signals for the computer or TV) may be placed on the outside walls or in common areas. A few municipalities specify where in the home the network connections should be placed. Q: Where should we put users’ network connections, assuming there is no specific building code or guidance document covering that subject? A: You should expect users to desire broadband connections in virtually any room in the house – bedrooms, office-dens, the kitchen. That’s because Internet connections these days accommodate telephones, televisions, set-top boxes, digital picture frames, security sensors, fire and smoke monitors and, of course, computers. As the “Internet of things” develops, more and more appliances will be Internet-enabled. Because portable consumer electronics devices, such as smartphones and tablets, in addition to appliances, increasingly communicate with the Internet via Wi-Fi (appliance manufacturers have now adopted a standard for building Wi-Fi into major appliances), you will also need a wireless gateway. Such gateways are offered by all vendors as standard-issue, to be used on the home side of fiber network deployments.

OLT stands for optical line terminal. The OLT puts the pulses on the fiber in the first place. Because most of them are located in telephone exchanges and other network central offices, residents and property owners rarely see them. ONTs are optical network terminals. These are the devices at the consumer end that turn light pulses back into electrical signals. They are sometimes called ONUs, for optical network units. In networks built by cable companies they may be called micronodes. Customer devices, such as computers, usually expect Ethernet – a standard networking technology. Your computers and home wireless system use Ethernet and probably have Ethernet connectors built in. A typical ONT turns the light pulses into Ethernet signals. In the United States, ONTs are typically placed in cigar-box sized enclosures on the outside walls of houses or apartments. But they can be made smaller than a deck of cards and can be placed inside customer premises as well. Fiber Connectivity You’ll also hear about the point of presence, or POP. That’s the point at which the signals from multiple customers join the rest of the extended network. Pedestals and larger fiber distribution hubs are enclosures. They can hold beam splitters that take the signal from a single fiber and divide it (typically between 8:1 and 32:1 but as much as 128:1) among fibers that go to individual dwelling units. Pedestals and hubs can be below ground, above ground (they often look like short posts or squat, airconditioner-size boxes) or attached to buildings. Connections and splits can also be made in boxes that are hung under roof eaves, in attics or basements, on telephone poles, or on what look like power lines or phone lines. For best reliability, many contractors bring two fibers into each dwelling unit from the pedestal. The fiber leading from a hub or pedestal to a user’s premises is called the drop cable.

FTTH Council | The Advantages of Optical Access |

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Q: In single-family homes, I often see ONT boxes hung on the outside walls. Can they also be placed indoors? A: Yes. In harsh climates, where heat or heavy snow could affect the outside installation, you will probably want to put ONTs indoors. Outdoor ONT models are sometimes placed in garages or utility rooms; you can also buy small, portable indoor models that are more like cable or DSL modems, and connect them

Modular ONT can be customer-installed.

with tough, flexible fiber that can be laid anywhere. Indoor ONTs,

which are popular with apartment dwellers, can be designed to be user-installed. Q: Why do ONTs require backup batteries? A: Optical fiber cannot conduct electricity. Thus, to keep a network connection running during a power outage, you need a battery at the user premises or a fiber cable that includes a thin copper conductor connected to an off-site battery. This requirement may change as cellular phones replace landlines – a change that has already taken place in most of Europe. In North America, where most customers still have landlines, many standard designs are available for in-wall, between-stud boxes that hold the battery, ONT and fiber connections. Q: Does every dwelling unit or office need its own ONT located at the unit? A: No. Separate ONTs for each unit in a multiple-dwelling-unit building can be located centrally, often in a basement or an equipment cabinet. There are also ONTs designed to serve multiple units, typically 4 or 8. This flexibility is made possible by new, smaller, low-power circuitry and by the fact that some ONTs can deliver 1 Gbps or more – enough bandwidth to share among multiple customers.

Pathways for structured wiring can be created before walls are finished.

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| The Advantages of Optical Access | FTTH Council

Q: Is lightning a problem with fiber? A: No. In fact, because fiber does not conduct electricity, lightning strikes do not affect fiber at all.

Beating the Recession with Fiber: Three Case Studies coming terrestrial phone service plus 911 over traditional phone lines. It is the first fiber-to-the-unit MDU in the Lexington market. Although Ball Homes thought an optional amenity would be more palatable during tight times, Windstream saw nearly a 100 percent take rate from residents who moved into the first phase of the project, and occupancy was 75 percent after nine months. Why? 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,” says Brandon Buffin, Ball Homes’ IT director. “It’s been quite a positive.”

MDU in Lexington, KY When 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. After negotiating a bulk subscription deal for residents, Windstream deployed a GPON fiber-to-the-unit network at the community to light up a triple-play offering of voice, video and data, including dedicated 911 connectivity. Now,

for $89 a month, residents can enjoy a take-if-you-want base programming package that includes 12 Mbps data speeds; 60 channels of DISH Network programming, including HBO; and in-

MGM CityCenter Las Vegas Imagine that you’ve just arrived at a hotel. As you walk into your room, a bellhop greets you by name, switches on the lights, puts some music on the stereo and draws the curtains to reveal a spectacular view. The bellhop asks you for precise instructions about how you would like the room to be lit, heated

FTTH Council | The Advantages of Optical Access |

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and shaded; what your tastes are in music and video; what time you would like to wake up – and, by the way, can we send up anything for dinner? Now imagine that all these things happen as if by magic, with no hotel employee in sight. Guests at the ARIA Resort and Casino and the Mandarin Oriental, the two hotels in Las Vegas’ new CityCenter, are treated to this kind of personalized automation based on technology from Control4. CityCenter, a joint venture between MGM Resorts International and Dubai’s Infinity World Development Corp. is a 67-acre complex on the Las Vegas Strip that is still under development. CityCenter is billed as the world’s largest private green development, with all its buildings receiving LEED Gold certification. Guests can use remote controls and bedside panels to control their environments and save their chosen settings. They can select scenes such as “good night,” which turns off the lights and TV, shuts the curtains and turns on privacy notification. Wake-up scenes awaken guests in a “subtle and more soothing way” by gradually changing temperature, lighting, curtain opening and music volume. Televisions in guest rooms also serve as giant computer monitors; as screens for game consoles, cameras and MP3 players; and as communications centers that display everything from voice mails to package deliveries. Because all the devices in the room communicate automatically with the hotel system, guests don’t have to complain about the remote’s needing new batteries or the mini bar’s needing replenishment. The system does the complaining for them before the guests become aware that anything is lacking. Of course, it goes without saying that CityCenter guests have access to plenty of wireless Internet bandwidth and to many HD TV channels. The resulting solution not only provides a “Wow!” experience for guests but also

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helps the hotels reduce energy costs and improve their operations (and, of course, call attention to their green status). Probably the biggest saving comes from being able to easily change climate-control settings, close the shades and turn off the lights in unoccupied rooms. CityCenter’s room automation is supported by an extremely robust IP infrastructure. MGM Resorts ran fiber to every guest room with 1 Gbps bandwidth. The network was designed to minimize the number of communications closets on guest floors, leaving more space for guest rooms. CityCenter distributes voice, video and data over the IP network, and its internal building systems use the same network for communications. MGM Resorts expects the infrastructure to have plenty of capacity for additional applications for many years to come. In the CityCenter room-automation system, as in Control4’ s residential solutions, ZigBee sensors attached to devices such as light switches, dimmers and keypads communicate wire-

| The Advantages of Optical Access | FTTH Council

lessly with a Control4 control unit in each guest room. The control units, in turn, communicate over the fiber network with a centralized server, which enables building staff to manage the entire system remotely. Control4 now has more than 10,000 guest rooms deployed. It estimates that, depending on a hotel’s location, its energy efficiency and how it implements the Control4 solution, the payback period is between two and five years. Focusing on energy management alone, the payback is less than two years. Control4 has generalized the hospitality solution for use in other types of multifamily communities, such as condominiums and traditional neighborhood developments, where developers want to use technology for both lifestyle enhancement and sustainability. Sacramento Rental For Trammell Crow’s Steve Hester, just getting the Alexan Midtown project up and running was a Herculean task. In 2007, while his team was planning

FTTH Versus Other Types of Fiber Networks the 275-unit mid-rise on the edge of Sacramento’s hip Midtown area, the wheels started coming off capital market financing. Originally, Trammell Crow had envisioned the project as a condominium whose units would be marketed to young professionals working in Sacramento’s health and government sectors, but it had to modify that plan quickly as lenders began to balk. The company thought the project still made sense as a rental. The site is located in Sacramento’s “medical triangle,” within easy biking distance of three major hospitals, including the UC Davis Medical Center, and just a few minutes from the California State Capitol and myriad state government offices and agencies. There was only one catch: Given Sacramento’s starring role in the housing debacle, with the area routinely ranking near the top of foreclosure statistics nationally, the rental market was flooded with houses that otherwise would have been for sale. That, in turn, put pressure on apartment rents. For the Alexan Midtown to compete, it would need to offer residents more for their money, including state-of-the-art technology that would appeal to the young medical and government professionals that were still its target market. That was especially true because of the Midtown price point – studios were advertised for just under $1,400 a month, more than double the rent of other entry-level digs in the area. One differentiator materialized by chance. Because the aesthetics of the project called for existing overhead cables to be buried underground, Hester got to work contacting the owners of those cables. One happened to be Roseville, Calif.-based SureWest, an independent ILEC that has been aggressively rolling out IP-based services in Northern California. SureWest started offering IP-based HDTV as early as 2006 in the greater Sacramento area and already had a fiber ring running right past the Alexan site. “I’ve been doing this for 30 years, and that almost never happens, where there’s actually existing fiber fronting the property,” Hester says. “If it does happen, you usually can’t tap into it because it’s for 911 or a hospital or someone else’s dedicated use. But in this case, we had SureWest right there, and they were only too happy to serve the property.” Because the property already had fiber running literally to its door, the developer decided to make an investment for the future and take the fiber path all the way to all units. Now, residents can choose data speeds up to 50 Mbps. “Oftentimes, people talk about having a fiber network. But I think … that term has gotten watered down, just as the term ‘organic’ has been overused in the food industry. Nobody knows what it means anymore,” Hester says. “But at the Alexan, we have the real deal. This is a pure fiber system. As far as we can tell, no one else in the market can say that.” The project has been a success for SureWest, which has signed up 55 percent of the project’s tenants. And it has been a success for Trammel-Crow as well.

In 2006, the FTTH Councils for Europe, Asia and North America standardized the definitions for fiber to the home and fiber to the building (also called fiber to the basement). They are: Fiber to the Home (FTTH) A fiber optic communications path that extends from an operator’s switching equipment to at least the boundary of a home living space or business office space. The definition excludes architectures in which the optical fiber terminates before reaching either a home living space or business office space and the access path continues over a physical medium other than optical fiber. Fiber to the Building (FTTB) A fiber optic communications path that extends from an operator’s switching equipment to at least the boundary of a private property enclosing homes or businesses. The optical fiber terminates before reaching home living spaces or business office spaces. The access path then continues over another access medium – such as copper or wireless – to subscribers. Other definitions are not standardized but are commonly used by people in the industry: Fiber to the Node or Fiber to the Neighborhood (FTTN) FTTN is not defined by the FTTH Councils. In general, it refers to a system in which fiber is extended to a streetside or on-pole cabinet within 1,000 to 5,000 feet of the average user. From there, copper or wireless serves users, typically through a variant of DSL (Digital Subscriber Line). FTTN should not be confused with hybrid fibercoax (HFC), an architecture used mainly by cable companies to implement DOCSIS, the standard that allows data to be transmitted over cable TV systems. In a typical HFC system, fiber runs to each DOCSIS node and coaxial cable running from the node serves between 100 and 500 users. Nor should FTTN be confused with RFoG, an FTTH technology that uses the signal protocols developed for DOCSIS. With RFoG, each user gets its own DOCSIS micronode. Fiber to the Curb (FTTC) Similar to FTTN, except that the fiber is brought much closer to user premises – typically closer than 1,000 feet and often closer than 300 feet. FTTC installations may use either VDSL or Ethernet (over copper cable or wireless) to bring the signal from the fiber termination point to the user. Point-to-point wireless is sometimes (and rarely) used in rural areas simply to bring a signal from the roadway to a home that could be a mile or more away.

FTTH Council | The Advantages of Optical Access |

23

B

Focus on Municipal Priorities

y the end of 2011, the economic stimulus program will have increased the number of municipal fiber networks to nearly 100 and expanded several existing networks. The business case for others has improved thanks to “middle mile”

fiber also funded by the stimulus. And then there is Google’s plan for partnering with municipalities on 1 Gbps fiber, starting in Kansas City, Kan. All this activity has made municipal officials keenly aware of the potential for using ultra-broadband to promote

economic development and enhance the quality of life in their communities. But they still need answers to many questions, for example about technology choices and private-sector partnerships.

Key Questions Municipal Officials Ask Q: How can I determine whether my community is underserved? Residents complain about lack of bandwidth, and real estate agents say property values are suffering, but most residents have some broadband access and the incumbent operators plan to upgrade in a few years to DOCSIS 3.0 and fiber to the node. A: It sounds as though these upgrades will be installed just as broadband needs will increase beyond what DOCSIS can easily deliver and what FTTN can deliver at all. Be sure to take the needs of the business community into consideration in addition to those of residents. Many economic development officials believe 1 Gbps access is needed to lure new businesses to a town. Also, the Commerce Department’s national map of broadband accessibility says DOCSIS 3.0 upgrades are possible for only 82 percent of the nation’s homes, at most. The shortfalls tend to be in smaller communities. Q: Can a fiber network help bring new business into my community? A: There’s quite a bit of evidence that fiber connectivity encourages businesses to stay, allows them to grow and attracts new businesses, particularly in high-tech industries. FTTH also facilitates home-based start-up businesses. Of course, it’s

24

only one component of an overall economic development strategy.

in your town may have prioritized other service areas that offer them more geographical or demographic advantages. Or, they may not have access to the capital needed upfront to expand their services.

Q: Don’t DOCSIS 3.0 and FTTN both use fiber? A: They use fiber, but usually not all the way to the home. The last 1,000 to 5,000 feet from the fiber’s endpoint to the home is copper – coaxial cable in the case of DOCSIS, plain copper wire for FTTN. That limits bandwidth, reliability and versatility. However, you should check with the cable company to find out whether its DOCSIS 3.0 upgrade will make use of one of the new FTTH transitional technologies – RFoG (for Radio Frequency, or RF, over Glass) or DPoE (for DOCSIS Provisioning of EPON). These standards are more compatible with existing cable networks than “conventional” FTTH but can bring fiber directly to the premises, so they are gaining interest from cable companies. They can eventually be converted to conventional FTTH, too.

Q: The telephone company that operates here is installing FTTH in the new development just 10 miles up the road. Why not here? A: It is usually easier to install fiber in new developments than in existing ones. The fiber goes into the same trenches that have to be dug anyway for water, electricity and sewer service. In fact, copper wiring usually can’t be run that way, so fiber is usually cheaper. Also, the new residents are not already tied to a cable or phone provider, so whoever installs a FTTH network in a new community has an easier time signing up customers. That’s why most new, large housing developments are being equipped with fiber.

Q: My town’s residents are just like others in the region, and maybe have even slightly higher incomes. Why don’t the phone and cable companies consider them attractive customers for FTTH? A: Many cable companies, telephone companies and independent broadband providers are now installing FTTH. But the companies operating

Q: Would installing fiber require that my streets be dug up? A: It depends. Many network builders in North America use aerial fiber installed on poles along with existing telephone, electric and cable wiring. Where trenching is impractical, contractors can often use horizontal drilling or pull fiber through existing ducts, water pipes, sewers

| The Advantages of Optical Access | FTTH Council

and gas lines rather than digging up streets and sidewalks. In addition, many cities already have usable fiber under their streets – fiber that is not being used to its limit. Finally, when there is no good alternative to trenching, new microtrenching techniques may allow it to be done with less disruption to traffic. A deep groove is cut quickly into the pavement with a large circular saw on wheels, and fiber is laid into the groove. Q: What might I do to get fiber to my residents without building my own network? My town has too much debt now to borrow more, and we have no experience operating a municipal utility. A: You might try lobbying the incumbents – the cable and telephone companies serving your town now. You could offer such incentives as a reduced franchise fee, access to public property or an accelerated permitting process. If you own an institutional fiber ring connecting municipal buildings, schools

Distribution box for fiber lashed to existing aerial cable; this method is quick and inexpensive.

and libraries, you might be able to propose “fiber swaps.” In addition, some communities launch educational campaigns about the value of FTTH and encourage residents to commit to taking fiber services if and when a provider offers them. You might also invite outside companies to consider bringing FTTH to your residents and offer the same kinds of incentives described above. Or you could enter into a public-private partnership to build a fiber network jointly with a private partner. In Europe, such partnerships are common, especially for large projects such as those bringing fiber to all homes in Amsterdam and Vienna.

In the last few years, this approach has begun to gain traction in the United States, with a variety of different arrangements between the public and private parties being used. In fact, when Google proposed in 2010 to build an FTTH network in one or more American communities, more than 1,100 communities responded with proposals for how they could work together with the company. Q: Is it better for the same company to run the network and provide services, or should we consider an open-access network with multiple providers? A: There is no clear answer. Openaccess networks, where the network builder (either a municipal or a private entity) “rents” bandwidth to a potentially unlimited number of content providers, are more common in Europe and Asia than in the United States. But they have worked here as well. At present, open-access networks in the United States tend to be either

Pulaski Electric System, a municipal electric utility in Pulaski, Tenn., uses its FTTH network to operate a smart electric grid and deliver triple-play services to residents.

FTTH Council | The Advantages of Optical Access |

25

municipal networks or networks built by companies that specialize in bringing fiber to new buildings and subdivisions. Municipal utilities sometimes prefer to provide services directly, at least at the outset, for two reasons: First, it gives them more control over the quality of user experience on their networks, and second, they may have difficulty attracting third-party service providers to start-up networks. The downside of a closed network, however, is that there is less variety in content and services. Many public broadband advocates believe that opening networks to innovative service providers is the best way to maximize the networks’ value for their communities. Networks built with broadband stimulus funds must allow open access. Q: What about Wi-Fi or WiMAX? The FCC’s National Broadband Plan calls for wireless in remote

OECD data for 1996-2007 analyzed by Raul L. Katz and Javier Avila, Columbia Institute for Tele-Information, for a 2010 paper

areas. Isn’t that a good substitute for fiber? A: Wi-Fi, WiMAX and cellular service are important public amenities, but they are not substitutes or replacements for FTTH. Rather, they complement and extend fixed fiber networks. In fact, given that many wireless access points and cell sites are now fiber-connected – and that most of them will be soon – wireless service can be considered an ap-

In general, no one has been able to develop a compelling business case for a municipalitywide Wi-Fi network. However, Wi-Fi in targeted areas such as commercial shopping streets may be worth considering. In addition, many multifamily community owners find that community wireless, as an adjunct to wireline broadband, is a valuable amenity.

Though new wireless technologies have made possible all kinds of exciting services, wireless access alone cannot attract new businesses.

Prefabricated pedestals a few feet high are unobtrusive and hold fiber distribution points. Some models can be entirely buried.

26

plication on a fiber network rather than a separate type of network. Though new, high-bandwidth wireless technologies have made possible all kinds of exciting consumer and business services, wireless access alone cannot attract new businesses to a community or enable businesses to grow. Wireless networks that cover wide areas are not reliable enough to deliver video and other emerging broadband services with high quality of service.

| The Advantages of Optical Access | FTTH Council

Q: Where can I go to find out more? A: The FTTH Council, www.ftth council.org, has quarterly meetings and monthly webinars. Broadband Properties’ municipal portal, www. munibroadband.com, can direct you to a number of additional resources. The magazine also maintains a database on its website, www.bbpmag.com, that shows all FTTH deployments by municipalities and others, including small telephone companies.

FTTH Generates Jobs

S

even hundred thousand FTTH subscribers operated home-based businesses in 2010, and they added $41.6 billion to the U.S. economy in the 12 months ending August 2010. That number, calculated by market researcher Michael Render of RVA, is a conservative estimate. To place this figure in context, 700,000 jobs is more than the entire U.S. economy created in 2010! FTTH access is correlated strongly with establishment of a home business, according to Render’s data. Doubling the download bitrate of broadband services adds 0.5 per-

cent to the number of broadband customers with a home business. Small businesses also depend on broadband reliability and on upload speed – both areas where fiber vastly outpaces other broadband technologies. Some of this business revenue, of course, would have existed even if the business owners had no fiber access. But Render attributes nearly $10 billion of the $41 billion directly to fiber, because some of his survey respondents said their businesses would not even be possible without fiber and others said fiber made their businesses more efficient.

Correlation of % who have done telework with Download/Upload speed (Mbps) 50% 45% 40%

FTTH access is strongly correlated with working at home, in RVA LLC customer survey data from spring 2010.

FTTH Cable Modem

35% 30% DSL

25% 20% 0

1

2

3

4

5

6

7

Correlation of % who have a home-based business with Download/Upload speed (Mbps) 17.2% 17.0%

FTTH access is correlated strongly with establishment of a home business, in the RVA LLC data. Doubling the bitrate adds a half percent to the number of customers with a home business.

16.8%

FTTH

16.6% Cable Modem

16.4% 16.2% 16.0% DSL

15.8% 15.6% 0

1

2

3

2010 Research Shows 9% of FTTH Homes Report Home-Based Business Only Possible or More Efficient Due to FTTH 7%

2008

13%

2009

4

5

6

7

Home-based businesses are clearly facilitated by fiber; 9 percent of FTTH customers in spring 2010 claimed that fiber made their home business possible or more efficient. Source: RVA LLC.

9%

2010 0%

2%

4%

6%

8%

10%

12%

14%

FTTH Council | The Advantages of Optical Access |

27

FTTH Success Stories

T

he reliability, bandwidth and future-proofing of fiber to the premises creates new jobs and preserves old ones. Some examples: Auburn, Ind. In 2005, Cooper Industries, a Fortune 200 company whose global data operations were located in Auburn, was at a crossroads – it had to either expand its Auburn facility or relocate. The company’s most critical requirement was for fast, resilient and reliable broadband. Auburn Essential Services, a municipal broadband provider, worked with Cooper to craft a business-class broadband service and thereby preserve $7 million in annual payroll for the community. In addition, the city has retained a number of Internet-dependent, small but growing businesses. Bristol, Tenn. The Bristol Herald Courier’s new printing production facility features a stateof-the-art printing press – the first of its kind in the country. Owned by Media General and built by BurWil Construction Company, the $21 million facility has 50,000 square feet that is dedicated to producing and distributing seven Southwest Virginia newspapers. Jim Hyatt, Media General’s regional vice president and publisher, said the highspeed data transfer and reliable fiber optics were the main reasons for locating the facility in Bristol. More examples from Bristol, Tenn., are available at www.btes.net/btestestimonials.html. Bristol, Va. BVU OptiNet has fundamentally changed the economic face of Southwest Virginia. Thanks to grants from the U.S. Department of Commerce and the Virginia Tobacco Indemnification and Community Revitalization Commission, businesses in seven rural counties in Southwest Virginia now have access to broadband speeds of up to 1 Gbps and transparent LAN service, which vastly improves their communications and networking capabilities. High-tech companies Northrop

28

Grumman and CGI have both built major facilities in Russell County, and two new industrial parks are currently under construction in Buchanan and Tazewell counties. By 2008, the high-tech infrastructure had already brought 1,220 new jobs to Southwest Virginia, with more than $50 million in new private investment and $37 million in annual payrolls. Growth has continued through the recession. Another significant benefit is that small health clinics in isolated locations of Southwest Virginia can now be digitally linked to larger comprehensive hospitals. The University of Virginia at Wise launched the state’s first undergraduate software engineering program due to partnerships with Northrop Grumman and CGI. In addition, the town of Lebanon turned a former shopping center into the Virginia Technology Development Center, a new high-tech training facility to be managed by the University of Virginia at Wise. LENOWISCO Planning District Commission, Va. and Ky. More from Southwest Virginia: Several business were able to stay or expand in the region because of broadband, including both home-based businesses and larger ones such as Crutchfield Electronics. New businesses that located in the area because of the broadband network include OnePartner, an advanced technology and application center and the only

It is easy to find ducts for fiber.

| The Advantages of Optical Access | FTTH Council

commercial Tier 3 data center in the United States. Holston Medical Group stores its electronic medical records at OnePartner’s data center, taking advantage of the data center’s capacity and connectivity to run virtual clinical trials. Altogether, the network attracted an estimated $50 million in corporate investments in the region and created 1,200 jobs even as the recession deepened. Residential customers are using broadband to better their lives in this economically depressed area as well. In a survey of its most recent 271 customers, 29 percent said they used their new broadband service either for distance learning – to earn degrees that would make them eligible for better-paying jobs – or in home-based businesses. These work-from-home employees and owners of cottage industries represent a wide range of businesses, such as an interior designer using broadband to search for design inspirations, agents managing health insurance programs for a national health insurance company, a person managing orders for a national floral service over the Internet and a toolmaker selling wedges for leveling mobile homes. Macon and Lebanon, MO. Shane Mayes, CEO, describes his Onshore Technology Services as a rural outsourcing company. It provides software development and integration and other technology services in an outsourced fashion in competition with vendors in India, China, Mexico, Russia and Brazil. His company opened in 2005 and has employees around the state. Mayes said he chose Macon and Lebanon for his offices because those cities had already run fiber to every business and household in their area His company would only open offices in communities with access to highspeed Internet, Mayes said. Chelan County, Wa. Yahoo picked Wenatchee for a data center site. Said Kevin Timmons, Yahoo’s vice president of operations, “We

Recent advances in deployment technology have made installing fiber in multiple-dwelling-unit properties quick and inexpensive.

chose North Central Washington for this important facility because of the great quality of life here, the immediate availability of suitable space, the ‘can-do’ spirit of port and other community leaders we’ve met, the cost and reliability of electricity, and the access to a world-class fiber optic network. They’ve taken all the right steps to create a terrific environment for us.” Cody, Powell and ten sleep, Wyo. Eleutian partners with CDI Holdings of South Korea, a market leader in English education, to teach conversational English to South Korean students via high-speed videoconferencing. Headquartered in rural Ten Sleep, Wyo., Eleutian Technology operates nine teaching centers throughout the Western United States, including in FTTH communities Cody and Powell. They are open for business 24 hours a day, seven days a week. It’s the largest new job creator in the region. Said President Barack Obama in January, “In Ten Sleep, Wyo., a town of about 300 people, a fiber-optic network allowed a company to employ several hundred teachers who teach English to students in Asia over the Internet, 24 hours a day. You’ve all heard about outsourcing. Well, this is what we call ‘insourcing,’ where overseas work is done right here in America.” Rob Duncan, COO of Alpine Access, a provider of contact center services that uses home-based agents, opened

a virtual call center in Powell as well. He said, “Consider the 5,500 residents of Powell, Wyo. With 20 percent of the population below the poverty line and the town located 500 miles from the largest metropolitan area, the citizens knew something drastic needed to be done to save the idyllic quality of life they cherished in a small town. Together they decided to spend $4.9 million on connecting each home to a private-public fiber optic network. This high-speed access helped connect them with distant relatives, provided online shopping and opened up new markets for local businesses. It also made the entire population attractive to virtual call center recruiters.” Douglas County, Wa. Sabey’s new data center campus, Intergate.Columbia, sits on 30 acres and accommodates two data center buildings, including one 205,000-squarefoot structure and one of 188,000 square feet. The buildings are served by a new, redundant substation on site. Douglas County PUD, along with its grid of hydroelectric power, supplies the site with abundant, inexpensive electricity, thereby reducing electric costs by 40 to 70 percent. Multiple fiber carriers are available to provide redundant service. Gainesville, Fla. Gainesville’s municipal network has attracted businesses to the area and allowed them to expand. The Prog-

ress Corporate Park, located outside Alachua, has been served with broadband since 1998 and now hosts many biotech organizations as well as the University of Florida’s Sid Martin Biotechnology Incubator. GRUCom is also providing fiber services to Santa Fe College’s new Alachua Corporate Training Center, which will be located next to the research park. The center will provide workforce training for the biotech industry. The City of Gainesville partnered with the Council on Economic Development to provide high-speed connectivity to the Gainesville Technology Enterprise Center, which also fosters early-stage technology start-up companies. Several businesses that received connectivity at the enterprise center have matured and moved to locations where GRUCom’s services are available and continue to use them today. The fiber network has also allowed several existing companies to receive superior service at much lower prices. Jackson, Tenn. The Jackson Energy Authority, a publicly owned utility, built a fiber-to-thepremises system in its home town and surrounding areas and opened the system to service providers that sell telephone, Internet access and cable television to local residents and businesses. Among the companies in Jackson taking advantage of this state-of-the-art network: Trinity Solutions, Xpert Systems Integration and Interworks. All three, which position themselves as providers of IT support services for small businesses, locate their servers in Jackson Energy’s operations center. Lafayette, La. The municipal FTTH system has attracted call centers and a myriad of video production operations – firms that depend on reliable broadband to move huge files back and forth among video editing and special effects firms worldwide. The result: thousands of new jobs.

FTTH Council | The Advantages of Optical Access |

29

F

Introducing 1 Gbps to the Home

ew individuals need 1 Gbps broadband to their homes today, but many people are betting that a gigabit will be the standard soon enough. Google chose Kansas City, Kan., over 1,100 other applicants for its first 1 Gbps FTTH build, and EPB Fiber Optics (the municipally owned network in Chattanooga, Tenn.) is now offering 1 Gbps access to residential and business customers throughout its service area. Announcing its program last year, Google offered several scenarios. “Imagine sitting in a rural health clinic, streaming three-dimensional medical imaging over the Web and discussing a unique condition with a specialist in New York,” its statement said. “Or downloading a high-definition, fulllength feature film in less than five minutes. Or collaborating with classmates around the world, while watching live, 3D video of a university lecture.” Google and Kansas City “In selecting a city,” said Milo Medin, Google’s vice president for access services, “our goal was to find a location where we could build efficiently, make an impact on the community and develop relationships with local government and community organizations.

30

... We’ll be working closely with local organizations including the Kauffman Foundation, KCNext and the University of Kansas Medical Center to help develop the gigabit applications of the future.” Pending approval from the city’s Board of Commissioners, Google expects to offer 1 Gbps service as early as 2012. Medin says Google will “also be looking closely at ways to bring ultra-high-speed Internet to other cities across the country. ... We can’t wait to see what new products and services

| The Advantages of Optical Access | FTTH Council

will emerge as Kansas City moves from traditional broadband to ultra-highspeed fiber optic connections.” Medin described Kansas City as only “the start, not the end of the project.” He added, “Over the coming months, we’ll be talking to other interested cities about the possibility of us bringing ultra-high-speed broadband to their communities.” Chattanooga EPB’s 1 Gbps service is available to every home and business within EPB’s 600-square-mile, nine-county service area. The Internet service rides on EPB’s all-fiber, smart-grid network, which EPB built with the help of a $111 million grant from the Energy Department before the economic stimulus added more smart-grid funding nationwide in 2009. The city says its 30 Mbps entrylevel service lets users download and record four channels at once for viewing later. And the electric utility saves at least $40 million a year on power by, among other things, reducing theft of electricity and shaving peak loads. But as Harold DePriest, CEO of EPB, said, “The overriding consideration is that this is a real tool for economic development for our community. It is the basis for creating the products and services of the Internet of the future. And it’s in Chattanooga today.”

Understanding Fiber Network Architectures

F

or historical reasons, optical networks developed along several parallel evolutionary paths. Unlike the Betamax/VHS wars, no one won the FTTH wars, so network builders can now choose among several options or even mix and match them as needed. The “family” of passive optical networks now has two major branches – PON and AON (also called P2P) – and many technical variants within those branches. PON stands for “passive optical network.” Networks are passive when they have no powered electrical devices between a central office and an end user. All the handling of the light beams that carry the signal is done with mirrors, prisms and fiber. AON stands for “active optical network.” As the name implies, these networks have electrical devices – generally Ethernet routers and switches – along the fiber path. These days, the “active electronics” are usually in central offices rather than in remote cabinets or local points of presence. For this reason, the industry has begun to call active networks pointto-point or P2P networks. This refers to the fact that each end user gets a dedicated fiber (or several dedicated fibers) extending from the central office to the user premises. By contrast, in a PON, which is sometimes called a point-to-multipoint network, each fiber in the central office carries signals to as many as 128 customers (16- and 32-way splits are normal with today’s most widely used PON standards). Because each fiber requires its own laser, P2P networks require more power and space in the central office. But because they do not require fiber distribution hubs (containing optical splitters) in the field, they tend to be simpler to operate. Evolution of PON Standards Within the general category of passive optical networks, there are two branches. One is based on Ethernet, the same standard that is used in home

and corporate local-area networks. The Ethernet branch has been standardized by IEEE – the Institute of Electrical and Electronics Engineers. The other branch is based on carrier standards from the ITU – International Telecommunication Union – and is more “telephone-like.” The ITU Family BPON (for “Broadband PON”) was the first PON standard widely used in North America. It is based on the ATM protocol and has a top speed to users of 622 Mbps and upstream speed of 155 Mbps, but it allows the use of a separate wavelength of light to support video services. BPON has largely been replaced by GPON, which allows 2.48 Gbps downstream to the user and 1.24 Gbps upstream and also has a separate video wavelength. GPON supports ATM, Ethernet and TDM (the protocol phone companies use for ordinary telephone service) by wrapping or “encapsulating” the data packets with extra bits. GPON became commercially available in 2006 and is the most widely used standard in North America today. A new upgrade, 10G GPON, is now becoming commercially available. As the name implies, downstream bandwidth is about 10 Gbps – four times the current standard. Upstream bandwidth has also been increased fourfold. However, 10G GPON is not expected to displace GPON in the near future; it is more likely to be adopted for enterprise use, mobile backhaul and fiber to the building applications.

The Ethernet Family The second branch of the PON family tree is the Ethernet branch. Ethernet is also used for active networks. The first Ethernet PON (EPON) standard was released by the IEEE a few months after the GPON standard in 2004. The standard was quickly upgraded to 1.25 Gbps, twice the original bandwidth, as new electronic parts became available. Networks using that speed are sometimes called EPON and sometimes called GEPON (for Gigabit Ethernet PON). 2.5 GigE equipment started to be deployed in 2009 and equipment using 10 GigE in 2010. Like 10G GPON, 10G EPON is not yet used for individual residential deployments. New Types of FTTH Networks New fiber optic technologies are being developed to meet new needs. For example, the RFoG (Radio Frequency over Glass) and DPoE (DOCSIS Provisioning over EPON) standards allow cable providers to use their existing DOCSIS protocols with all-fiber networks. RFoG also permits the use of existing cable devices at the headend and user premises. WDM-PON adapts wavelength-division-multiplexing electronic equipment developed for the transport portion of the network for use in the access network. WDM-PON can provide the kinds of speeds seen in intercity networks (currently up to 100 Gbps). Deployment in homes and businesses, especially in MDUs, is now occurring.

FTTH Council | The Advantages of Optical Access |

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The FTTH Council Certification Program The FTTH Council will certify any home installation that meets its standard – fiber optic cable that extends all the way to the boundary of the home premises. Certified projects may display the program’s badge in their advertising.

Certification is important because companies like to claim they have fiber networks, even when the fiber does not go all the way to the home. This can lead to consumer confusion. Consumers sometimes think they are getting the full benefit of 100-percent fiber broadband when in fact they are not. Once constituents understand the benefits of fiber, they will embrace it: •

Consumers will understand the difference between FTTH and other “fiber networks” that aren’t as good and will embrace the superior experience of FTTH.

•

Communities will understand the benefits that broadband brings in terms of jobs, wages and direct benefits such as medical and education ser­vices – especially when delivered in the best possible form – FTTH.

•

Investors will understand the benefits to companies that make the effort to build fiber to the home networks – in terms of increased customer loyalty, competitive advantage, return on invested capital and revenue.

Details and an application form can be found on the Web at www.FTTHCouncil.org. 1. FTTH, or fiber to the home, identifies a telecommunications architecture in which a communications path is provided over optical fiber cables extending from the telecommunications operator’s switching equipment to (at least) the boundary of the home living space or business office space (the side of the building or unit). This communications path is provided for the purpose of carrying telecommunications traffic to one or more subscribers and for delivering one or more services (for example Internet access, telephony and/ or video-television). 2. For the FTTH Council to certify any service provider’s network as operating over fiber-to-the-home access and to grant that service provider use of the Fiber-Connected Home badge, that service provider[, and their network,] must identify the location, size, and equipment being used in sufficient detail for the Council to effectively certify those deployments. The service provider must also confirm that commercial services are currently being delivered to revenue-paying subscribers. 3. The service provider must exhibit a high level of commitment to network-wide FTTH deployment as indicated by its “Strategic Commitment” to FTTH in its network. “Strategic Commitment” is defined as the ratio of: Total number of residential households in service provider’s serving areas to which services can be marketed over an FTTH access network (homes passed), divided by total residential households subscribed to voice, data or video services, served by service provider’s entire wireline network (total residential communication subscribers). This ratio must be 10 percent or higher.

Join the FTTH Council – see page 11 Become a CFHP! Certified Fiber to the Home Professional Program – see page 14

To learn more about fiber to the home: FTTH Council www.FTTHCouncil.org 1-866-320-6444 [email protected]

INDEPENDENT TELCOS Continued from Page 50

generate publicity, the great majority do not appear on this list. However, for the first time, the list shows several telcos that have adopted FTTH technologies for wireless backhaul before actually extending fiber to any homes. Deploying fiber to cell towers could prove to be an excellent strategy for financing buildouts of fiber to the home. Because many cell towers are in residential areas, serving cell towers entails placing a great deal of fiber very close to residences – which can radically change the business case for extending fiber to the home. Automated meter reading and other smart-grid applications over fiber are not yet widespread, but they, too, could prove important to the business case for FTTH. Electric utilities are all exploring a variety of smart-grid applications, of which the simplest and most straightforward is meter reading. Rather than building their own high-capacity networks for smart grids, some utilities are discussing collaboration with telcos that have suitable networks. One independent telco, Hancock Telecom in Indiana, went so far as to merge with a local electric utility, Central Indiana Power, in large part to use its FTTH network as the smart-grid network. (The merged entity is now called NineStar Connect.) Other telcos transmit meter data to utilities or simply make meter data available to customers to help them monitor their own energy use.

4 Most telcos use GPON technology, but active Ethernet is also important. The list BBP published in 2005 included mainly BPON systems, with a few EPON and one active Ethernet system. All passive optical networks deployed today are at the gigabit standard; GPON deployments outnumber Gigabit EPON by about 10 to 1. (BBP is not aware of any deployments of 10G technology among independent telcos.) In addition, most of the older, pre-gigabit networks have been up-

graded. The migration to GPON was speeded by the availability of Calix’s auto-sensing optical network terminals, which allow telcos to upgrade central-office equipment without having to replace equipment at customer premises. Although passive optical networking remains the most popular choice, at least 144 independent telcos now use active, or point-topoint, Ethernet. About half of those have made a companywide commitment to active Ethernet – in at least one case (Paxio) to support an openaccess model, in most other cases because they believe active Ethernet has more bandwidth headroom. The other half use GPON for residential services in towns and active Ethernet for sparsely populated areas where active Ethernet’s longer reach is an

advantage, for business services or for other special purposes. A few telcos have deployed RFoG technology to upgrade HFC plant. Use of multiple FTTH technologies has become common – the list now shows 23 percent of telcos with multiple technologies, unchanged from fall 2010. This choice has become more practical now that more electronics vendors support multiple technologies, often from the same chassis. 5 Several FTTH electronics vendors compete successfully in the independent telco market. Independent telcos differ substantially from the RBOCs in their dealings with vendors. RBOCs typically deal with large, global equipment vendors that design and manufacture equipment to their specifica-

FTTH Electronics Vendors Used

Note: Some telcos purchase equipment from multiple vendors. Calix

379

Unknown/Undecided

82

ADTRAN

57

Enablence

47

Motorola

16

CTDI

15

Alcatel-Lucent

11

Allied Telesis

11

Zhone

11

Tellabs

7

Hitachi

4

Ericsson

3

Cisco

3

Telco Systems

2

PacketFront

1

Ciena

1 0

50

100

150

200

250

300

350

400

Calix remains the leading electronics vendor in this market, with its market share increasing after the acquisition of Occam.

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

83

INDEPENDENT TELCOS RUS funding became more important for independent telcos as the stimulus program replaced private sources that had dried up. tions. The resulting equipment is not always well-suited to smaller, more rural markets. The three FTTH electronics vendors from which Verizon purchased most of its FTTH equipment – Alcatel-Lucent, Motorola and Tellabs – are relatively minor players in the Tier-2 and Tier-3 telco market, even though all three have had significant customer wins (notably Cincinnati Bell and Optimum Lightpath, which serve metropolitan markets). The great majority of independent telcos purchase their FTTH electronics, and often their fiber management equipment, from vendors that specialize in serving Tier-2 and Tier-3 telcos. These vendors are less likely to design equipment for particular customers; rather, they supply equipment for a variety of use cases and help customers configure it to meet specific needs. When independent telcos first began deploying fiber in 2001, nearly all of them used FTTH electronics from Optical Solutions Inc. (OSI). Since Calix acquired OSI in 2005, it has continued to maintain OSI’s lead in this market. Calix’s recent acquisition of Occam Networks, its strongest rival in the Tier-3 market, increased its share from three-fifths to nearly two-thirds of the companies on the list. Some companies that supplied FTTH electronics to independent telcos in the past have withdrawn from this market.

Still, several other vendors are actively competing in this space, and more than half the telcos on the list have bought FTTH electronics from vendors other than Calix. At least 15 percent have bought FTTH electronics from multiple vendors (even if Calix and Occam are counted as a single entity). Although press coverage often refers to independent telcos as if they were captive customers, this is far from true. Over the last several years, an increasing number of telcos have been willing to mix FTTH equipment from different vendors. 6 The Rural Utilities Service is playing a larger role in funding independent telco FTTH builds. The RUS Broadband Loan program has been an important source of FTTH funding since its inception in 2004. However, many telcos saw RUS as a last resort, preferring to use internal funds or deal with local lenders if possible. In earlier iterations of this list, around 15 percent of telcos building fiber to the home used RUS loan funding. In the last two years, however, other funding sources have dried up; at the same time, the RUS has had $3.6 billion in broadband stimulus loans and grants to disburse in addition to its original loan programs. The total number of telcos that have used RUS funding for FTTH projects doubled over two years to 29 percent last fall before falling to 28 percent in 2011. BBP

Telcos Building FTTH Networks, by State Our count of independent telco FTTH networks by state still shows Iowa in the lead – not surprising, as Iowa has close to 250 rural telcos, far more than any other state. But Minnesota and Texas are close behind, and BBP has documented current or pending builds by independent telcos in 47 states, the District of Columbia and Puerto Rico. Only Massachusetts, Delaware and Rhode Island are missing from the list – and they are at the epicenter of Verizon’s FiOS build. State No.

State No.

IA. . . . . . . . . . . 53 MN. . . . . . . . . . 41 TX. . . . . . . . . . 39 KS. . . . . . . . . . 30 WI. . . . . . . . . . 28 OH . . . . . . . . . 23 IL. . . . . . . . . . . 22 OR. . . . . . . . . . 21 NE. . . . . . . . . . 21 GA. . . . . . . . . . 20 NY. . . . . . . . . . 20 IN . . . . . . . . . . . 17 NC. . . . . . . . . . 16 ND . . . . . . . . . 16 MO. . . . . . . . . . 15 SC. . . . . . . . . . . 15 ID . . . . . . . . . . 14 AL. . . . . . . . . . . 13 CA. . . . . . . . . . . 13 CO. . . . . . . . . . . 13 MI. . . . . . . . . . . 13 SD. . . . . . . . . . . 13 KY. . . . . . . . . . . 12 OK. . . . . . . . . . . 12 AZ. . . . . . . . . . . 11

MT . . . . . . . . . . 11 TN. . . . . . . . . . . 11 PA. . . . . . . . . . 10 UT. . . . . . . . . . 10 FL . . . . . . . . . . . . 9 VA. . . . . . . . . . . . 9 AR. . . . . . . . . . . . 8 WA. . . . . . . . . . . 8 MS . . . . . . . . . . . 7 NM. . . . . . . . . . . 7 LA. . . . . . . . . . . . 6 WV. . . . . . . . . . . 6 NV. . . . . . . . . . . . 5 AK. . . . . . . . . . . . 4 VT. . . . . . . . . . . . 4 WY. . . . . . . . . . . 4 NH . . . . . . . . . . . 4 ME . . . . . . . . . . . 3 HI . . . . . . . . . . . . 2 MD. . . . . . . . . . . 2 CT. . . . . . . . . . . . 1 DC. . . . . . . . . . . . 1 NJ. . . . . . . . . . . . 1 PR. . . . . . . . . . . . 1

The following table shows independent telcos that have constructed FTTH networks or are actively planning them. A few companies identified as CLECs are non-telco amenity providers in some of the states where they operate. Many of the companies identified as ILECs are installing FTTH through their CLEC subsidiaries. We’ve made every effort to update the names of vendors and deployers to reflect mergers and rebrandings. If your company is missing, or if the information is incomplete, send corrections to [email protected]. We update this list continually on www.broadbandproperties.com/search.php

84

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

INDEPENDENT TELCOS Provider

States

Vendor – FTTH Electronics

Start Date

Greenfield/Replace/ Competitive Overbuild

Technology

Services

Provider Type

MT

Calix, Enablence

2006

Replace

GPON, Active Ethernet

Triple Play

ILEC

ND, MN

Calix

Overbuild

Active Ethernet

Voice, Data, Business Services

CLEC

IL

ADTRAN

2010

Overbuild

GPON, Active Ethernet

CLEC

Ace Communications Group

MN

Calix

2010

Active Ethernet

ILEC

Adak Telephone

AK

Calix

2006

Replace

GPON

Triple Play

ILEC

Adams Telephone Cooperative

IL

Calix

2006

Replace

GPON

Triple Play

ILEC

Albany Mutual Telephone Association

MN

Enablence

2006

Replace

Active Ethernet

Triple Play

ILEC

Alenco Communications (Pathway Com-Tel)

TX

Calix

2002

Overbuild, Greenfield

PON

Triple Play

ILEC

All West Communications

UT

Calix

2004

Overbuild

GPON

Triple Play

ILEC

Allband Communications Cooperative

MI

Calix

2005

Greenfield

GPON

Triple Play, Security

ILEC

Allendale Communications

MI

Enablence

2005

Greenfield

Active Ethernet

Triple Play

ILEC

Alliance Communications

SD

Calix

2006

Replace

GPON

Voice, Data

ILEC

Allo Communications

NE

Calix

2005

Overbuild

GPON, Active Ethernet

Triple Play, Business Services

CLEC

Alma Communications

MO

Enablence, Calix

2006

Replace

GPON

Triple Play

ILEC

Alpine Communications

IA

Calix

2007

Replace

Active Ethernet

Voice, Data

ILEC

Amherst Telephone Company

WI

2009

Replace

Active Ethernet

Triple Play

ILEC

Arcadia Telephone Cooperative

IA

Armstrong Telephone

PA

3 Rivers Communications 702 Communications Access2Go

Calix

2010

GPON, Active Ethernet GPON, Active Ethernet

ILEC Voice, Data

ILEC

Arthur Mutual Telephone

OH

ADTRAN

2010

Overbuild

Active Ethernet

Arvig Communications (East Otter Tail)

MN

Calix

1995

Replace, Greenfield

GPON

Triple Play

ILEC

Astound Broadband

CA

CTDI

2004

Replace

ATC Communications

ID

Calix

2008 2005

ATMC

NC

Motorola, Calix

Aztech Cable

AZ

Calix

ILEC

EPON

Voice, Data

CLEC

GPON

Triple Play

ILEC

Greenfield

BPON, GPON

Triple Play

ILEC

Overbuild

GPON

Triple Play

CLEC

Baldwin Telecom

WI

Calix

2002

Greenfield

GPON

Triple Play

ILEC

Ballard Telephone

KY

Calix

2008

Replace

GPON

Triple Play

ILEC

Baraga Telephone

MI

Calix

GPON

Triple Play

ILEC

Barry County Telephone

MI

Calix

GPON

ILEC

Bascom Mutual Telephone Company

OH

Calix

2003

Overbuild

BPON

Triple Play

ILEC

BayRing Communications

NH

ADTRAN

2010

Overbuild

GPON

Voice, Data

CLEC

Beaver Creek Cooperative Telephone Company

OR

Replace

ILEC

Beehive Telephone

UT

BEK Communications

ND

Calix, Cisco

2004

Replace

Replace GPON, Active Ethernet

Triple Play

ILEC

ILEC

Ben Lomand Telephone Co-op

TN

Calix,

2006

Replace

Active Ethernet

Triple Play

ILEC

Benkelman Telephone Company (Wauneta Telephone, BW Telcom)

NE

Calix

2009

Benton Cooperative Telephone Company (Milaca Local Link)

MN

Calix, CTDI

2005

Greenfield

GPON, EPON

Triple Play

ILEC

Benton Ridge Telephone Company

OH

Calix

2010

Replace

Active Ethernet

Triple Play

ILEC

GPON

ILEC

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

85

INDEPENDENT TELCOS Provider

Bernard Telephone Company

States

Vendor – FTTH Electronics

IA

Start Date

Greenfield/Replace/ Competitive Overbuild

2010

Replace

Technology

Services

Provider Type

Voice, Data

ILEC

BEVCOMM (Eckles Telephone Company)

MN

Calix

2007

Greenfield

Active Ethernet

Triple Play

ILEC

Big Bend Telephone

TX

Calix, Enablence

2005

Replace

GPON, Active Ethernet

Voice, Data

ILEC

Big River Telephone

MO

ADTRAN

GPON

CLEC

Blair Telephone (HunTel)

NE

Calix

GPON

ILEC

Blanca Telephone Company (Jade Communications)

CO

Tellabs

2006

Replace

PON

ILEC

Bloomer Telephone

WI

Calix

2007

Replace

GPON, Active Ethernet

Triple Play

Blossom Telephone Company

TX

Calix

2010

Replace

Blue Valley Tele-Communications

KS

Tellabs

2006

Replace

GPON

Triple Play

Border to Border Communications

TX

Calix, CTDI

2004

Replace

BPON, EPON

Triple Play

ILEC

Brantley Telephone

GA

Calix

2007

Replace

GPON

Triple Play

ILEC

Brazoria Telephone Company

TX

Alcatel-Lucent

GPON

Bretton Woods Telephone Company

NH

2008

Greenfield

2009

Replace

ILEC ILEC ILEC

Triple Play

ILEC

Voice, Data

ILEC

Triple Play, Security

CLEC

Broadband Associates

CA

BroadStar

NC

2005

Greenfield

Overbuild

CLEC

Bruce Telephone Company

MS

2009

Replace

BTC (Breda Telephone Corp., Western Iowa Networks)

IA

2008

Overbuild

BTC Broadband (Bixby Telephone Company)

OK

Calix

2005

Greenfield, Replace

Buckeye Telesystem

OH

Calix, CTDI

2006

Buckland Telephone Company

OH

Calix

2005

Buggs Island Telephone Cooperative

VA

Calix

2009

Bulloch Telephone Cooperative

GA

Motorola, Calix

2005

Replace

PON

Triple Play

ILEC

Butler-Bremer Communications

IA

2008

Replace

Active Ethernet

Triple Play

ILEC

ILEC Triple Play

ILEC

GPON

Triple Play

ILEC

Overbuild, Replace, Greenfield

GPON, RFoG

Voice, Data

CLEC

Replace

GPON

Triple Play

ILEC

GPON

ILEC

Calaveras Telephone

CA

Calix

2006

Greenfield

GPON

Triple Play

ILEC

Cal-Ore Communications

OR

Calix

2005

Greenfield

GPON

Triple Play

ILEC

Cambridge Telephone

ID

Calix

2005

Replace

GPON

Triple Play

ILEC

Cambridge Telephone Company

NE

Enablence

2009

Replace

Active Ethernet

Triple Play

ILEC

Cameron Communications (LBH LLC)

LA

Calix

2004

Replace, Overbuild

GPON

Triple Play

ILEC

Canby Telcom

OR

Calix

2006

Greenfield, Replace

GPON

Triple Play

ILEC

Greenfield

GPON

Triple Play

Cap Rock Telephone Cooperative

TX

Calix

2005

Cascade Communications (formerly Cascade Telephone)

IA

Calix

2010

Cass Communications

IL

Centennial de Puerto Rico

PR

Calix

2007

Replace

Active Ethernet

Central Scott Telephone

IA

Calix

2007

Overbuild

GPON, Active Ethernet

Central Texas Technologies

TX

CTDI

2002

Greenfield

EPON

Triple Play

CLEC

AL, CO, MI, MO, WI, Others

Calix, ADTRAN

Greenfield

GPON

Triple Play, Mobile Backhaul

ILEC

CenturyLink

86

2010

GPON Replace

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

ILEC ILEC

Triple Play

ILEC

Voice, Data

CLEC ILEC

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INDEPENDENT TELCOS Provider

States

Vendor – FTTH Electronics

Champaign Telephone (CT Communications)

OH

Calix, Allied Telesis

Chariton Valley Telecom Corporation

MO

Enablence, Calix

Chazy Westport Communications (Westelcom)

NY

Calix

Chequamegon Communications Cooperative

WI

Start Date

Greenfield/Replace/ Competitive Overbuild

Technology

Services

Provider Type

Replace

GPON, Active Ethernet

Triple Play

ILEC

2003

Replace, Overbuild

GPON, Active Ethernet

Triple Play

ILEC

2009

Replace, Overbuild

Active Ethernet

Triple Play

ILEC

Triple Play

ILEC

2010

Chesnee Telephone

SC

Calix

Cheyenne River Sioux Tribe Telephone Authority

SD

Calix

Chickamauga Telephone

GA

Calix

Chickasaw Telecom Services

OK

Calix

ChoiceTEL Communications

WI

ADTRAN

2008

Christensen Communications

MN

Calix

2008

Cimarron Telephone Cincinnati Bell Cinergy MetroNet

Greenfield

GPON

Triple Play

ILEC

GPON

ILEC

2008

GPON

ILEC

2010

GPON

Voice, Data, Business Services

ILEC

Overbuild

GPON

Triple Play

CLEC

Replace

BPON, GPON

Triple Play

ILEC

OK

Calix

2008

OH, KY

Alcatel-Lucent, Motorola

2009

Replace

GPON GPON

Triple Play

ILEC ILEC

IN

Alcatel-Lucent

2005

Overbuild

BPON

Triple Play

CLEC

Citizens Mutual

IA

Calix

2006

Replace

GPON

Triple Play

ILEC

Citizens Telephone Company

GA

CTDI, Cisco

2008

Replace

EPON, GPON

Triple Play

ILEC

Citizens Telephone Company of Kecksburg

PA

Calix

2005

Replace

PON

Triple Play

ILEC

Citizens Telephone Coop

WI

Calix

Citizens Telephone Cooperative

VA

Calix

2004

Replace

2010

Replace

CityNet

GPON

WV, OH

ADTRAN

Clarence Telephone

IA

Calix

Clarks Telecommunications (Northeast Nebraska Telephone Company)

NE

Calix

2009

Clear Creek Telephone & TeleVision

OR

Calix

2009

Clear Lake Telephone

IA

Calix

2008

Clearwave Communications

IL

Calix

C-M-L Telephone Cooperative Association

IA

Calix

2010

Replace

Cochrane Cooperative Telephone Company

WI

Calix

2010

Replace

Replace

GPON

ILEC Triple Play

ILEC

GPON

CLEC

BPON, GPON

ILEC

Active Ethernet

Triple Play

ILEC

GPON

Triple Play

ILEC

GPON

Triple Play

Replace

GPON

ILEC CLEC

Triple Play

ILEC

GPON

Triple Play

ILEC

Colo Telephone Company

IA

Calix

2005

Replace

GPON

Triple Play

ILEC

Columbus Telephone Company

KS

Enablence

2004

Replace

EPON

Triple Play

ILEC

Communications 1 Network

IA

Calix

2008

Replace

GPON

Triple Play

ILEC

Comporium Communications (Lancaster Telephone)

SC

Enablence

2004

Greenfield

EPON, GPON

Triple Play

ILEC

ComSouth Telecommunications

GA

Calix, Motorola

2005

Greenfield, Replace

GPON

Triple Play

ILEC

ComSpan USA

OR

Hitachi

2005

Overbuild

GPON

Triple Play

CLEC

Connections Etc. (Sherburne County Rural Telephone Co./Iowa Telecom)

MN

Calix

2008

GPON

IL, TX

Zhone Technologies

2007

GPON

Triple Play

ILEC

ND

Calix

2006

GPON, Active Ethernet

Triple Play

ILEC

Consolidated Communications Inc. Consolidated Telcom (Consolidated Enterprises)

88

Replace

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

ILEC

INDEPENDENT TELCOS Provider

States

Vendor – FTTH Electronics

Start Date

Greenfield/Replace/ Competitive Overbuild

Technology

Services

Provider Type

Consolidated Telecommunications Company

MN

Calix

2005

Overbuild

GPON, Active Ethernet

Triple Play, Mobile Backhaul

ILEC

Consolidated Telephone Co.

NE

ADTRAN

2010

Replace

GPON

Triple Play

ILEC

Conxxus (Illicom Telecommunications)

IL

Enablence

2001

Overbuild

EPON

Triple Play

CLEC

Cooperative Telephone Exchange

IA

Calix

2006

Replace

Active Ethernet

Triple Play

ILEC

Cordova Telephone Cooperative

AK

2010

Replace

Voice, Data

ILEC

Corn Belt Telephone

IA

2008

Replace

Triple Play

ILEC

CP-Tel

LA

Calix

2004

Greenfield

BPON, GPON

Triple Play

ILEC

Craigville Telephone Company

IN

Calix

2006

Overbuild

GPON

Triple Play

ILEC

Craw-Kan Telephone Cooperative

KS

ADTRAN

GPON

Cross Communications

OK

Calix

GPON

CSS Communications

WA

CTDI

2003

Replace

CT Communications

NC

Enablence

2005

Greenfield

CTS Telecom (Climax Telephone Company)

MI

ADTRAN

2010

Cunningham Telephone and Cable

KS

2009

Replace

Custer Telephone Cooperative

ID

Calix

2006

Replace

D&E Communications

PA

Calix

2008

GPON

D&P Communications (Deerfield Farmers’ Telephone Company)

MI

Motorola

2008

GPON

Dakota Central Telecom

ND

Calix,

2002

Darien Telephone

GA

Calix

Replace, Overbuild

ILEC Triple Play

ILEC

EPON

Triple Play

CLEC

EPON

Voice, Data

ILEC

GPON

Voice, Data

ILEC

GPON, Active Ethernet

Voice, Data

ILEC

Triple Play

ILEC ILEC

Triple Play

ILEC

GPON

Triple Play

ILEC

GPON

Voice, Data

ILEC

Daystarr Communications

MI

Calix

2008

Overbuild

GPON

Delhi Communications

NY

Enablence

2009

Replace

Active Ethernet

Triple Play

ILEC

DFT Communications (Dunkirk & Fredonia Telephone Co.)

NY

Calix, ADTRAN

Overbuild

GPON

Voice, Data

ILEC

ND, SD

Calix

2004

Replace

GPON

Triple Play

ILEC

2009

Replace

GPON

Voice, Data

ILEC

Greenfield

BPON, GPON

Voice, Data

ILEC

Dickey Rural Networks Diller Telephone Company

NE

ADTRAN

OR, WA, ID, UT

Calix

Dobson Telephone

OK

Calix

Direct Communications

Doylestown Telephone Company

OH

DTC Communications (DeKalb Telephone Cooperative)

TN

Dumont Telephone Company

IA

GPON Overbuild 2008

Hitachi

CLEC

2006

Replace

ILEC Triple Play

ILEC

Active Ethernet

Voice, Data

ILEC

GPON

Triple Play

ILEC

Duo County Telephone Cooperative

KY

2010

Replace

Triple Play

ILEC

EasyTel Communications

OK

Calix

2005

Overbuild

PON

Triple Play

CLEC

EATEL

LA

Alcatel-Lucent, Calix

2004

Greenfield, Replace

BPON, GPON

Triple Play

ILEC

Egyptian Telephone Cooperative Association

IL

Calix

2010

GPON, Active Ethernet

Voice, Data

ILEC

Ellsworth Cooperative Telephone Association

IA

2010

Voice, Data

ILEC

Emily Cooperative Telephone Company

MN

2007

Triple Play

ILEC

Endeavor Communications

IN

Calix

2006

Replace

GPON

Triple Play

ILEC

Enhanced Telecommunications Corporation

IN

Calix

2004

Replace

GPON

Triple Play

ILEC

Replace

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

89

INDEPENDENT TELCOS Provider

States

Vendor – FTTH Electronics

Start Date

Greenfield/Replace/ Competitive Overbuild

Technology

Services

Provider Type

ENMR-Plateau Telecommunications

NM

Calix

2003

Replace

GPON

Voice, Data

ILEC

En-Touch Systems

TX

Enablence

2006

Greenfield

EPON

Triple Play, Security, Home Automation, Meter Reading

CLEC

Epic Touch (Elkhart Telephone Company)

KS

Enablence, Calix

2005

Replace

EPON, GPON

Triple Play

ILEC

Etex Telephone Cooperative

TX

Calix, Enablence

2002

Overbuild

GPON, Active Ethernet

Triple Play

ILEC

Evertek (FiberComm)

IA

GPON, Active Ethernet

Voice, Data

ILEC

F&B Communications

IA

BPON, GPON

Triple Play

ILEC

Triple Play

CLEC

FairPoint Communications

Calix

Overbuild

WA, MANY

Calix

Greenfield

GPON

Falcon Broadband

CO

Hitachi

2005

Greenfield, Overbuild

GPON

Farber Telephone Company

MO

2008

Replace

ILEC Voice, Data

ILEC

Farmers and Merchants Mutual Telephone Company

IA

Calix

2007

BPON, GPON

Triple Play

ILEC

Farmers Independent Telephone Company

WI

Calix

2010

GPON

Triple Play

ILEC

Farmers Mutual

ID

Calix

Replace

BPON, GPON

Triple Play

ILEC

Farmers Mutual

MN

Calix

Replace

GPON

Triple Play

ILEC

Triple Play

ILEC

Farmers Mutual Cooperative Telephone Company

IA

2007

Replace

Farmers Mutual Telephone Company (OmniTel Communications)

IA

ADTRAN

2010

Replace

Active Ethernet

Triple Play

ILEC

Farmers Telecommunications Cooperative

AL

Calix

2007

Greenfield, Replace

Active Ethernet

Voice, Data

ILEC

Farmers Telephone Cooperative

SC

Calix

2006

Greenfield, Replace

GPON, Active Ethernet

Triple Play

ILEC

FEC Communications (Connextions Telecom)

TX

Calix

2006

Greenfield

GPON, Active Ethernet

Triple Play

CLEC

Federated Telephone

MN

Calix

1996

Replace, Overbuild

GPON

Triple Play

ILEC

IA

Calix

2009

GPON

Voice, Data

ILEC

WV, OH

Calix

2007

BPON, GPON

Voice, Data, Video­ conferencing

CLEC

MO

Calix

Fenton Cooperative Telephone Company FiberNet Fidelity Telephone

Overbuild

BPON, GPON, Active Ethernet

Filer Mutual

ID

ADTRAN, Calix

Foothills Rural Telephone Coop

KY

Alcatel-Lucent

Fort Jennings Telephone Company

OH

Calix

2004

Replace, Overbuild

GPON

Triple Play

ILEC

Fort Mojave Telecommunications

AZ

Calix

2008

Greenfield, Replace

GPON

Voice, Data

ILEC

Greenfield

BPON, GPON

Voice, Data

ILEC

2002

Greenfield

GPON

Triple Play

CLEC

GPON

Mobile Backhaul

ILEC

Replace

Active Ethernet

Voice, Data

ILEC

2005

Replace

BPON, GPON

Triple Play

2006

Replace

Frontier Communications

2004

Many

Calix

FTTH Communications

MN

Calix

Fulton Telephone Company

MS

Calix

2010

Ganado Telephone

TX

Calix

2008

Calix

Garden Valley Telephone

MN

Gardonville Cooperative Telephone Association

MN

General Communications

AK

90

Calix

Replace

GPON

Greenfield, Replace

BPON, Active Ethernet

ILEC

Replace

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

ILEC Triple Play

ILEC

ILEC ILEC

GPON

Voice, Data

CLEC

INDEPENDENT TELCOS Provider

States

Geneseo Telephone

Vendor – FTTH Electronics

Start Date

Calix

2010

Greenfield/Replace/ Competitive Overbuild

Technology

Services

Provider Type

GPON

Voice, Data

ILEC

Geneva Broadband

NE

Calix

2009

Overbuild

GPON

Voice, Data

CLEC

Gervais Telephone

OR

Calix

2001

Replace, Overbuild

GPON

Triple Play

ILEC

Gila River Telecommunications

AZ

Calix

Glasford Telephone Company

IL

ADTRAN

Voice, Data

ILEC

Glenwood Telephone

NE

Calix

Global Valley Networks

CA

BPON, GPON Greenfield

GPON

ILEC

2007

Replace

BPON, GPON

Triple Play

ILEC

2005

Greenfield

PON

Voice, Data

ILEC

Golden Belt Telephone Association

KS

Calix

2008

Replace

Active Ethernet

Triple Play

ILEC

Golden West Telephone Company

SD

Calix

2004

Replace

GPON

Voice, Data

ILEC

Goldfield Telephone Company

IA

2007

Replace, Overbuild

Triple Play

ILEC

Gorham Telephone

KS

Calix

2007

Replace

GPON

Triple Play

ILEC

Granby Telephone Company (GTC Broadband)

MO

Calix

2009

Replace

Active Ethernet

Triple Play

ILEC

IA

Calix

2005

Replace, Overbuild

PON

Triple Play

ILEC

2009

Replace

Grand Mound Cooperative Telephone Association Grand River Mutual Telephone Corp.

MO, IA

Grande Communications

TX

Granite State Telephone (GSInet)

NH

Great Plains Communications

NE

Greenfield Communications

Ericsson, Calix

2005

Overbuild

2007

Greenfield, Replace

Enablence, ADTRAN

2007

Greenfield, Replace Greenfield

AZ, CA

Calix, CTDI

2005

Gridley Telephone

IL

Calix

2006

GTel Teleconnections (Germantown Telephone)

NY

Calix

2008

Gulfpines Communications

MS

Calix

GVTC Communications

TX

Calix

KS

Calix

ND, MN

Calix

H&B Communications Halstad Telephone Company Hamilton County Communications

IL

ILEC PON, GPON

Triple Play

CLEC

Voice, Data

ILEC

GPON

Voice, Data

ILEC

GPON, EPON

Triple Play

CLEC

BPON, GPON

Triple Play

ILEC

Replace

GPON

Triple Play, Video­ conferencing

ILEC

2004

Greenfield, Replace, Overbuild

GPON

Triple Play, Security

ILEC

2010

Replace

GPON, Active Ethernet

2010

Replace

GPON

ILEC

GPON

ILEC Triple Play

ILEC

Triple Play

ILEC

Harbor Communications

AL

ADTRAN

Overbuild

GPON

Voice, Data

CLEC

Hardy Telecommunications

WV

Zhone Technologies

2011

Replace

GPON

Triple Play

ILEC

Hargray Communications

SC

CTDI, Calix

2004

Greenfield

EPON, GPON

Triple Play

ILEC

Harrisonville Telephone

IL

Calix

2007

Greenfield

BPON, GPON

Triple Play

ILEC

Hartelco

NE

2009

Replace

GPON, Active Ethernet

Voice, Data

ILEC

Triple Play

ILEC

GPON

Triple Play

ILEC

Hartington Telephone Company

NE

Hawaiian Telecom

HI

Alcatel-Lucent

2009

Replace

2006

Greenfield, Replace

Hayneville Telephone

AL

Enablence

2008

Overbuild

GPON

Triple Play

ILEC

Heart of Iowa Communications Cooperative

IA

Calix

2005

Replace

BPON, GPON

Triple Play

ILEC

Hershey Cooperative Telephone Company

NE

ADTRAN

2010

Hiawatha Broadband

MN

Calix

2005

Overbuild

Hiawatha Telephone Company

MI

2010

Replace

Hickory Tech (Enventis)

92

MN, WI

Calix, Motorola

2002

GPON GPON, RFoG BPON, GPON, Active Ethernet

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

ILEC Triple Play

CLEC

Voice, Data

ILEC

Triple Play

ILEC

INDEPENDENT TELCOS Provider

States

Vendor – FTTH Electronics

Start Date

Greenfield/Replace/ Competitive Overbuild

Technology

Services

Provider Type

PA

Zhone Technologies

2009

Replace

GPON

Triple Play

ILEC

Highland Telephone Cooperative

TN, KY

Calix

2008

GPON

Triple Play

ILEC

Highland Telephone Cooperative

VA

Enablence

2007

Hill Country Telephone Cooperative

TX

Calix

2007

Hinton Telephone

OK

Calix

2002

Home Communications (Home Telephone Company)

KS

Home Telephone

SC

Calix

Hickory Telephone

Greenfield, Replace

GPON

Triple Play

ILEC

GPON, Active Ethernet

Triple Play, Security

ILEC

BPON Replace

2001

ILEC Triple Play

ILEC ILEC

Greenfield

GPON

Triple Play

Home Telephone

IL

Calix, ADTRAN

2006

Greenfield

GPON, RFOG

Voice, Data

ILEC

Home Town Telephone (Home Town Cable Plus)

FL

Calix

2004

Greenfield

GPON

Triple Play, Security

CLEC

Hood Canal Telephone Company

WA

Motorola

2004

Replace

PON

Triple Play

ILEC

Horizon Chillicothe Telephone (Horizon Telcom)

OH

Calix,

2007

GPON, Active Ethernet

Triple Play

ILEC

Horry Telephone Coop

SC

Motorola, Calix

2004

Greenfield, Replace

PON, GPON, Active Ethernet

Triple Play

ILEC

Hospers Telephone Exchange (HTC Communications)

IA

Calix

2010

Replace

Triple Play

ILEC

GPON

Triple Play, Home Automation

CLEC

GPON, Active Ethernet

Voice, Data

CLEC

Hotwire Communications

Hunter Communications

FL, VA, NJ, Calix, Motorola NY, PA, GA, SC, NC, MD OR

Calix

Greenfield, Overbuild

2010

Huxley Telephone

IA

Calix

2001

Replace, Overbuild

PON

Triple Play

ILEC

IAMO Telephone

IA, MO

ADTRAN

2010

Replace

Active Ethernet

Voice, Data

ILEC

iCornerstone

GA

CTDI

2004

Greenfield

EPON

Triple Play

CLEC

IdeaOne Telecom Group

ND

Calix

2002

Overbuild

GPON, Active Ethernet

Triple Play, Business Services

CLEC

Indiantown Telephone System (ITS Telecom)

FL

Calix

2006

Greenfield

GPON

Triple Play, Mobile Backhaul

ILEC

Calix

2010

GPON

Mobile Backhaul

ILEC

Triple Play

ILEC

Industry Telephone Company

TX

InterBel Telephone Cooperative

MT

Interstate Communications (Southwest Telephone Exchange, Interstate 35 Telephone Company)

IA

Calix

2010

Replace

GPON

Triple Play

ILEC

Interstate Telecommunications Cooperative (SS Telecom)

SD

Calix

2006

Replace, Overbuild

BPON, GPON, Active Ethernet

Triple Play

ILEC

Jaguar Communications

MN

Calix

2006

Overbuild

GPON

Triple Play

CLEC

James Valley Cooperative Telephone Company

SD

Triple Play

ILEC

Replace, Overbuild

JBN Telephone Company

KS

Johnson Telephone Company

MN

Calix

2010

Kalida Telephone

OH

Calix

Kalona Cooperative Telephone Compan

IA

Kanokla Telephone

KS

Calix, Zhone Technologies

Kaplan Telephone

LA

Calix

Kerman Telephone Company

CA

Replace

2008

Voice, Data

ILEC

Triple Play

ILEC

GPON, Active Ethernet

Triple Play

ILEC

GPON, Active Ethernet

Voice, Data

ILEC

GPON GPON

2009

2005

Replace

Replace

ILEC

GPON

Triple Play

ILEC

Active Ethernet

Voice, Data

ILEC

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

93

INDEPENDENT TELCOS Provider

KMTelecom Knology (acquired Sunflower Broadband)

States

Vendor – FTTH Electronics

Start Date

Greenfield/Replace/ Competitive Overbuild

2008

Replace

ILEC

2005 (K), Greenfield, Replace, EPON, GPON, RFoG Triple Play, AL, GA, TN, Ericsson, Overbuild Business Services FL, SC, KS Enablence, Calix, 2003 (S) Motorola

CLEC

MN

La Jicarita Rural Telephone Cooperative

NM

2010

Lackawaxen Telephone

PA

Calix

2010

LaHarpe Telephone

KS

Calix

2006

Lakeland Communications

WI

Calix

2010

Laurel Highland Total Communications (Laurel Highland Telephone, Yukon Waltz)

PA

ADTRAN, Calix

2003

Technology

Replace

Replace

Services

Provider Type

Voice, Data

ILEC

GPON

Voice, Data

ILEC

GPON

Triple Play

ILEC

GPON, Active Ethernet

Triple Play

ILEC

Replace

GPON

Triple Play

ILEC

Lavalle Telephone Cooperative

WI

Calix

2006

Greenfield

Active Ethernet

Triple Play

ILEC

LaWard Telephone Exchange

TX

ADTRAN

2010

Replace

GPON

Voice, Data

ILEC

Leaco Rural Telephone Cooperative

2010

GPON

Voice, Data

NM

Calix

Lehigh Valley Cooperative Telephone Association

IA

Calix

Lemonweir Valley Telephone

WI

Calix

2008

Replace

GPON

Triple Play

ILEC

Lexcom

NC

CTDI, Enablence

2007

Replace

RFoG, EPON

Triple Play

ILEC

Liberty Communications

IA

Calix,

2008

Replace

GPON

Triple Play

ILEC

GPON

ILEC ILEC

Ligonier Telephone

IN

Calix

2008

Replace

GPON

Triple Play

ILEC

Lincoln County Telephone System

NV

Alcatel-Lucent

2008

Greenfield, Replace

GPON

Triple Play, Security

ILEC

Lincoln Telephone

MT

Calix

IA

Calix

LISCO Lismore Cooperative Telephone Company

MN

Litestream Technologies

FL

Long Island Fiber Exchange

NY

Long Lines

NE

Calix

Enablence

GPON

ILEC

2005

Overbuild

Active Ethernet

Triple Play

CLEC

2010

Replace

Active Ethernet

Voice, Data

ILEC

2002

Greenfield

PON

Triple Play, Security

CLEC

2007

Overbuild

Active Ethernet

Voice, Data, Business Services

CLEC

2007

Overbuild

EPON

Triple Play

ILEC

Lonsdale Telephone

MN

Calix

Loretel Systems

MN

Calix

2009

GPON

GPON Triple Play

ILEC

ILEC

Loretto Telephone

TN

Calix

2010

GPON, Active Ethernet

Voice, Data

ILEC

Lost Nation-Elwood Telephone

IA

Calix

Mabel Telephone Cooperative

MN

Enablence

2006

Replace

PON

Triple Play

ILEC

Madison Telephone

KS

Calix

2009

Replace

GPON, Active Ethernet

Voice, Data

ILEC

Mahaska Communications Group

IA

Calix

2004

Overbuild

GPON, Active Ethernet

Triple Play

CLEC

Mainstay Communications (Henderson Cooperative Telephone Company)

NE

2009

Replace

Triple Play

ILEC

Manawa Telephone

WI

Calix

Voice, Data

ILEC

Manti Tele Communication Company

UT

Enablence

2008

Replace

Active Ethernet

Triple Play

ILEC

Margaretville Telephone Company

NY

CTDI

2007

Overbuild

RFoG

Triple Play

ILEC

Marquette-Adams Telephone Cooperative

WI

Calix

2008

Replace, Overbuild

GPON, Active Ethernet

Triple Play

ILEC

94

GPON

2010

GPON

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

ILEC

INDEPENDENT TELCOS Provider

Matanuska Telephone Association

States

Vendor – FTTH Electronics

Start Date

Greenfield/Replace/ Competitive Overbuild

Technology

Services

Provider Type

AK

Calix, ADTRAN, Telco Systems

2007

Greenfield, Replace

BPON, GPON

Triple Play, Mobile Backhaul, Business Services

ILEC

GPON

McClure Telephone Company

OH

Enablence

2006

Replace

McDonald County Telephone Company

MO

Enablence, Calix

2009

Replace

McDonough Telephone Cooperative

IL

Calix

2007

Replace

GPON

Medicine Park Telephone Company

OK, TX

Motorola

GPON

Melrose Telephone Company (diversiCOM)

MN

Metrostat Communications

NC

CTDI

2008

Greenfield, Replace

2009

Replace

2006

Overbuild

EPON

Triple Play

ILEC

Triple Play

ILEC

Triple Play

ILEC

Triple Play

ILEC

Triple Play

ILEC

Voice, Data

CLEC

Mid Century Telephone Cooperative

IL

ADTRAN

2007

Replace

GPON

Triple Play

ILEC

Middleburgh Telephone Company

NY

Calix, Motorola

2008

Replace

GPON

Triple Play

ILEC

Mid-Plains Rural Telephone Cooperative

TX

Calix

2008

Replace

GPON

Voice, Data

ILEC

Mid-Rivers Communications

MT

Calix

2010

Replace

Active Ethernet

Triple Play

ILEC

Midstate Communications

SD

Calix

2008

Replace

Active Ethernet

Triple Play

ILEC

Midstate Telephone

ND

Calix

Midvale Telephone

AZ, ID

Calix

2006

Greenfield, Overbuild

BPON, GPON

Voice, Data

Replace

BPON, GPON

Triple Play

Minburn Telephone

IA

Calix

Minford Telephone Company

OH

Calix

GPON

2009

Minnesota Valley Telephone

MN

Calix

Missouri Telephone

MO

Allied Telesis

2006 2010

Moapa Valley Telephone Company

ILEC

GPON Active Ethernet

ILEC ILEC

GPON Greenfield

ILEC

ILEC Triple Play

ILEC

NV

ADTRAN

KS, MO

Calix

Molalla Communications Company

OR

Calix, ADTRAN

2004

Greenfield

GPON, Active Ethernet

Voice, Data

ILEC

Momentum

AL

Alcatel-Lucent

2007

Greenfield

GPON

Triple Play, Security

CLEC

Monitor Cooperative Telephone Company

OR

2009

Replace

Voice, Data

ILEC

MoKan Dial

GPON

ILEC

BPON

ILEC

Monon Telephone Company

IN

Calix

2009

GPON

Monroe Telephone Company

OR

ADTRAN, Calix

2010

GPON

Triple Play

ILEC ILEC

Montana Opticom (Lightnex Communications, Vivid)

MT

Calix, ADTRAN

2002

Greenfield, Overbuild

GPON

Triple Play

CLEC

Moore and Liberty, Griggs County Telephone/Internet Communications

ND

Calix

2010

Replace

GPON, Active Ethernet

Triple Play

ILEC

Mosaic Telecom (Chibardun Telephone Cooperative)

WI

Calix

2007

Replace

GPON

Triple Play

ILEC

Mosinee Telephone

WI

Calix

GPON

ILEC

Moundville Telephone Company

AL

ADTRAN

2008

Greenfield

Voice, Data

ILEC

Mountain Rural Telephone Cooperative

KY

Calix

2010

Replace

Triple Play

ILEC

Mountain View Telephone (Yelcot Telephone)

AR

Calix

GPON

Triple Play

ILEC

MTCO Communications (Metamora Telephone)

IL

Calix

2008

GPON

Voice, Data

ILEC

Mud Lake Telephone Cooperative Association

ID

Calix

2010

96

Overbuild

Active Ethernet

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

ILEC

INDEPENDENT TELCOS Provider

Mulberry Cooperative Telephone

States

Vendor – FTTH Electronics

Start Date

Greenfield/Replace/ Competitive Overbuild

Technology

Services

Provider Type

IN

Calix

2009

Replace

GPON

Triple Play

ILEC

Replace

GPON

ILEC

GPON

ILEC

BPON, GPON

ILEC

Mutual Telephone Company

KS

Calix

2008

Nebraska Central Telephone Company

NE

ADTRAN

2010

Nehalem Telecommunications

OR

Calix

Nelson Telephone Cooperative

WI

Nemont Telephone Cooperative (Project Telephone)

MT

Calix

Network Communications

TX

ADTRAN

Nevada Comstock Communications

NV

2010

Replace

2006

Replace

ILEC GPON

Voice, Data

ILEC

2010

Overbuild

GPON

Voice, Data

CLEC

2008

Greenfield, Overbuild

Active Ethernet

Voice, Data

CLEC

New Hope Telephone Cooperative

AL

Calix

2006

Replace

Active Ethernet

Triple Play

ILEC

New Knoxville Telephone Company

OH

Enablence, ADTRAN

2004

Replace

EPON, GPON

Triple Play

ILEC

New Windsor Telephone

IL

Calix

2009

Replace, Overbuild

Active Ethernet

Triple Play

ILEC

Niagara Telephone Company

WI

Calix

2008

NineStar Connect (formerly Hancock Telecom)

IN

Enablence, Calix

2002

Greenfield

EPON, GPON

Triple Play, Meter Reading

ILEC

Nortex Communications (Muenster Telephone)

TX

Calix

2007

Replace

GPON, Active Ethernet

Triple Play

ILEC

North Central Telephone Cooperative North Dakota Telephone Company

GPON

ILEC

TN, KY

Calix

2007

Replace

Active Ethernet

Triple Play

ILEC

ND

Allied Telesis

2005

Replace

Active Ethernet

Triple Play

ILEC

GPON

Triple Play

ILEC

BPON, GPON

Voice, Data

ILEC

North Penn Telephone Company

PA

Calix

2008

North State Communications

NC

Calix

2005

Greenfield

Northeast Florida Telephone Company

FL

Calix

2005

Greenfield

GPON

Voice, Data

ILEC

Northeast Louisiana Telephone Company

LA

Calix

2010

Replace

Active Ethernet

Triple Play

ILEC

Northeast Missouri Rural Telephone

MO

Calix

2009

Replace

Active Ethernet

Triple Play

ILEC

Northern Arkansas Telephone Company (NATCO)

AR

Calix

2009

Replace

Active Ethernet

Triple Play

ILEC

Northern Telephone Cooperative

MT

Calix

2008

Replace

GPON

North-State Telephone Company

OR

Calix

Replace

GPON

Voice, Data

ILEC

Northwest Communications Cooperative

ND

Calix

2008

Replace

GPON

Triple Play

ILEC

ILEC

Northwestern Indiana Telephone

IN

Calix

2010

GPON

Voice, Data

ILEC

Nsight

WI

Enablence

2003

Greenfield

Active Ethernet

Triple Play

ILEC

NTELOS

VA

Alcatel-Lucent, Tellabs, Ciena, ADTRAN, Zhone Technologies

2006

Replace

GPON

Triple Play

ILEC

Nunn Telephone

CO

Calix

2010

GPON

ILEC

Omnilec

IL

Calix

One Source Communications

TX

ADTRAN

2010

Oneida County Rural Telephone Company

NY

Calix

2010

GPON

Ontario and Trumansburg Telephone

NY

Calix

2010

GPON, Active Ethernet

Voice, Data

ILEC

VA, MD, DC

Calix

2005

Overbuild

GPON

Triple Play, Security

CLEC

CT, NY

Cisco, Tellabs

Overbuild

Active Ethernet

Triple Play, Business Services

CLEC

Openband Optimum Lightpath

BPON Overbuild

GPON

CLEC Triple Play

CLEC ILEC

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

97

INDEPENDENT TELCOS Provider

States

Vendor – FTTH Electronics

Start Date

Greenfield/Replace/ Competitive Overbuild

Technology

OR

Calix

2006

Replace

GPON

Orlando Telephone Company

FL

Enablence

2007

Overbuild

Ottoville Mutual Telephone

OH

Calix

2010

Oxford Networks

ME

Calix, ADTRAN

2001

Replace, Overbuild

Palmetto Rural Telephone Cooperative

SC

Calix

2010

Panhandle Telephone Cooperative

OK

2010

Panora Cooperative Telephone Association (Guthrie Telecommunications)

IA

Calix

2002

Park Region Mutual Telephone Company

MN

Calix

Parker FiberNet

GA

Calix

Paul Bunyan Rural Telephone Cooperative

MN

PAXIO PBT Telecom

Oregon Telephone

Services

Provider Type ILEC

EPON

Triple Play

CLEC

GPON

Triple Play

ILEC

GPON, Active Ethernet

Triple Play

ILEC

Replace

GPON

Triple Play

ILEC

Replace

Active Ethernet

Triple Play

ILEC

Replace, Overbuild

GPON

Triple Play

ILEC

Overbuild

GPON

2006

Replace

GPON

Voice, Data

CLEC

Calix, Allied Telesis

2004

Replace, Overbuild

GPON, EPON, Active Ethernet

Triple Play

ILEC

CA

PacketFront

2004

Greenfield, Overbuild

Active Ethernet

Voice, Data

CLEC

SC

Motorola

2005

Greenfield

GPON, BPON

Triple Play

ILEC

Greenfield, Replace

GPON

Triple Play

ILEC

Pembroke Telephone Company

GA

Calix, ADTRAN

2004

Pembroke Telephone Cooperative

VA

Calix

2008

ILEC

GPON

ILEC

Penasco Valley Telecommunications

NM

Calix

2008

Peoples Rural Telephone Cooperative

KY

Calix

2008

Peoples Telecommunications

KS

Peoples Telephone Cooperative

TX

ADTRAN

2009

Replace

GPON

Voice, Data

ILEC

Perry-Spencer Rural Telephone Cooperative (PSC)

IN

Enablence, Calix

2009

Replace

GPON, Active Ethernet

Triple Play

ILEC

Phillips County Telephone Company (PC Telcom)

CO

Piedmont Rural Telephone Company

SC

Calix, ADTRAN

2010

GPON

Pine Drive Telephone Company

CO

Calix

2008

GPON

Pine Telephone Company

OK

Replace

GPON

Triple Play

ILEC

GPON, Active Ethernet

Triple Play

ILEC

Voice, Data

ILEC

2010

ILEC

2010

ILEC ILEC

OR

Calix

Pine Tree Networks

ME

Calix

Pineland Telephone Cooperative

GA

Calix

2006

Greenfield, Replace, Overbuild,

Active Ethernet

Triple Play

ILEC

Pinnacle Communications

AR

Calix

2005

Replace

GPON

Triple Play

ILEC

Pioneer Communications

KS

Calix

2009

GPON

Triple Play

ILEC

2008

GPON

Triple Play

ILEC

Pioneer Telephone Cooperative

OK, KS

Calix

OR

Calix

Plains Cooperative Telephone Association

CO

Plainview Telephone Company (Nyecom)

NE

GPON

Triple Play Voice, Data

Pine Telephone System

Pioneer Telephone Cooperative

2010

ILEC

Replace

2009

Replace

GPON

ILEC ILEC

GPON 2010

Calix

Voice, Data

BPON

ILEC Voice, Data

ILEC

Voice, Data

ILEC

Plant Telephone

GA

Calix

Planters Telephone Company

GA

Calix

2006

Greenfield

GPON, Active Ethernet

Triple Play

ILEC

Poka Lambro Telephone Company

TX

Calix

2005

Overbuild

GPON

Voice, Data

ILEC

ND, MN

Calix

2007

Replace

GPON, Active Ethernet

Triple Play

ILEC

Polar Communications

98

BPON

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

ILEC

INDEPENDENT TELCOS Provider

States

Vendor – FTTH Electronics

Start Date

Pottawatomie Telephone Company

OK

Calix

2009

Prairie Grove Telephone Company

AR

Calix

2007

Premier Communications

IA

Calix

CO, UT, NV, MS

Calix, AlcatelLucent, Enablence

2004

Greenfield

GPON, EPON

Triple Play

CLEC

PrimeLink (Champlain Telephone Company)

NY

Calix, CTDI

2002

Overbuild

EPON, GPON, Active Ethernet

Triple Play

ILEC

Progressive Rural Telephone Co-op

GA

ADTRAN

2010

GPON

Triple Play

ILEC

Project Mutual Telephone Co-op

ID

Calix, ADTRAN

2005

Overbuild, Greenfield

GPON, Active Ethernet

Triple Play

ILEC

Calix

2005

Greenfield

GPON

Triple Play

2010

Overbuild

Prime Time Communications

Greenfield/Replace/ Competitive Overbuild Greenfield

Technology

Services

Provider Type

GPON

Triple Play

ILEC

Active Ethernet

Voice, Data

ILEC

GPON

ILEC

Public Service Telephone Company

GA

Pulaski/White Rural Telephone Cooperative

IN

Radcliffe Telephone Company

IA

Calix

2009

GPON

Triple Play

ILEC

Rainbow Telephone Cooperative Association

KS

Calix

2008

GPON

Triple Play

ILEC

Rainier Connect

WA

Calix

2010

GPON

Randolph Telephone Range Telephone Cooperative (Advanced Communications Technology, Dubois Telephone Exchange) Readlyn Telephone Company

ILEC ILEC

ILEC

NC

Calix

2005

Greenfield

GPON

Triple Play

ILEC

MT, WY

Calix

2008

Overbuild

GPON, Active Ethernet

Triple Play

ILEC

IA

Calix

2008

Replace

GPON

Triple Play

ILEC

Red River Telephone

ND, MN

Calix

2005

Replace

GPON

Voice, Data

ILEC

Reliance Connects (Rio Virgin Telephone/Cascade Utilities/Trans-Cascade Telephone)

NV, OR

Calix, ADTRAN

2008

Replace

GPON

Triple Play

ILEC

ND

Calix

2007

Replace

GPON

Triple Play, Meter Reading, Security

ILEC

Reynolds Telephone

IL

Calix

2009

Replace

GPON

Triple Play

ILEC

Rice Belt Telephone

AR

ADTRAN

2009

GPON

Triple Play

ILEC

Richland-Grant Telephone Cooperative

WI

Calix

2006

Greenfield

GPON, Active Ethernet

Triple Play

ILEC

Ridgeville Telephone Company

OH

Enablence

2006

Overbuild

EPON

Triple Play

ILEC

Ringgold Telephone

GA

Enablence, Calix

2004

Greenfield

EPON, GPON, Active Ethernet

Triple Play

ILEC

Ritter Communications

AR

Enablence

2006

Greenfield, Overbuild

Active Ethernet

Voice, Data

ILEC

Reservation Telephone Cooperative

River Valley Telephone Cooperative

IA

Calix

2008

Roberts County Telephone Cooperative Association (RC Communications)

SD

Calix

2004

Rochester Telephone Company

IN

Rockwell Cooperative Telephone Association

IA

Enablence

Ronan Telephone

MT

Calix

Royal Telephone Company RST Communications

Enablence, Zhone 2002 Technologies 2007

GPON

Triple Play

ILEC

Triple Play

ILEC

Replace

EPON, GPON

Triple Play

ILEC

Replace

GPON

Triple Play

ILEC

BPON, Active Ethernet

ILEC

IA

Calix

2005

Replace

GPON

Triple Play

ILEC

SC, NC

Motorola

2010

Overbuild

GPON

Triple Play, Meter Reading, Home Automation, Security

CLEC

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

99

INDEPENDENT TELCOS Provider

RT Communications

States

Vendor – FTTH Electronics

Start Date

Greenfield/Replace/ Competitive Overbuild

Technology

Services

Provider Type

WY

Enablence, Calix

2006

Replace

GPON

Voice, Data

ILEC

RTC Communications

IN

Calix

2005

Replace

GPON

Triple Play

ILEC

Runestone Telephone Association

MN

Calix

2007

Replace

GPON

Triple Play

ILEC

Rural Telephone (Nex-Tech)

KS

Calix

2001

Replace, Overbuild

GPON, Active Ethernet

Triple Play

ILEC

Rye Telephone Company

CO

Calix

2002

Replace

GPON

Triple Play

ILEC

S&T Telephone Cooperative

KS

Calix

2008

Replace

GPON

Triple Play

ILEC

Saddleback Communications

AZ

Calix

2008

San Carlos Apache Telecom

AZ

Calix

San Isabel Telecom

CO

Calix

Sandwich Isles Telecom

HI

Calix

Santa Rosa Telephone Cooperative

TX

Calix

GPON

ILEC

GPON 2002

Greenfield

GPON

2005

Overbuild

GPON

ILEC Triple Play

CLEC

Triple Play

ILEC

GPON

ILEC

Santel Communications

SD

Enablence

2005

Overbuild

EPON

Triple Play

ILEC

SC Telcom (South Central Telephone, South Central Wireless)

KS

Calix

2002

Replace, Overbuild

GPON, Active Ethernet

Voice, Data

ILEC

Scio Mutual Telephone Association

OR

Calix

2004

Replace

GPON

Triple Play

ILEC

VA, TN

Enablence, Calix

2004

Replace

EPON, GPON, Active Ethernet

Triple Play

ILEC

Scott County Telephone Coop Sebastian (Audeamus)

CA

Calix

2009

Greenfield

Triple Play

ILEC

Shawnee Telephone Company

IL

Zhone Technologies

2010

Replace

GPON

Voice, Data

ILEC

VA, WV

Enablence, Motorola

2006

Greenfield

EPON

Triple Play, Security

ILEC

Sherwood Mutual Telephone Association

OH

Calix

Replace

GPON

Triple Play

ILEC

Sierra Telephone

CA

Calix

Silver Star Communications

WY

Calix

2005

Greenfield

GPON

Triple Play

ILEC

Siren Telephone

WI

Allied Telesis

2008

Replace

Active Ethernet

Triple Play

ILEC

Shenandoah Telecommunications

2010

GPON

ILEC

Siskiyou Telephone

CA

Skyline Membership Corporation

NC

Allied Telesis, Calix

2004

Replace

PON

Triple Play

ILEC

Sledge Telephone Company

MS

Calix

2009

Replace

Active Ethernet

Voice, Data

ILEC

Slic Network Solutions (Nicholville Telephone Company)

NY

Calix

2009

Overbuild

GPON

Triple Play

ILEC

Smart City

FL

Calix

Greenfield

BPON, GPON, Active Ethernet

Triple Play

ILEC

Smartcom Telephone

TX

ADTRAN

2010

Overbuild

GPON

Voice, Data

CLEC

Smithville

IN

Calix

2008

Replace

GPON, Active Ethernet

Triple Play

ILEC

Socket Telecom

MO

Solarus

WI

Sonic.net

CA

2010

South Central Communications

UT

Calix

2002

South Central Rural Telephone Cooperative

KY

ADTRAN

2009

South Plains Telephone Cooperative

TX

Calix

South Slope Cooperative Communications

IA

Calix

100

Replace

ILEC

2010

Triple Play

CLEC

GPON

Triple Play

ILEC

Overbuild

Fiber to Building

Voice, Data

CLEC

Greenfield

GPON

Triple Play

ILEC

Replace

GPON

Triple Play

ILEC

Greenfield

GPON

Replace

GPON, Active Ethernet

Calix

2004

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

ILEC Triple Play

ILEC

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INDEPENDENT TELCOS Provider

States

Vendor – FTTH Electronics

Start Date

Greenfield/Replace/ Competitive Overbuild Replace

Southeast Nebraska Telephone Company

NE

2009

Southeastern Indiana Telephone

IN

2010

Southern Kansas Telephone

KS

Calix

2008

Southern Light Fiber

AL

ADTRAN

2010

Southern Montana Telephone Company

MT

Calix

2009

Southwest Arkansas Telephone Cooperative

AR

Southwest Michigan Communications (Bloomingdale Telephone)

MI

Calix

Southwest Texas Telephone

TX

ADTRAN

2010

Calix

2007

Replace

2009

Replace

Spring Grove Communications

MN

Spring Valley Telephone

WI

Replace

Technology

Services

Provider Type

Voice, Data

ILEC

GPON

Voice, Data

ILEC

GPON, Active Ethernet

Voice, Data

ILEC

GPON Replace

GPON

2010 Overbuild

GPON

CLEC Voice, Data

ILEC

Triple Play

ILEC

Triple Play

ILEC

GPON GPON

ILEC Triple Play

ILEC

Triple Play

ILEC

Spruce Knob Seneca Rocks Telephone

WV

Calix

2008

Replace

GPON

SRT Communications

ND

Zhone Technologies, Calix

2008

Greenfield, Replace

GPON, Active Ethernet

ILEC

St. John Telephone Company

WA

2007

Replace

St. Paul Cooperative Telephone Association

OR

Calix

2008

GPON

ILEC

Calix

ILEC

Stanton Telecom

NE NC

State Telephone Company

NY

Calix

2009

Replace

GPON

Triple Play

ILEC

Stayton Cooperative Telephone

OR

Calix

2009

Replace

GPON, Active Ethernet

Triple Play

ILEC

Stoneham Cooperative Telephone Corporation

CO

2010

Replace

Voice, Data

ILEC

Strata Networks (formerly UBTA-UBET Communications)

UT

Calix

2007

Greenfield

GPON, Active Ethernet

Triple Play

ILEC

Stratford Mutual Telephone Company

IA

Zhone Technologies

2005

Replace

GPON

Triple Play

ILEC

CA, KS, MO

Calix, Allied Telesis, ADTRAN

2001

Greenfield, Replace, Overbuild

PON, GPON, Active Ethernet

Triple Play

ILEC

NC

Allied Telesis

2008

Replace

EPON, Active Ethernet

Triple Play

ILEC

Swisher Telephone Company

IA

Calix

2009

Replace

GPON

Sycamore Telephone Company

OH

Surry Telephone Membership Corporation

Syringa Networks

Replace

ILEC

Star Telephone Membership Corporation

SureWest Communications

2010

Triple Play

GPON

Triple Play

2009

2010

UT, ID

ILEC ILEC

2010

Overbuild

Active Ethernet

T2 Communications

MI

Calix

2005

Greenfield, Overbuild

GPON

Table Top Telephone

AZ

Calix

2010

Triple Play

ILEC

Voice, Data

ILEC CLEC

Triple Play

GPON, Active Ethernet GPON

ILEC

Tamarack Video & Telecom

ID

Calix

2008

Tatum Telephone

TX

ADTRAN

2010

Taylor Telephone Cooperative

TX

Zhone Technologies

2007

Replace

GPON

Voice, Data

ILEC

WI, MN

Calix, Ericsson

2005

Greenfield

GPON

Triple Play

ILEC

TDS Telecom

Greenfield

CLEC

Triple Play

GPON

CLEC ILEC

Tech Valley Communications

NY

Calix

2006

Overbuild

GPON

Voice, Data

CLEC

Tel West Network Services Corporation

TX

ADTRAN

2010

Overbuild

GPON

Voice, Data

CLEC

102

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

INDEPENDENT TELCOS Provider

States

Vendor – FTTH Electronics

Start Date

Greenfield/Replace/ Competitive Overbuild

Technology

Services

Provider Type

TelAtlantic

WV

Tellabs

2006

Greenfield

BPON

Triple Play

ILEC

Tele-Media Solutions

IN

ADTRAN

2010

Greenfield

GPON

Telepak Networks

MS

Calix

2005

Overbuild

GPON

Triple Play

ILEC

MS, AL, TN

ADTRAN,

2008

Replace

GPON

Triple Play

ILEC

Triple Play

ILEC

Active Ethernet

Voice, Data

CLEC

GPON

Triple Play

Telephone Electronics Corporation (TEC, Bay Springs) Telephone Service Company (Hanson Communications)

OH

Teljet Longhaul

VT

Overbuild

Teton Telecom

ID

Calix

Thacker-Grigsby Telephone

KY

Calix

Three River Telco

NE

Titonka Burt Communications

IA

Tohono O’odham Utility Authority

AZ

Toledo Telephone

WA

2004

Greenfield

GPON 2008

ILEC ILEC

Replace

ADTRAN Calix

ILEC

ILEC Active Ethernet

ILEC

2010

Replace

2006

Overbuild

GPON

ILEC GPON

Triple Play

ILEC

Overbuild

GPON, Active Ethernet

Voice, Data

CLEC

Triple Play

ILEC

Topsham Telephone

VT

Calix

2006

Transtelco

TX

Calix

2010

Tri County Telephone (TCT West)

WY

Calix

2004

Replace

GPON

Triple Play

ILEC

Triangle Communications (Triangle Telephone Cooperative, Central Montana Communications)

MT

2007

Replace

GPON, Active Ethernet

Triple Play

ILEC

TriCounty Telecom

NC

2009

Greenfield, Replace

GPON

Triple Play

ILEC

Tri-County Telephone Association

KS

Calix

2009

Replace

GPON, Active Ethernet

Triple Play

ILEC

TrioTel Communications (McCook Cooperative)

SD

Calix

2009

Replace

GPON

Triple Play

ILEC

Troy Cable

AL

Hitachi

2008

Overbuild

RFoG

Triple Play

CLEC

Trumansburg Telephone

NY

Tellabs, Calix

2009

Replace

GPON, Active Ethernet

Triple Play

ILEC

Truvista Communications

SC

Calix

GPON

Triple Play

ILEC

TSC

OH

Calix

2003

Overbuild

GPON

Triple Play

ILEC

Tularosa Basin Telephone Company

NM

Calix

2006

Replace

Active Ethernet

Triple Play

ILEC

Twin Lakes Telephone Cooperative

TN

ADTRAN

2008

Replace, Overbuild

GPON

Triple Play, Security

ILEC

Twin Valley Telephone

KS

Allied Telesis

2006

Replace, Overbuild

Active Ethernet, EPON

Triple Play

ILEC

Union River Telephone Company

ME

Calix

2008

Replace

GPON

Voice, Data

ILEC

Union Springs Telephone

AL

Calix

2001

Replace

GPON, Active Ethernet

Triple Play

ILEC

Union Telephone

NH

Enablence

2007

Replace

Active Ethernet

Triple Play

ILEC

United Telephone Association

KS

Calix

2010

GPON

Triple Play

ILEC

United Telephone Company

TN

Calix

2004

Greenfield

GPON

Triple Play

ILEC

United Telephone Mutual Aid Corporation

ND

Allied Telesis, Calix

2008

Replace

Active Ethernet

Triple Play

ILEC

Overbuild

BPON

Triple Play

CLEC

United Telesystems

GA

Alcatel-Lucent

2003

Upper Sioux Community

MN

Calix

2009

Upsala Cooperative Telephone

GPON

ILEC

MN

Calix

2010

GPON

Voice, Data

ILEC

US SONET

IL

Enablence

2003

Overbuild

PON

Triple Play

CLEC

Valley Telecom Group

AZ

Enablence

2005

Replace

EPON, GPON, Active Ethernet

Triple Play

ILEC

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

103

INDEPENDENT TELCOS Provider

States

Vendor – FTTH Electronics

Start Date

Greenfield/Replace/ Competitive Overbuild

Technology

Services

Provider Type

Valley Telecommunications Cooperative

SD

Calix

2008

Replace

GPON

Triple Play

ILEC

Valley Telephone Cooperative (VTCI, VTX Telecom)

TX

Enablence

2005

Greenfield, Replace, Overbuild

GPON, Active Ethernet

Triple Play

ILEC

Velocity Telephone

MN

2010

Overbuild

Active Ethernet

Triple Play

CLEC

Venture Communications Cooperative

SD

GPON

Venus Telephone Company

PA

Veracity Networks

UT

Vermont Telephone

VT

Vernon Telephone Cooperative

WI

Calix

2006

Replace

2010

Replace

Telco Systems

2005

Greenfield

Calix

2007

Replace

Triple Play

ILEC

Triple Play

ILEC

Active Ethernet Triple Play, Gaming

CLEC

BPON, GPON, Active Ethernet

Voice, Data

ILEC

Triple Play

ILEC

Volcano Telephone

CA

Calix

2010

Wabash Mutual Telephone

OH

Enablence, Calix

2005

Replace, Overbuild

EPON, GPON, Active Ethernet

Triple Play

ILEC

IL

Calix

2010

Replace

GPON

Triple Play

ILEC

Enablence

2007

Greenfield

Active Ethernet

Voice, Data

Wabash Telephone Cooperative Wahkiakum West Telephone

WA

Waitsfield and Champlain Valley Telecom (Waitsfield-Fayston Telephone Company)

VT

GPON

ILEC

Replace

ILEC ILEC

Walnut Communications

IA

2009

Overbuild

Wamego Telecommunications

KS

Calix

2002

Replace

GPON

Triple Play

ILEC

Warwick Valley Telephone Communications

NY

Enablence, Calix

2006

Overbuild

GPON, Active Ethernet

Triple Play

ILEC

Webster-Calhoun Cooperative Telephone Association

IA

Calix

2005

Replace

GPON

Triple Play

ILEC

West Carolina Tel

SC

Calix

2008

Replace

GPON, Active Ethernet

Triple Play

ILEC

West Central Telephone

MN

Calix

2005

Replace

PON

Triple Play

ILEC

2010

Replace

Triple Play

ILEC

Triple Play

ILEC

West Kentucky Rural Telephone Cooperative

TN, KY

ILEC

West Plains Telecommunications (Five Area Telephone Cooperative)

TX

CTDI

2006

Replace

EPON

West River Cooperative Telephone Company

SD

Calix

2007

Replace

GPON

West Texas Rural Telephone Cooperative (WT Services)

TX

Calix

2007

Overbuild

GPON

West Wisconsin Telcom Cooperative

WI

Calix

2007

Replace

GPON

Westel Fiber

ID

Greenfield

ILEC Triple Play

ILEC

Triple Play

CLEC

ILEC

WesTel Systems

IA

Calix

2009

GPON

ILEC

WesTex Telephone Cooperative & Telecommunications

TX

ADTRAN

2010

Active Ethernet

ILEC

Westphalia Telephone (Clinton County Telephone Company)

MI

Calix

2006

Overbuild

GPON, Active Ethernet

ILEC

Wide Open West (Sigecom)

IN

Motorola, Calix

2001

Overbuild

GPON

Triple Play

CLEC

Wiggins Telephone

CO

Calix

2008

Replace

GPON

Voice, Data

ILEC

Wikstrom Telephone Company

MN

Calix

2010

Replace

GPON, Active Ethernet

Triple Play

ILEC

Wilkes Telecommunications

NC

Allied Telesis

2009

Replace

Active Ethernet

Triple Play

ILEC

Wilkes Telephone & Electric

GA

Calix

2006

Replace

GPON

Willard Telephone

CO

2010

Replace

104

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

Triple Play

ILEC

Voice, Data

ILEC

INDEPENDENT TELCOS Provider

States

Vendor – FTTH Electronics

Start Date

Greenfield/Replace/ Competitive Overbuild

Technology

Services

Provider Type

KS

ADTRAN

2010

Replace

GPON

Triple Play

ILEC

AL, AR, FL, GA, KY, NE, NC, SC, TX

Calix

2006

Greenfield

GPON

Voice, Data

ILEC

Windwave Communications

OR

Calix

2004

Overbuild

PON

Triple Play

CLEC

Winn Telephone

MI

Calix

Overbuild

BPON

IA, MN

Calix

GPON

Wittenberg Telephone

WI

Calix

BPON

WNM Communications

NM

ADTRAN

2010

IL

Calix

2010

MN

Tellabs

2008

Replace

GPON

Triple Play

ILEC

TX, LA

Calix, ADTRAN

2003

Greenfield, Overbuild

GPON

Triple Play

CLEC

Replace

GPON

Triple Play

ILEC

GPON

Triple Play

ILEC

Voice, Data

ILEC

Wilson Communications Windstream Communications

Winnebago Cooperative Telecom Association

Woodhull Telephone Company Woodstock Telephone Company XFONE (NTS, Pride Network)

Active Ethernet Replace

XIT Rural Telephone Cooperative

TX

Calix

2008

Yadkin Valley Telecom

NC

Zhone Technologies

2007

Yucca Telecom (Roosevelt County Rural Telephone Cooperative)

NM

Calix

2005

Replace

GPON Active Ethernet

Zial Networks

ID, UT

2003

Greenfield, Overbuild

Zito Media

PA

2008

Overbuild

Zona Communications

AZ

2005 T:8.125”

Greenfield

Calix

GPON

ILEC Triple Play

ILEC ILEC

Voice, Data, Business Services

ILEC

Triple Play

ILEC

Triple Play

CLEC

Voice, Data

CLEC

Voice, Data

ILEC

Virtually invisible. Just like the One Pass Mini.

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It’s small, discreet (practically invisible) and incredibly versatile. The One Pass Mini uses 3M adhesive to stick to almost any wall surface, including painted concrete. The One Pass Mini delivers triple play services inside a residence and can be used with or without the 3M™ One Pass Fiber Pathway hallway solution, part of the 3M Total Package. To see it for yourself, visit 3M Booth #314 at the Broadband Properties Summit

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March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

105

INDEPENDENT TELCOS

Modeling the Cost Of Rural Fiber Deployment An important new study of independent telco FTTH deployments provides a cost model that both providers and policymakers can use. By Masha Zager ■ Broadband Properties

I

n 2009 and early 2010, the Omnibus Broadband Initiative team that developed the National Broadband Plan for the Federal Communications Commission released estimates of the cost of deploying fiber to all American homes. These estimates, which seemed surprisingly high to people who had experience with FTTH buildouts, convinced policymakers – and the news-

Vantage Point Rises to the Challenge Vantage Point Solutions, an engineering firm based in Mitchell, S.D., has extensive experience designing FTTH networks. When Larry Thompson, Vantage Point’s CEO, studied the FCC numbers, he concluded that they did not reflect his experience of rural construction costs. Vantage Point was then working

Mining its extensive database of rural fiber-to-the-home deployments, the engineering firm Vantage Point Solutions developed a cost model that is generally applicable to rural areas of the United States. paper-reading public – that fiber to the home should not be an important part of the plan. Of course, there was dissent. For example, Calix, the FTTH electronics vendor that has worked with more than half the rural telcos deploying fiber in the U.S., presented evidence to the FCC that its estimates were too high. Broadband Properties discussed the unreasonableness of the FCC’s numbers in these pages and in Take It to the Bank, the editor’s blog on www.bbpmag.com. However, no solid basis existed for estimating actual costs – or for deciding, from a policy standpoint, in which areas fiber deployment made sense.

106

with the Nebraska Rural Independent Companies, a group of 19 telcos, to prepare comments on FCC notices of proposed rulemaking. Thompson recalls, “When we sat down with the Nebraska group, rather than complaining, we asked what we could do that was better.” The group decided to sponsor an analysis of FTTH deployments by 63 independent telcos for which Vantage Point already had detailed data and then

develop a model that could help predict costs of future rural fiber deployments. The available data was for network builds in 227 rural areas and 209 town areas. (The towns are typically small towns outside metropolitan areas.) In addition to Vantage Point, several other firms participated in the study: Consortia Consulting of Lincoln, Neb.; Rolka, Loube, Saltzer Associates of Harrisburg, Pa.; and Stone Environmental of Montpelier, Vt. Deployment Costs – What Was Included For the analysis, Vantage Point considered the cost in each area of engineering the network, purchasing and installing electronics for central offices and customer premises, purchasing spare parts and miscellaneous materials, and purchasing and installing mainline and drop fiber optic cables and fiber management equipment. Mainline fiber cables were generally sized to accommodate anticipated growth. Vantage Point did not consider the costs of upgrading middle-mile networks, even though such upgrades are needed in many areas to enable FTTH networks to deliver high-speed Internet connections at a reasonable cost. Thompson explains that because the policy debate centered on the local loop, his primary concern was to estimate the costs involved in upgrading local loops.

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

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

INDEPENDENT TELCOS Nearly all the deployers in the Vantage Point study had used direct-buried fiber, though they had placed some fiber in existing conduit in town areas and strung a small amount on utility poles. In addition, nearly all deployers dedicated a fiber from the central office to each customer, either because they had placed their PON splitters in central offices or, in a few cases, had used pointto-point technology. Analysis of Vantage Point Records In addition to cost records, Vantage Point had access to other critical data – physical measurements of the lengths of fiber deployed as well as the number of locations (homes, businesses or multiple dwelling units) that were connected to fiber. In most cases, there was one subscriber per location. To begin the analysis, Vantage Point compared overall, inflation-adjusted costs for each of the 436 areas with the number of locations per square mile and per route mile. As the graph shows, the cost per location was strongly related to density. Linear density (locations per route mile) proved to be a much better predictor of costs than area density (locations per square mile) – a finding that accords with common sense, even though area density is the measurement more commonly used in telecommunications planning. A regression analysis yielded the following cost equation: Cost per location = $4,430 + $12,911 * (route miles/locations) In other words, for each subscriber location there is a large fixed cost for equipment, installation and so forth, plus a share of the cost of the outside plant, which takes the fiber from the central office to the subscriber location. In this study, the outside plant for all 436 deployments accounted for about 58 percent of the total construction cost, but in any particular area, the cost per location of outside plant depended on how many locations shared the cost. In a town, the second component may be very small, and therefore the cost per location is relatively low – even though outside-plant costs per mile are

Cost per Location by Route Density

actually much higher in towns because town projects require more conduit, more frequent road crossings and more coordination with other utilities. Out in the country, the cost per mile is lower, but with few locations on each route, the cost per location may be very high. Because the population density varied so much, overall costs per location were double in the rural areas – $9,286 compared with $4,438 in towns. The explanatory power of this equation was very high: R-squared is 0.87, meaning that linear density alone explains 87 percent of the variation in cost per location. Using Public Data Performing this initial analysis demonstrated that the costs of FTTH deployment were highly predictable. However, the model does not actually help telcos or government agencies predict fiber deployment costs unless they first count the locations to be connected and then

design and measure fiber routes to all those locations. For a model to be generally applicable, it would have to make use of readily available data rather than requiring an engineering study of each potential deployment area. Thus, Vantage Point’s next step was to identify public variables that correlated closely with the variables in its model. For the number of locations, the company tried substituting the number of households as measured by the U.S. Census Bureau. This approach would not have worked in metropolitan areas, where households typically can choose among two or three broadband providers and many do not take fiber services. However, in the rural regions covered in this study, the number of subscriber locations is closely related to the number of households. Thompson explains, “Most of these deployments were by incumbents whose cables were 40 years old and needed to be replaced, so they put a

For a model to be generally applicable, it has to make use of readily available data rather than requiring an engineering study of each potential deployment area.

March/April 2011 | www.broadbandproper ties.com | BROADBAND PROPERTIES |

107

INDEPENDENT TELCOS Thompson hopes to augment the model with data from additional deployments. Rural FTTH deployers that would like to contribute data are invited to participate. drop in every location. We were assuming there would be 100 percent service.” That assumption proved to be valid. Changing the “locations” variable to “households” caused very little change in the cost model. To replace the number of mainline fiber route miles with a public variable, Vantage Point first substituted road miles, based on GIS data and a national database of streets. This substitution assumed that houses or businesses were located along every road in the area and that fiber could be deployed along all roads. As it turned out, these assumptions were not entirely accurate. Vantage Point then adjusted the road mileage to eliminate unpopulated areas and road types that were unlikely to support utility rights-of-way. With census households and adjusted road miles replacing locations and mainline fiber route miles, the equation changed slightly: Cost per household = $5,042 + $13,134 * (adjusted road miles/ households) Refining the Model Using the new equation, any rural telco could now estimate fiber deployment costs from readily available data without doing an engineering study – a great benefit. However, the explanatory power of

the new equation was not quite as good as that of the original equation; it accounted for only 82.5 percent of the variation in FTTH construction costs, compared with 87 percent for the first equation. So Vantage Point looked for additional variables beyond road miles per household that might help it estimate deployment costs more precisely. After testing a number of possibilities, the company identified the total number of households, the frost index, the percentage of wetlands, the soil texture and the number of intersections as statistically significant variables. All had small effects on total cost, compared with the effect of route density. Still, adding them into the equation raised the model’s explanatory power back to nearly 87 percent. The final cost modeling equation looks like this: Cost per household = $3,072 + $13,365 * (adjusted road miles/ households) - 0.8867 * households + $25.04 * frost index + $17,700 * wetlands percentage + $1,376 * soils texture + $165.40 * road intersection frequency The absolute number of households has a small negative effect on cost per household because there is an economyof-scale effect – managing a larger project is slightly more cost-efficient than managing a smaller project.

Resources and call for participants Detailed reports from Vantage Point about this cost-modeling project are available on the Rural tab of the Broadband Properties website at www. bbpmag.com/mt12.php. To participate in the project by contributing data about additional FTTH deployments, contact Larry Thompson at [email protected].

108

The remaining four variables reflect physical conditions that make construction more difficult: Frost days shorten the construction season. Fiber construction in wetlands requires additional approvals and specialized techniques. Rocky soils and certain kinds of dense soils are harder to dig. Finally, road intersections slow fiber construction and impose other costs. Using the Model In January, Thompson, along with another consultant who participated in the study and two representatives of the Nebraska Rural Independent Companies, presented the model to staff members of the FCC Wireline Competition Bureau. They explained that the model could help rural providers predict capital expenditures and could help policymakers evaluate the national cost of deploying a highcapacity terrestrial broadband network. In addition, they said, the model could be used to develop an upper limit on “reasonable” capital expenditures for telcos subject to rate-of-return regulation and to help choose among competing recipients in light of funding limitations. “We were very warmly received by the FCC,” Thompson says. “The FCC was extremely positive. They were very excited – they’d never seen any sort of analysis with the level of accuracy that we appear to have.” Thompson hopes to continue the study to make the model still more useful. “There are rough edges we’re working to refine,” he explains. For example, the “soils texture” variable does not seem to reflect actual costs in rocky and clay soil areas, and an enhanced measure of soil difficulty might improve the model’s accuracy. Most important, however, is augmenting the data set with results from additional deployments. One limitation of the current data is that the 63 telcos whose data was used are located in 15 upper central and southeastern states. The West Coast, Southwest and Northeast are not well represented, and the model may be less applicable to those regions. Vantage Point has invited other engineering companies and telcos to contribute their data and help build a truly national cost model. BBP

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

Incorporating Broadband Properties Change effective with annual

May-June Municipal Issue We urge you to subscribe today— FREE to those who qualify. With our new name, BRoadBand CommunitiEs will continue to be the leading source of information on digital and broadband technologies for buildings and communities. In every Issue, we will continue to offer in-depth news, expert insights, and practical know-how on all aspects of outfitting properties and communities with broadband solutions. Our editorial aims to accelerate the deployment to Fiber-To-The-Home and Fiber-To-The-Premises while keeping readers up to date on the available solutions capable of serving their practical needs.

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every issue is filled with valuable articles on Technology, Finance, Law and Marketing. We urge you to subscribe today — for Free!

www.bbpmag.com • 877.588.1649

Technology

Making the Most Of a Fiber Network An all-fiber network isn’t just a high-powered version of a traditional copper network. It offers entirely new opportunities – and poses entirely new challenges as well. By Irit Gillath ■ Telco Systems

C

reated in 1953 to provide telephone service to residents in remote areas of Alaska, Matanuska Telephone Association (MTA) was challenged to meet the bandwidth needs of its customers, who span a 10,000-square-mile area from just north of Anchorage to just south of Fairbanks. It found a solution by replacing copperbased services with optical fiber. Just five years ago, MTA began offering transparent LAN and Metro Ethernet services to schools and businesses, and it has now started to connect cell

nue or aiming to improve services to the community may find it can leverage its investment in fiber to create a multiservice Ethernet network that can support customers for many years to come. Serving business customers Even though residential services continue to grow and new customers sign up for services every day, return per residential customer is not high. However, business customers are also looking for new broadband services and are willing to pay for them accordingly. Companies want higher data speeds,

Business customers are looking for new broadband services, such as off-site storage and cloud computing, and are willing to pay for them. sites with fiber. Today, MTA supports a true multiservice offering that provides residents, corporations, government entities and mobile operators a secure and reliable Carrier Ethernet network. Matanuska leveraged its investment in fiber to offer a diversified portfolio of services that extends well beyond fiber to the home, fulfilling its mission to provide state-of-the-art, reliable and competitively priced communications that contribute to community economic development. As Matanuska’s example shows, any company seeking new sources of reve-

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both upstream and downstream. They also want higher quality of service to enable applications such as off-site or online storage, cloud computing, Webbased training and support services, customer portals and high-definition videoconferencing.

According to research firm Vertical Systems Group in its August 2010 Global Provider Ethernet Leaderboard, “Demand for global business Ethernet services was solid in the first six months of 2010. … Projected double-digit port growth rates remain on target for 2010 across all regional Ethernet services markets.” There’s a good reason for that growth: Ethernet is no longer just an enterprise best-effort technology but has moved into the carrier networks, where it is displacing legacy time-division multiplexing (TDM) technology. The Carrier Ethernet services market is in the growth phase of its product life cycle because of the standardization of switched Ethernet products such as Ethernet virtual private line (EVPL) and virtual private LAN service (VPLS). Carrier Ethernet Challenges and Solutions Corporations may require their service providers to commit to the level of the service promised, demanding assured service rather than best-effort service. In some cases, they require a service-level agreement (SLA) for each service they purchase based on the criticality of the service to business operations, application

About the Author Irit Gillath is vice president for IP product line management and business development at Telco Systems, which specializes in Carrier Ethernet solutions. You can reach her at 785-843-0695 or by email at [email protected]. Find out more at www. telco.com.

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

Technology latency and packet-loss requirements, and other considerations. In the last 10 years, many standards organizations, including the Institute of Electrical and Electronic Engineers (IEEE) and International Telecommunication Union Telecommunication Standardization Sector (ITU-T), as well as industry groups such as the Metro Ethernet Forum (MEF), have finalized technologies to support the demanding requirements of the carrier market. These include link, transport and service operations, administration and maintenance (OAM) schemes. By ensuring that the solutions they deploy adhere to approved standards for OAM test and measurement applications, providers can guarantee that their networks will support the levels of service promised and will do so even when network equipment is supplied by multiple vendors. Providers in the United States also continue to maintain legacy T1 services to businesses and cannot risk cannibalizing this service offering while they migrate to IP networks. Carrier Ethernet offers service providers an opportunity to migrate TDM traffic onto a fiber-based IP network through the use of pseudowire or circuit-emulation services. Voice can be transformed into VoIP, and a provider can consolidate voice, video and data over a single, highly resilient network capable of scaling well beyond 10GE. Mobile Backhaul Services As more and more customers adopt smartphones and use them for a growing number of services, the mobile telecommunications market is experiencing unprecedented growth. The smartphone applications market is booming, and hundreds of new apps are introduced every day. This growing number of services and devices is creating an explosive demand for bandwidth. In fact, according to a recent report by industry analyst Chetan Sharma of Chetan Sharma Consulting, total U.S. mobile data traffic was projected to exceed 1 exabyte (1 billion gigabytes) for the first time by the end of 2010. Sharma also predicted that the average

Fiber is the optimal architecture for mobile backhaul in most areas. It overcomes the distance limitations of copper and the load sharing and aggregation challenges of microwave. U.S. consumption of mobile data would reach about 325 MB per month, reflecting a 112 percent increase from 2009. In the third quarter of 2010, the U.S. mobile data market grew 25 percent to total about $14 billion, thanks to continued heavy demand for smartphones. But while mobile traffic is going up, revenue is going down. Data now accounts for about 33 percent of the average revenue per user (ARPU) for U.S. operators. To minimize the cost of delivering these services and improve ARPU while providing the bandwidth scalability to meet future needs, mobile providers must switch to Ethernet-based backhaul. To provide sufficient bandwidth to smartphone users, mobile providers have to increase the bandwidth they deliver to every cell tower. Many backhaul technologies are in use today. Which one is used in any area depends on its geography, topology, datacom history, climate and population density, as well as the mobile operators serving the area and other market conditions. The technologies most commonly deployed are copper, microwave and fiber. Copper can provide capacity of up to 100 Mbps but may actually deliver lower bandwidth and has significant distance limitations. The quality and reliability of service is dependent on how well the infrastructure is maintained. Scalability is limited, as is availability of additional copper. On the other hand, copper does support native TDM and Ethernet. Microwave offers very high reliability at a moderate cost. It can provide the higher bandwidth that mobile providers need, but its capacity is dependent on the distance between the antennas and on the topology and climate of the service area. Fiber provides the highest capacity – it can easily offer more than 10 Gbps per

link over practically unlimited distance. The distance that the signal will carry without degrading is determined by the electronics used for the link rather than the medium itself, which in turn makes this medium future proof. It offers very high reliability and the ability to combine TDM and Ethernet. The optimal backhaul architecture solution will probably be fiber, combined with microwave for remote areas. In fact, because some fiber solutions actually overcome the load sharing and aggregation challenges experienced with microwave, fiber is even more effective for this application. Mobile Backhaul Challenges and Solutions Mobile backhaul involves quite a few challenges. Any radio access network generally contains multiple generations of cellular technologies from different vendors, each based on a different standard. Although some newer sites may have only the latest cellular standard, most existing sites maintain some remnants of older technology and off-load only data onto the new generation of technology. As a result, one of the most important requirements for backhaul solutions is to be able to interconnect with multiple generations of mobile technology within a site and across multiple cell sites, supporting multiple protocols over the same transport infrastructure. Unlike residential FTTH, in which each link serves only small number of end users, a single cell site can serve a very large number of end users. Network failure is not acceptable, and even small errors in backhaul provoke service calls. Therefore, resiliency and network redundancy are critical requirements. Newer standards, such as G.8031 and G.8032, which allow for sub-50

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Technology Operators can support legacy T1 circuits by using pseudowire, circuit emulation or TDM over IP on their fiber infrastructures. millisecond switching of a service or path to an alternative route once the quality falls below a specific threshold, is becoming extremely attractive to mobile operators. Cell sites, like many commercial applications, must support legacy T1 circuits for the older mobile technologies in many sites. Once again, providers can support T1 without maintaining costly copper connections by using pseudo­ wire, circuit emulation or TDM over IP on fiber infrastructures. Finally, clock synchronization poses a major challenge for backhauling multiple cell site technologies. Although 2G and 3G technologies typically use frequency-division duplex (FDD) multiplexing, which requires frequency synchronization, 4G technologies such as LTE and WiMAX are time-division multiplexed and require both frequency and phase synchronization. There are several ways to maintain base station timing and synchronization. Among the schemes commonly found in this market are the following: • IEEE 1588v2 is a packet-based protocol and is carried in-band with user traffic. It can support highly accurate frequency and phase synchronization required by 4G technologies. In addition, devices in the path that do not support 1588v2 will transparently pass the protocol, eliminating the need to replace these devices while allowing sync requirements to be met. However, 1588v2 can be affected by network congestion if it is not properly prioritized across the path. • Sync-E (based on ITU-T G.8261) is a physical layer technology and is not affected by network congestion. However it requires that every node in the path have hardware support for Sync-E. Unfortunately, Sync-E does not support phase synchroniza-

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tion, so in order to support 4G technologies, Sync-E needs to be supplemented by 1588v2 or some other mechanism to provide the phase synchronization requirement. • GPS-based synchronization uses timing received from satellites, which presents installation, reception and security concerns. Additional requirements and challenges include the ability to easily configure end-to-end services, remotely manage and maintain the equipment and monitor and report on service assurance using a simplified management solution. Enabling and Scaling Multiple Services As providers deploy a wider range of services to mobile devices, businesses and homes, they need unified networks that support the requirements of these services at a cost that enables them to maintain, or even increase, their ARPU. One way to unify a multiservice network is through multiprotocol label switching (MPLS), a mechanism for forwarding packets based on their labels without having to examine the packets themselves. This enables multiple protocols and services to coexist easily – service providers can carry many different types of traffic, such as L2 Ethernet, supervisory control and data acquisition (SCADA), TDM and Asynchronous Transfer Mode (ATM), using the same

transport protocol while guaranteeing a different service level for each service and each customer or endpoint. MPLS also offers options for carriers to optimize their infrastructures by using sophisticated management techniques such as VPLS and hierarchical VPLS (HVPLS) in the access network. In a LAN data network, virtual local area networks (VLANs) are used to separate different services and customers. However, VLANs are limited to 4K (4,096) per trunk and thus are not very scalable in a metro network in which a service provider may have tens of thousands of services and customers. To address this limitation, many providers are looking to distribute network intelligence outward from the core MPLS network and move it closer to customers. Placing more intelligent devices in the access network saves core network resources (CPU cycles, expensive ports and bandwidth), allows the network to scale to provide significantly more services to more customers, and makes the network more deterministic. By incorporating MPLS and related technologies such as VPLS and hierarchical quality of service (HQoS) into the access network, the network can scale to support up to 1 million individual services and customers and provide more granular classes of service. Operational Challenges for Multiservice Networks Providers must continue to serve customers who are satisfied with the status quo as well as those who demand new services. Thus, they need to design networks that can offer both legacy-based, TDM services and next-generation, packet-based services. However, next-generation services can be difficult to manage. Even though

Moving intelligence from the core network to the access network allows the network to scale to support up to 1 million services and customers and provide more granular classes of service.

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Technology Metro Ethernet standards have evolved to help service providers configure multivendor, high-bandwidth networks that are equipment-agnostic, they also make Ethernet networks more complicated to configure and provision. Supporting packet-based network services can represent a significant challenge for existing staff who may be more familiar with TDM or LAN networks. Therefore, a significant challenge is to simplify installation, service turn-up, service validation, service monitoring, and fault isolation and minimize the number of devices that must be programmed to turn up a new customer service. Sophisticated network management tools make this an easier task and create a better user experience for subscribers and operators alike. Equipment energy requirements can also be a large part of the overall operational costs of the network. The solution must support the features required for the service and do so as efficiently as

Commercial services and mobile backhaul offer new revenue streams from fiber infrastructure. The tools, products and solutions are available to take advantage of this opportunity. possible to minimize electricity usage. Deploying a multiservice metro Ethernet network requires a delicate balancing act between product cost and operational cost. Making efficient use of both network and personnel resources can minimize costs, maximize customer benefits and increase potential revenues. Summary Commercial services and mobile backhaul offer a huge opportunity to use existing fiber infrastructure to realize new revenue streams. Solutions are available to overcome the challenges presented in this article, and many providers are

already deploying them. Implementing MPLS at Layer 2 reduces opex and capex and enhances Ethernet service scalability, traffic engineering and robust network resilience by using redundant ring topologies with path protection. Other standards, such as MEF-certified and standards-based OAM, allow providers to manage, monitor and report adherence to customer SLAs and optimize network transport performance. The opportunity is out there, and the tools, products and solutions are available. Is your company going to take advantage of it? BBP

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Fundamental FTTH Planning and Design: Part 2 Configuration of fiber feeder routes has a great impact on deployment cost – and the principles aren’t at all intuitive. By David Stallworth ■ OFS

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art 1 of Fundamental FTTH Planning and Design (in the January/February issue of Broadband Properties) discussed the positioning of central offices (COs), nodes, splitter cabinets, splitters and drop closures. This article focuses on configuring the fiber routes out of these facilities. The same study technique we used for positioning network elements can be used to determine the ideal configurations for fiber feeder routes. Figure 1 shows the two kinds of feeder cables – a main feeder, which originates in a CO, node or cabinet, and branch feeders, which terminate in a main feeder cable. Suppose a CO, node or cabinet has been placed in the middle of its service area. How many cables should come out of it, and how should they be routed? This is a very serious question, as the answer can significantly affect total cost. Figure 2 shows some possible variations in feeder route design. We studied these and other variations to determine the most economical configuration for the main and branch feeder routes. Figure 3 shows the ideal configuration we developed six years ago after extensive study and verified with 150,000 homes passed. With four main feeder routes from the CO or node, this design serves an equal number of facilities on each route and minimizes the sum of the distances to customer locations.

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The figure also shows how branch feeder routes should be deployed. Notice that they are perpendicular to the main feeder routes, not parallel to them. Paralleling a main route may require building more infrastructure to reach the same number of customers.

Figure 1: Main and Branch Feeders

Setting Boundaries The last item to discuss is the designation of boundaries between the feeder routes. Note the boundary lines exiting the CO at 45-degree angles

Figure 2: Possible Feeder Route Configurations

About the Author David Stallworth is the design and product manager at OFS, a manufacturer of optical fiber and connectivity solutions. You can reach him at 770-798-2423 or by e-mail at [email protected].

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

Technology The ideal configuration for fiber routes involves four main feeder routes placed at 90-degree angles to one another, with branch routes perpendicular to them. Of course, the real world is a little more complicated. to the end of the study area. These separate the routes and define which route will serve each customer. Placing boundaries allows a designer to identify the area served by each main feeder and makes planning for future demand easier. The boundaries also serve to minimize the distance from the CO to each customer. There is no ideal number of branch feeder routes. The number used depends on the density and size of the area and sometimes also on whether splitters are centralized in cabinets or distributed in each PON area. Branch feeder routes are also determined by road configuration and the number of units served in each area. Generally, a single branch feeder should serve an area that is consistent in nature. For example, serving a business area and a residential area with two separate branch feeders may be a good idea. This requires establishing a branch feeder route boundary between residential and business areas and placing two branch routes with different paths from the main feeder into these two areas. However, the goal of creating uniform service areas must be balanced against the competing goal of keeping the total number of branch feeders low to minimize infrastructure and cable cost. Street layout further limits the choices for feeder routes. Good engineering judgment is vital in establishing the branch feeder routes properly. Locating the main feeder route relative to the main feeder boundaries is very important. Generally, the most economical place for a main feeder route is in the middle of the area it is going to

Figure 3: Ideal Feeder Route Design

serve. This keeps the branch feeders relatively short and helps reduce total length to the CO in the long run. In the same way, a branch feeder route should bisect the area this feeder will serve. Nature follows the same principle – a river or creek generally runs through the middle of the valley it drains. Subdividing the Areas Once the main feeder and branch feeder routes have been established along with the associated boundaries, the areas defined by the branch feeder route boundaries can be further divided up into small serving areas. These serving areas are defined by the size of the facilities that will serve them. For instance, if a PON technology is used and the optical splitters will be deployed in field cabinets, each branch feeder area can be divided into cabinet serving areas (CSA). Creating the CSAs may require some boundary adjustment so that the number of homes served by each cabinet is roughly equal. The size of each CSA is determined by the size of the cabinets to be deployed.

(The optimum cabinet size for most urban areas is between 256 and 288 homes). Therefore, it is important to determine cabinet size before designing CSAs. If an optical splitter is to be deployed in each 32-customer PON area, the area should be subdivided into 32-customer PON areas. If a switched Ethernet solution is to be deployed, the cabinets will not hold splitters but rather will act like cross boxes in the copper world, distributing and adding feeder as needed. In either case, once the cabinet size is known, feeder areas can be divided into appropriate sizes and each cabinet can be located in the middle of the area it serves. A Typical Application Applying the ideal configuration to an actual area is, of course, somewhat more complicated. The map in Figure 4 depicts the major portion of a town we’ll call Fiber City. Several items of interest show up in the map. First, the railroad tracks (green east-west lines) split the city into two different demographic areas. The area north of the tracks has a lower-income population in smaller living units. The area south of the tracks consists of the downtown, with commercial buildings and higher-end residential areas. The CO that serves Fiber City is located downtown. This location, the central point for terminating all the fiber, has ample floor space for fiber termination bays and associated equipment. It is located near the geographical center of the town, although the town is growing mainly in the south. The malls are located to the east of the central town

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Technology

Figure 4: Fiber City Before Fiber

area and are surrounded by a large commercial area. Fiber City has two other telephone office locations south of the downtown area and CO. These two office locations will be interconnected with the CO in a ring configuration. The Fiber City Design Natural and manmade structures often make very good boundaries for feeder routes. The difficulty of crossing these structures limits options for serving locations on the far side – which is true of the railroad tracks in Fiber City. Also, keeping different types of areas separate is useful when deployment time approaches. Establishing the railroad tracks as boundaries helped minimize the numbers of crossings needed except for possible ring configurations between feeder routes. The east-west routes of the railroad tracks in Fiber City were selected as route boundaries for the these reasons. Four feeder routes were extended from the downtown CO, with the northern route slightly bent to the right to take advantage of the large number of apartments north of a university. Density pulled the route in that direction, as the area directly north of the CO does not extend very far and is not densely populated.

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The feeder route to the east extends into the industrial park occupied by several large industries. This route also feeds a large portion of the commercial area around the two malls. The southerly feeder route was initially developed in a direction directly

Blue = Main feeder Yellow = Feeder boundaries

south of downtown but was later adjusted to include existing fiber routes and the two Fiber City telephone offices located in the south serving area. The westerly route was selected to be approximately in the middle of the western area. It extends into the rural area to connect to a trunk route to another city. Boundaries between the eastern and southern routes were selected to provide a middle break between the routes, as was the boundary between the southern and western feeder routes. The map in Figure 5 shows the final plan for Fiber City’s fiber network, which can ultimately serve every living unit in the town. The plan also shows the number of fibers needed for each main and branch feeder, based on the number of units served divided by 32. To arrive at an estimate of the total fiber needed, this base number was multiplied by 1.5 and added to the number of trunk fibers needed for connections to other towns. This 1.5 multiplier was requested by Fiber City; the appropriate multiplier may vary for each route, depending on growth assumptions. It’s a good idea to

Legend: Light blue = Branch feeder Figure 5: Fiber City – The Final Design

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Technology study growth patterns for each route and decide how many fibers will be needed for new developments. The local governing authority may have developed land usage plans that can help forecast growth patterns for each area. Not all these fibers need to be placed at the outset ­– the procedure simply provides a way to calculate how many fiber cables will be needed eventually so the supporting infrastructure (conduit, handholes, aerial strand, innerduct and so forth) can be determined. For example, a company may decide to size its main feeder cables to last 10 to 15 years while sizing branch feeder cables to accommodate long-term growth. Budget limitations and engineering judgment can be combined to arrive at the best solution. Finally, fundamental fiber planning should include provisions for all types of future services. For example, planners should consider the possibility that high-end data users may require diverse

Today’s FTTH platforms support both active Ethernet and PON from the same chassis. Planners should take advantage of this capability and use the right technology in the right place for the right customers. routes to ensure 24/7 connectivity. To accommodate these potential users in a plan developed primarily for PON service, including a buffer tube of 12 fibers or more for active Ethernet service may be advisable. A fiber ring for users that require redundant routes can be developed by connecting two branch feeders from two different feeder routes and sizing the cables properly in both routes back to the CO. In fact, all four main feeder routes can be tied together in this fashion to create a ring around the entire city

fed by legs from the CO. This “multiple design” can take advantage of both active Ethernet and PON technologies. Today’s FTTH platforms support both active Ethernet and PON from the same chassis; planners should take advantage of this capability and use the right technology in the right place for the right customers. Fundamental planning is an important first step in deploying fiber in any area. I hope this discussion will act as a guide to developing a plan that will be viable and economical. BBP

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Community Fiber Networks Succeed Through Marketing Marketing is about more than ads and billboards, say managers of community broadband networks. It involves learning what customers expect – and meeting those expectations. By Craig Settles ■ Communities United for Broadband

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arketing often means the difference between success and failure. Community broadband operators, including municipalities, nonprofits and co-ops, must understand early that, although serving the public good is a common and worthwhile reason for building a network, the network’s future is uncertain at best if it doesn’t generate enough revenue. Effective marketing is the way to generate that revenue.

a student at the University of Wisconsin, Platteville, Rice worked as an intern at Genuine Telecom, a company with which RUC had a relationship. When RUC launched its network in 2003, it recruited Rice to take the marketing helm. RUC and the local government began exploring the option of building a network for this town of 9,000 while the utility was planning to upgrade its electricity service infrastructure, a project that began in 2000. “RUC hired a

The controversy generated by Reedsburg’s decision to offer community broadband created public awareness of the network and forced the municipality to make its case to the public. Reedsburg, Wisc., and Jackson, Tenn., have done tremendous jobs marketing their public utility–run networks in the face of stiff competition and opposition from incumbent providers. Both entered the community broadband game quite early – 2003 and 2004, respectively – and definitely have earned the moniker “pioneers.” Marketing Begins on Day One Catherine Rice, marketing and sales director for Reedsburg Utility Commission (RUC), can honestly say her marketing career has grown along with RUC’s marketing program. In 2002, as

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marketing firm to come in and do surveys to see if consumers wanted another provider,” says Rice. The two main incumbent providers were Verizon, whose wireline assets were later bought by Frontier, and Charter Communications. “Customer feedback strongly supported the desire for an addi-

tional Internet and cable provider,” Rice says. “RUC was building an extension to its electricity infrastructure, so the company decided to lay fiber in test beds simultaneously since it would be less expensive than building out from scratch. Once that buildout was completed, the formal marketing campaign started.” In many respects, however, the marketing began with the initial surveys. Rice continues, “All the discussions about whether to proceed were open to the public, and this helped a lot. The city council and the mayor frequently talked about the network, so the community was aware of what was coming. There was a lot of resistance, and RUC had to jump through hurdles to become a competitive local exchange carrier (CLEC). There were often questions about ‘should a government entity be providing telecom services.’ A couple of bills were written that tried to prevent the network [from being built], but the council decided to let this go through.” The Upside of Controversy The controversy that exploring community broadband generated had two positive outcomes: First, it created much awareness through the resulting publicity,

About the Author Craig Settles, the cofounder of Communities United for Broadband, is an industry analyst and broadband strategy consultant who delivers on-site training to privateand public-sector organizations. Follow him on Twitter (@cjsettles) and on his blog, Fighting the Next Good Fight (http://roisforyou.wordpress.com).

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MARKETING and second, the municipality and utility had to prove their case to the public. By winning support from key stakeholders and elected officials early on, RUC built a stronger position from which to market its broadband services. The community understood and supported the network before it was a reality. As the network went live in 2003, Rice and RUC used the pride of community ownership generated through those public discussions to fuel their marketing campaign. Rice says, “We heavily promoted the fact that we’re the local provider, RUC’s been here since 1894, and we’re up front. The incumbents are very contract-focused. We avoided adding fine print and openly address all aspects of our services. We showed how our bill, when compared to competitors’ terms and conditions buried in fine print, turns out to be lower. Some consumers, particularly the elderly, had been burned by competitors’ contracts, so they turned to RUC.” Emphasizing Service and Value Of course, a marketing campaign cannot rely just on the theme “We’re the hometown team.” It also cannot subsist solely on flashy ads and promotional materials. RUC understands that offering a better service is crucial. Says Rice, “We emphasized service and value. We structured our service packages to be similar to what the existing providers were offering but tweaked ours with a couple of new services on the cable side, plus more bandwidth and offerings on the Internet access side.” Regarding telephone service, RUC advertised great value for the price, such as special promotional rates and free installation when customers signed up. The broadband service that RUC offered while it was building out the infrastructure generated word-of-mouth support. The utility didn’t lock customers into three-year contracts. Rice concludes, “We provide a lot of education about what to do with our services, particularly for business customers. Our theory is that if our service isn’t good enough to meet your needs, you probably shouldn’t be a customer.”

“Customers remain loyal to us because they believe, rightly, that RUC has customers’ best interests at heart.” As its network and marketing efforts mature, RUC studiously avoids getting drawn into price wars. “Our competitors tend to do a lot of price promotions that are unbeatable, and we can’t match those,” remarks Rice. “We’ve kept prices competitive but consistent. Our marketing strength comes from RUC’s credibility. I get on the phone sometimes with people who call in for customer service or who have a complaint. As I resolve their issues, I ask them, ‘Who would you be talking to right now if you had this problem with another company?’ Customers remain loyal to us because they believe, rightly, that RUC has customers’ best interests at heart and they can’t get that level of caring from companies whose customer service people are based in another country.” RUC used relationships with its vendors, including Calix, to strengthen its customer-centric marketing hand. “Calix helped us to choose the correct electronics to deploy that were appropriate for our area and our customers’ specific needs, and this increases our quality of service,” says Rice. “We were invited to form quite a few relationships with other Calix customers to generate and share ideas. We obtained information and resources regarding successful FTTH projects and best practices.” Marketing based on company credibility is clearly paying dividends. RUC is experiencing a 60 percent customer take rate, which is extraordinary, particularly given that it faces such fierce competition from companies many times its size. The utility has 2,600 customers in total, including 220 of the 450 businesses in the community. No More Mr. Nice and Fluffy When it comes to marketing, “You can’t be a nice, fluffy businessperson,” says Michael Johnston, vice president of IT and broadband for Jackson Energy Authority (JEA) in Tennessee. As he

learned through rough experience, “You need to do a gut check. Are you ready to do the things to take a community network operation where it needs to be?” Like Reedsburg, Jackson (population 76,000) began its drive for community broadband amid controversy that arose when incumbents objected to the network and sued JEA. Publicity during this controversy helped the public utility build local political support as well as word-of-mouth stakeholder support for the network, so it was able to begin selling services in 2004, the same year it starting building the network. JEA launched its network with all marketing guns blazing. Johnston recalls, “We were doing everything: paper, radio, novelties, billboards. We retained a local marketing firm to help. In the beginning, our message and the strategy was all about ‘Come here, come here!’ Our marketing message was focused on customer acquisition, hitting heavily on the theme of price, the convenience of one bill and the fact we had an unbelievable fiber-to-the-home network.” Although JEA enjoys the benefit of being the hometown broadband team, Jackson is a fairly large market that eventually required JEA to add more depth to its marketing strategy. Johnston continues, “When people in local government say ‘marketing,’ they often think only of the pretty stuff – ads, billboards, flyers. Most Chambers of Commerce are all about marketing the community, but this isn’t the kind of marketing that makes a triple-play [voice, video, Internet data] service successful.” The kind of marketing that drives a telecom company to success entails not only marketing communications but also the creation of a product mix that appeals to prospects while generating a profit. JEA has reworked its entire service lineup over the past few years. It continues to change the marketing mix frequently,

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MARKETING Marketing can be too successful. If too many new customers sign up too quickly, network operations can implode under the weight of unbudgeted customer care requirements, including installation and support.

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• offering more speeds, more HD channels and even some channels for free. Customer service, as always, is a major component of the marketing effort. Leveraging the fact that it is not a forprofit entity trying to return as much as possible to the investors, JEA can give customers a greater level of support and much higher quality of service than its competitors do. For example, JEA offers same-day repair service with a four-hour window for arrival and next-day service with a two-hour window. Marketing also entails business development through building partnerships with various private, public and nonprofit organizations. When it explored the possibility of pursuing broadband stimulus money to expand its network, JEA decided that partnerships with several communities would be vital not only for winning a grant but also for successfully marketing the expanded network if it won the grant. Closing such deals requires crafting a consistent marketing message about the value of the partnerships themselves. “To make something like this work across a region, you may have to deal with nine or 10 different utility companies and several town councils one at a time,” says Johnston. “Your pitch to get them on board is going to come down to presenting quite a few intangible benefits, such as better quality of life and more efficient government services. But when we met with potential partners, we emphasized the part of our plan with the greatest tangible benefit – using broadband in health care and education.” The Cost of Success As JEA’s broadband business grew, it had to face the fact that its marketing was too successful. This seems so counterintuitive that few organizations may even

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consider the possibility. However, if marketing generates too many new customers too quickly, network operations can implode under the weight of unbudgeted customer care requirements. Success literally has a cost in terms of the installation, customer service and technical support that must take place before customers begin paying monthly fees. JEA discovered quickly that, in Johnston’s words, “We screwed this up.” The number of incoming subscribers was so far above sales projections that JEA had to cut back drastically on future growth. The company has recovered from this setback and continues to do well in the face of a constant marketing barrage from competitors. Johnston believes there are so many marketing tasks to master, and competition is so intense, that community broadband networks must be tough, creative and agile in their marketing execution. Because community broadband is still such a young movement, there are only two practical ways to accomplish this, Johnson believes. “You need to either ‘buy’ telecom marketing expertise by hiring someone who used to work for a Comcast or a Verizon, or acquire it through brute force learning, trial and error.” Tips for Marketing Broadband Services Reedsburg, Jackson and other communities offer several good lessons to broadband marketing teams. • Execute a good survey during the needs assessment. That will generate the market knowledge needed to create an effective marketing strategy. In fact, if you ask all stakeholder groups (businesses, schools, medi-

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cal facilities, and so forth) the right questions, they will tell you just how to market to them. Begin building market awareness from the moment you decide to explore a broadband network. Even if your network project is delayed, you’ll have a good feel for the potential depth of support when you eventually move forward. Do not let critics define your broadband marketing messages. Know how broadband’s capabilities can impact various stakeholder groups before you start, and craft your central message around these outcomes. You can change how you say it, but keep the core message the same so you maximize every marketing dollar spent. As much as possible, segment marketing messages, promotions and offers to motivate specific audiences effectively. “We market a general package to consumers, businesses get specialized offers such as for Web hosting and static IP addresses, and our large population of elderly who are snowbirds are billed only for their time here at home,” states Rice. Be prepared to continuously repel marketing assaults from competitors without fighting a price war. Use your organization’s smaller size to your marketing advantage. Be creative and nimble, know your marketing strength (it isn’t always what you think it is) and play to that strength. When partnering for marketing advantage, fully understand your partners’ marketing and other business needs. Without sacrificing your primary objectives for your network, continually try to contribute to their marketing success. Remember that political support is crucial to generating subscribers. It gives you the marketing strength to launch the project effectively and marketing momentum that increases sales. Involve elected officials early in developing your marketing messages, and continuously update them on your successes. Their comments reinforce the messages and amplify the positive word-of-mouth that happens within the community. BBP

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

Community Broadband

Worst Practices In Community Broadband Mistakes community broadband networks make – and how to avoid them. By Andrew Michael Cohill, Ph.D. ■ Design Nine Inc.

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urlington Telecom, the community-owned network in Burlington, Vt., has been in the news recently because of its financial problems. As more information emerges about the causes of Burlington Telecom’s problems, other community broadband networks should seize the opportunity to learn from those mistakes. Although some critics argue that high-profile problem projects “prove” community broadband is a failure, in reality the private-sector telecom industry has been littered with failures, collapses and mergers – does Adelphia ring a bell? Still, despite decades of private-sector problems, no one argues that those problems “prove” the incumbents should be shut down. The good news is that community broadband projects starting up now should have a much higher probability of success than the pioneer efforts of the last 20 years. In this article, I identify some of the “worst practices” that have emerged from a wide variety of community broadband efforts. These problems fall into three major categories: • Management deficiencies show up frequently in both large and small projects. • Poor financial decisions can be linked to inexperience with manag-

ing complex business enterprises. • If there is a weak point of the openaccess business model, it is inadequate marketing based on the assumption that service providers will handle that function. Management problems Letting the network run itself Some project organizers do initial planning and fundraising very well but fail to follow through with strategic and tactical planning. This problem is most common when boards of directors have limited experience managing large enterprises. It also occurs in projects that were started primarily with grant funds. One benefit of the ARRA broadband stimulus effort was an emphasis on developing an eight-year financial pro forma. Setting financial targets and then measuring progress against those targets is critically important, as is adjusting the pro forma at least once a year to match actual revenue, expenses and income. Overstaffing Community broadband start-ups have to control costs carefully until enough subscribers are buying services to get the effort into the black operationally. Overstaffing is often a byproduct of putting former telco managers in charge. Their experience in big companies with large middle-management staffing plans does

About the Author Andrew Michael Cohill, Ph.D., is the president of Design Nine (www.designnine. com), which provides broadband network design and network buildout services. Specializing in open-access network design, Design Nine has been involved in such “best practice” projects as nDanville, The Wired Road and Palm Coast FiberNET.

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not translate well to community broadband networks. Another reason community networks need fewer staff than equivalent incumbent operations is that their brand-new networks do not have the overhead or complexity of legacy copperbased coaxial and twisted-pair systems. Staffing too soon Staffing is a difficult challenge for startup networks. Even a small network needs a certain base level of skills and expertise, and identifying one or even two people who can wear all the necessary hats – management, marketing, network operations, outside-plant maintenance, financial oversight and customer support – can be difficult. As a result, some projects hire too many people before the revenue can justify the associated salaries, benefits and overhead. Boards of directors of community broadband projects have to be prepared to lend some hands-on assistance in the first year or two to help ameliorate having too many or too few staff members. Board members should be selected carefully based on specific expertise they can bring the enterprise, such as marketing experience, financial management or construction expertise. A well-crafted board of directors can help fill the gaps until revenue justifies hiring more workers with specialized skills. Another approach is to outsource some activities temporarily instead of hiring full-time staff. For example, outsourcing network operations for a year or two until the subscriber base grows may be less expensive than hiring a network operations specialist.

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

Community Broadband A private-sector firm that manages business, institutional or other private networks can allocate a portion of one person’s time to the community network so the network does not have to pay a full-time staffer. Maintenance of outside plant (fiber cable, wireless equipment, splicing) can also be outsourced to a qualified firm with equipment, trucks and trained staff. When a network grows to several thousand customers, bringing operations and maintenance in-house becomes less expensive. Hiring the wrong manager One of the “worst practices” I see is filling senior management positions without making sure candidates have a solid understanding of the fundamentals of community broadband networks. The business model and the approach to designing network infrastructure in community-owned networks differ from those in telcos. The open-access approach, coupled with a need to run a very lean operation for two or three years, requires an entrepreneurial, hands-on management approach. A common hiring error is to look for managers with telco or cable company experience on the theory that “they know telecom.” However, experience with a large incumbent telco or cable company does not always translate into the right work skills for a start-up. Telephone and cable companies tend to be big, high-dollar operations with high staff counts, high overhead and big expense budgets. Too often, the highbudget mindset may linger, and taking someone with a big company background and putting him or her in charge of an essentially entrepreneurial start-up is a recipe for – well, cost overruns. The first hire for a community network should be selected with great care. Getting help writing the job description and developing the list of roles and responsibilities may be useful. Getting assistance with interviewing candidates may also be wise, as their technical and business abilities may vary widely. Interviewers who can ask the right questions can help boards select the best-qualified candidates.

The financial records of a community network should be maintained completely separate from the rest of the parent organization. Poor Financial Decisions Spending in advance of revenue Although overstaffing is the easiest way to spend too much, start-up projects can easily bust their budgets with unnecessary operational expenses. Startups should look for donated or low-cost office space, borrowed or budget office furnishings and even borrowed phone and Internet services. I suspect that some ARRA-funded stimulus projects will make this mistake. The broadband stimulus grants can be used only for capital expenditures, so the first year of operations must be planned carefully to ensure that overall operational expenses don’t outrun projected (and actual) revenue. Spending capex funds on opex Managers of some bond-funded projects have learned, painfully, that spending money budgeted for capital expenditures on operational expenses is not a good idea. Do so long enough, and a death spiral occurs in which the network no longer has enough funds to construct connections to new customers. Without enough customers, there is no way to generate enough revenue to cover operational costs and the interest and principal payments on debt. Overreliance on grants This lesson was one of the first to emerge from the early round of community networking efforts in the 1990s. Many good projects eventually failed because project leaders incorrectly assumed that grants could be used to fund their efforts indefinitely. In project after project, grant funds eventually became scarce, and the lack of long-term, sustainable financial strategies led to the demise of many efforts. Grant funds play important roles in helping get projects off the ground and helping existing networks expand, but a solid business plan based on realistic assumptions about revenue, operational

costs, the cost of debt and the cost of expansion is critical. Financial transparency and poor accounting Some community projects have run into difficulty because of poor accounting practices. Community networks are not like most other community-focused nonprofits. A community-owned broadband network is a business first, and a tight focus on financial management is essential. Even if the aim is not to make a profit, a wide-area network is a complex undertaking that requires all the typical bookkeeping activities of any privatesector business, including accounts payable, accounts receivable, cash management and budgeting. Some municipal broadband project funds have been commingled with local government general funds – which can make determining the financial state of a network difficult. The financial records of a community network should be maintained completely separate from the rest of the parent organization. For a municipally owned project, this means using a mechanism such as an enterprise fund. For a regional project, it may mean creating a regional authority, a co-op or some other independent entity. Any broadband project established to serve a region’s broader community and economic development goals must be completely transparent about its financial records. The public should be provided with regular financial reports that show the sources of all funds and how those funds are being spent. Poor Marketing Decisions Failing to use take-rate commitments to guide construction and buildout I can say with some certainty that the “if we build it, they will come” business model does not work. Several projects have gotten into difficult financial straits by starting at one end of the service territory and building fiber to the

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Community Broadband other end without doing the market research to determine whether they can meet their take-rate targets. They usually don’t, and if a project gets only a 10 percent or 15 percent take rate, it is almost certainly because it did not match demand with its buildout plans. An essential step is to organize the proposed service area into buildout footprints and assign a take-rate target for each footprint. Once this is done, a marketing effort is needed to obtain purchase commitments of some kind, such as take or pay, local tax bond guarantees, binding preservice purchase commitments or connection-fee commitments. No construction should be started in a footprint until the take-rate target commitments are reached. This approach ensures that, on day one of network operations, enough customers will buy services to cover capital costs and operational costs. Not enough marketing Overreliance on service providers to handle marketing is one of the most

common mistakes in open-access networks. Community broadband efforts need well-run, ongoing marketing and public awareness campaigns. Projects that have trouble meeting financial targets almost all lack good marketing. The great advantage of open-access networks for service providers is that they need to make only small capital investments to offer services to customers on the network. However, this advantage can become a weakness; some providers, because they have invested little, spend little to attract customers. Instead, they are happy to pick up a few easy sales and then sit back and do little or nothing in the way of marketing. The network operator must ensure that residents and businesses are aware that the network exists, that they know what providers and services are available and that they know how to contact providers and order services. It may sound like Marketing 101, but some open-access networks are failing that class.

Summary Community-owned broadband is not going to replace large telcos and cable companies; on the contrary, most openaccess networks want their local incumbent providers to use community infrastructure to market and deliver services such as telephone, TV and Internet. Arguing that communities should stay out of telecom amounts to saying, “Stick with 20th-century business models that have not always met broadband needs of communities in the United States.” True, some pioneer community broadband projects have had problems. However, the opponents of community broadband have nothing to offer except, “Stick with what we know has failed.” A better approach is “Let’s try some new models and learn what works.” Projects such as Burlington Telecom, even if they disappoint their own communities, are useful in the long run. They provide valuable best-practice information for all the community projects that come after them. BBP

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| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

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Service Management Systems

Building a Nationwide Open-Access Network A Swedish network operator grows revenues and reduces operating expenses with an automated service management system. By Ronald Corriveau ■ COS Systems

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etwork operators need to design operations and management systems that are tailored to their particular networks and that meet the needs of their service providers and subscribers. This is the story of how Quadracom, a Swedish network operator, scaled its regional network to provide coverage in more than 40 cities and rural areas and added dozens of services and providers while reducing head count and improving customer satisfaction. The key to such cost-efficient growth is to develop a service-driven network. As an open-access network operator, Quadracom deploys next-generation services to its subscribers and its network of competitive service providers. It manages dozens of municipal FTTH networks all over Sweden, delivering secure access for service providers and subscribers. Although Quadracom is not a household brand in the communities it serves, many local, regional and national service providers offer branded services, such as Internet access, VoIP and IPTV, over the networks it manages. Quadracom’s network serves more than 40 municipalities, 110,000 residential customers and 1,000 business customers. Almost half its 22 service providers offer Internet access with speeds that range from 1 Mbps to 1 Gbps, with various support options and pricing plans. Several providers offer multiplay services with bundled discounts. As Quadracom grew, it faced the challenge of scaling its network without proportionally increasing its manage-

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ment costs. Staffing reductions became necessary to maintain profitability. To meet the needs of its ever-growing network, Quadracom invested in software to manage subscribers and providers. However, its early investments in management software did not achieve the cost reductions or operational efficiencies it required.

securely manage the network infrastructure, their services and their subscribers. In addition, the company wanted to offer a service marketplace where network subscribers could shop for and select the services they wanted and have them activated immediately. A subscriber using such a marketplace would not have to call a salesperson during business hours

Service providers’ time to market is reduced from days to just minutes. They no longer have to request the network operator’s assistance to activate customers or manage services. Although Quadracom dramatically reduced its staffing requirements, it was still faced with high personnel costs and too many manual processes. Adding new services and service providers took way too much time and effort. To effectively grow its services, subscriber base and average revenue per user (ARPU), Quadracom undertook a more intensive automation initiative to enable its service providers to manage as much of the process as possible. Quadracom decided to implement a solution that would let service providers

or wait for a technician for routine service activation, moves and changes. Jan Söderholm, the chief technical officer of Quadracom, realized he needed to implement more automation and selfservice capabilities in his operations. As Söderholm sums up the situation, “Our management software was a real mess and was just not able support our service providers and support our staff or customers the way we wanted it to.” Despite having already invested in management solutions, Söderholm realized that if the network he wanted to

About the Author Ronald Corriveau is the vice president of business development at COS Systems. You can reach him at 617-274-8171 or by email at [email protected].

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

Service Management Systems build was going to succeed, he needed a solution far more powerful than what he had. The solution would have to be Web-based, secure and capable of supporting greater automation in all key aspects of managing services, service providers and subscribers. The most important requirement was to be able to manage the software in Quadracom’s data centers throughout Sweden from a single location. With these needs in mind, Quadracom began to search for a solution that would meet all its needs today and provide a foundation that would support its future growth plans. It identified several important features. The solution would have to • allow service providers to manage and support their service activations, services and customers without assistance from Quadracom except for network outages • enable network subscribers to browse and order available services from any service provider on the network by using a simple Web portal tailored for each network being managed • provide an easy-to-use billing feature that would enable customers to enter billing information once and share it with service providers and billing parties on the network and that could support the many different billing models in place across all the networks under management • deliver 24/7 availability with faulttolerant and redundant capabilities to ensure that the service marketplace and management portals were continuously available for network subscribers, service providers and operations staff. After looking for proven products that could meet all its needs, Quadracom determined that COS System’s product, COS, offered all the capabilities it desired. Quadracom awarded COS Systems a contract to conduct a pilot deployment on its network to verify that the COS solution would in fact deliver all the capabilities it needed. The pilot project proved to Quadracom and its service providers that COS enabled them to manage everything

they needed between their data centers and their subscribers. Quadracom’s service providers saw the benefits from COS immediately. Söderholm says, “Once our service providers saw we could totally automate the sale and instantly activate the services their subscribers ordered, they were hooked! It is the perfect solution for our needs and exactly what they had been asking for. We experienced an immediate reduction in the number of calls needed between the service provider, subscriber and our staff and cut the service delivery time from days to just a few minutes in most cases. Our service providers were happy because this accelerated their time to revenue.” Using the COS best practices deployment methodology implemented in the pilot project, COS Systems and Quadracom deployed COS management to the entire network in less than 90 days. Once the deployment was complete, service providers and subscribers had a secure and easy-to-use model to order and deliver network services. Accessing services using COS is as easy as 1, 2, 3: 1 Go to an easy-to-use Web portal to shop for services, learn about service and provider options and make selections. 2 Enter address and billing information once and have it securely delivered to service providers. 3 Sit back, wait a few minutes and enjoy the new services. Lessons Learned at Quadracom Söderholm comments, “The only way we could profitably manage the Quadracom network was to slash our cost of operating our 22 municipal networks. By centralizing and consolidating all the operations into a single network operating center, we were able to cut staffing costs and implement a high degree of automation in our network. Our service providers could easily and securely manage their customers while we managed the network and service providers. COS enabled us to dramatically improve the economics of our network by lowering operational costs

and increasing ARPU by offering more services at competitive prices.” He adds, “Implementing COS on our network gave us the ability to leverage automation, self-service provisioning of services from multiple providers and simplify billing to network subscribers. By lowering our management costs and improving ARPU, we were able to build a powerful, secure and easily managed network with competitive services and prices.” Service Providers Benefit Service providers also realize benefits from doing business with larger networks where they have a larger customer base and where they can focus their marketing resources. Providing services on a regional or national network can dramatically reduce the marginal cost of service delivery, billing integration, customer acquisition and new service creation. One provider on the Quadracom network says, “COS makes it easy for us to offer our services by simplifying the integration of our service ordering, billing and operations systems onto the networks where we offer services. On networks that use COS, we can offer a new service in hours instead of weeks and achieve higher ARPU with lower management costs.” The provider adds, “New service orders arrive electronically and contain everything we need to enable services for customers. Their addresses and network services are added to the network outlets in their homes or businesses, along with the information we need to bill them, making it easy to integrate them into our order management, service management and billing systems. The level of effort required to offer services on networks managed by COS is helping us drive our growth strategy. We are eager to offer our services on COS-managed networks because they are easier to manage and more profitable.” Since deploying COS, Quadracom has accelerated its efforts to expand its customer base. Now that it can manage additional networks, it can benefit from the wider choice of services and providers that COS enables without increasing its operational staff. BBP

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Financial Applic ations

The Low-Latency Service Opportunity Financial trading firms, whose profits depend on entering trades ahead of competitors, lead the demand for low-latency network service. Other industries will follow them soon. Service providers need to prepare their networks to meet this demand. By Brian Quigley ■ ADVA Optical Networking

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n certain key markets, service providers are finding that latency – the length of time a packet of information takes to get from one point to another – is an increasingly important competitive differentiator. Even better, the differentiation is measurable, and customers in the relevant markets tend to be both sensitive to the value of the difference and willing to pay for it. Capitalizing on the low-latency opportunity, however, requires an approach to building optical infrastructure that is different from what service providers use to support traditional corporate networks. How can service providers segment the low-latency market and differentiate their offerings?

How Low Can You Go? Deploying state-of-the-art network interface cards, high-capacity core network switches and multicore servers is not sufficient to satisfy certain industries’ need for networking speed. The most delay-sensitive of applications, such as gaming, video, business continuity and, especially, electronic financial trading, need low latency as well.

Winners and losers in electronic-trading races are separated by mere nanoseconds. This has made them hypersensitive to network latency and focused industry attention on connectivity between exchanges. For innovative algorithmic-trading strategies, such as high-frequency trading, that have grown prevalent in segments of the financial industry, latency is absolutely critical. In algorithmic trading, automated buy and sell orders are driven by a computer model’s predefined set of rules for interpreting information feeds from around the world – share price and volume data from multiple exchanges, labor statistics from many markets, news reports and so forth. Since algorithmic and other forms of electronic trading took off in the late 1990s, the competitive jockeying among firms has evolved. First, these firms tasked mathematicians with adjusting the computer models to better predict how markets might respond to various

About the Author Brian Quigley is the senior director for strategic global account development at ADVA Optical Networking, a global provider of telecommunications equipment that specializes in carrier and enterprise Ethernet optical transport. He can be reached at [email protected].

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events. Next, they deployed more powerful servers and more powerful switches to connect the servers. The more quickly a firm can receive and parse incoming data and churn out orders, the better, because the first trade to market gets the best price. Today, after making these improvements, winners and losers in electronictrading races are separated by mere nanoseconds. This has made them hypersensitive to network latency and has, in turn, focused industry attention on connectivity between exchanges. The most meaningful competitive advantages in the ability to receive information and get orders to market now come from fiber optic transport links. For service providers, this trend has translated into an influx of requests for ultra-low-latency connections to and from trading venues, information sources, colocation facilities and international landing points for submarine cable. Proper segmenting, targeting and positioning are critical to standing out against the competition and winning business in the valuable electronic-trading space.

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

Financial Applic ations The Market for Electronic Trading

Two industry segments that are most enthusiastic about low-latency connection services are investment banks and proprietary trading firms. They are different types of businesses, but their needs for low-latency service offerings are similar. Investment banks primarily help corporations and governments raise capital. However, many of them provide additional services, such as market making and trading for various asset classes. Latency matters most to the departments in charge of these additional services. Proprietary trading firms tend to be much smaller than investment banks, and they trade with their own money rather than with their customers’ money. They use a variety of trading strategies, such as statistical arbitrage, index arbitrage and volatility arbitrage and, in some cases, they make markets. These firms are very quick to make connectivity decisions and often change connectivity methods quickly as new latency innovations come to the market. A key trend impacting electronic trading is exchange fragmentation, particularly in Europe and Asia. As recently as 15 years ago, investment banks and trading firms might have focused on as few as two exchanges, the New York Stock Exchange and NASDAQ. Today, financial markets are fragmented among hundreds of trading venues globally, and a stock may be listed in many venues. This fragmentation is part of the reason investment banks and trading firms have invested so heavily in electronic trading and in their capabilities for exploiting arbitrage opportunities. The companies must optimize their connections and gain local strategic intelligence to enter their targeted markets fast and smart. To do this, they must first differentiate between the traffic to carry on their traditional, corporate networks and the traffic to carry on their trading networks. For carriers, the methods and best practices appropriate for designing general-purpose networks cannot simply be applied to trading networks or they will not achieve latencies low enough to succeed in electronic trading.

Investment banks and trading firms are typically willing to pay large premiums for low-latency services because they have experienced the negative impact on their take rate of trades when networks are not optimized to deliver low latency. Financial firms grasp the necessity of this distinction very quickly because they have experienced the negative impact on their take rate of trades when the optical network infrastructures that underlie their electronic-trading processes are not optimized to deliver low latency. The good news for service providers that can convey the value of and deliver specialized low-latency services is that investment banks and trading firms are typically willing to pay large premiums for services that can meet their exacting needs.

Differentiating an Offering

Though dozens of microseconds (millionths of a second) in latency can be eliminated by properly optimizing any network, low latency is not a commodity service. Some manufacturers’ systems deliver a differentiating competitive advantage, and some do not – and innovation in the underlying technologies is ongoing and rapidly paced. The state of the art for low-latency connectivity along the Chicago-to-New York trading route, for example, has been shaved by multiple milliseconds (thousandths of a second) over the last year alone. The winning service providers in the electronic-trading market, whether they offer fully managed, dim/fractional wavelength or dark-fiber services, will be those that prepare their networks explicitly for the low-latency opportunity. The first step is to reduce the path from point A to point B, as shortening an exchangeto-exchange route by one physical mile of fiber equates to a five-microsecond improvement in round-trip latency. Going still further to achieve the game-changing, ultra-low latencies that investment banks and trading firms will pay most for requires revisiting preconceptions about optical networks and

taking a deep dive into their key functions. Broadband providers might use the same fiber paths as their competitors, but, if they use time-division multiplexing (TDM) on the links, for example, they lose the low-latency customer. Relying on forward error correction to transmit optical signals across long distances is valuable for some applications, but it also feeds latency, as does deploying spools and spools of dispersioncompensating fiber (DCF). Many difference-making pockets of delay can be eliminated by reexamining the functions and techniques commonly used to transport customer traffic across glass networks. • Multiplexing – Combining lowerspeed traffic signals to a higherspeed network port using TDM entails processing that produces several microseconds of latency – enough to lose the low-latency game. The better approach is to carry signals on separate channels of light via wavelength-division multiplexing (WDM), creating dedicated paths for multiple types of traffic across the same fiber and yielding much lower latencies. Within the array of available WDM solutions, though, there are still major differences among manufacturers, and strategic choices need to be made. Systems that use thin-film filters, for example, inject unnecessary delay in varying increments, depending on the color of the wavelength carrying the traffic. As a result, carriers that use these systems not only have slower transmission but also must specify a different latency for each wavelength. • Color conversion – In a WDM system, the traffic for each customer is converted, or transponded, to a

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Financial Applic ations Electronic trading is likely to bring heightened latency sensitivity to such mainstream applications as Internet gaming, video, and business continuity. Service providers should make sure they are well-positioned for these opportunities. particular color of light. Significant latency may be associated with this conversion. Emergent low-latency transponders carry out the process in single-digit nanoseconds. Again, there are major differences among technologies, and carriers must pay attention to transponder latency. • Amplification – Erbium-doped fiber amplifiers (EDFAs), which are frequently used to boost weakening optical signals along fiber routes, can be sources of delay. Some common architectures – high-gain, dual-stage EDFAs, for example – can inject microseconds of delay. On a longdistance route that links exchanges in two different cities, the performance impact is intolerable for electronic trading. Latency-optimized EDFAs perform amplification in half as much time, and counter and copropagating RAMAN amplifiers (used instead of EDFAs) have shown their ability to shrink amplification latency by a factor of 16. • Dispersion compensation – DCF is a commonly used tool for offsetting signal degradation that results from chromatic dispersion (the broadening of an input signal as it travels down a length of fiber). High-speed signals, such as 10 Gbps, tend especially to smear across the spectrum of wavelengths as they travel over long distances in a strand of optical fiber. Augmenting networks with kilometers of DCF counters the effect, but it also produces latency that electronic traders cannot afford. Fiber Bragg gratings can be used to offset chromatic dispersion without introducing the delays DCF causes. • Regeneration – Optical signals require regeneration in addition to amplification if they are to maintain

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their performance over longer connections. As with the other functions, traditional techniques are not suitable for low-latency applications. Optimized technology, however, slashes regeneration delay from hundreds of microseconds to mere nanoseconds.

Conclusion

Financial firms will continue to tweak their algorithms and back-office systems to more quickly detect and act on anomalies across markets, and these tweaks will continue to deliver gains. However, their systems have been optimized to such a level that such adjustments might yield latency gains of only fractions of a microsecond. By paying attention to exchange-to-exchange connectivity, service providers can not only help their trading-firm customers become winners in the low-latency financial markets but also remove themselves from the commodity-based transport game. Financial customers are seeking partners with the global presence and experience (understanding of local integration and fiber-route information, for example) to allow them to start trading anywhere business takes them. Having already invested in making improvements everywhere else across the ecosystems of equipment and processes underlying electronic trading, these companies are seeking providers whose networks have been optimized for the task. What’s more, electronic trading is likely to be the catalyst for bringing heightened latency sensitivity to more mainstream applications, such as Internet gaming, video, and business continuity. It’s important that service providers learn the low-latency market terrain today if they are to find themselves wellpositioned for tomorrow’s additional opportunities.

| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

Ad Index Advertiser

Page

3M 27, 105 Adtran 15, 28 Advanced Media Technologies 28, 37 AFL Telecommunications 28, 101 AT&T Connected Communities 29, C-4 ATX Networks 29 Broadband Properties 2-3, 38, 109 Blonder Tongue 30 Calix 30 Channell Corp. 9, 30 Charles Industries 31, 130 Clearfield, Inc. 1, 31 Comcast 31, 91 Connexion Technologies 24, 25, 31 Corning Cable Systems 32, C-3 COS Systems 13, 32 Dish Network 32, 39 Display Systems, Int’l 33 G4S Technology (formerly Adesta) 5, 33 Great Lakes Data Systems 29 Human Productivity Lab 131 Information Data Products / Data Connect Ent. 43 Mac Gray 33, 124 Multicom, Inc. 34, 113 OFS 34, 121 Radiant Communications 11, 35 RVA, LLC 125 Spot On Networks 35 Successful.com 117 Sumitomo Electric Lightwave 35 Suttle 36, 47 Team Fenex 33 Televes USA 36 Time Warner Cable 7, 36 Verizon Enhanced Communities 37, C-2 ViewTEQ 37, 95 Walker & Associates 38, 87

Calendar Website www.3M Telecommunications.com www.adtran.com www.amt.com www.afltele.com www.att.com/communities www.atxnetworks.com www.bbpmag.com www.blondertongue.com www.calix.com www.channell.com www.charlesindustries.com www.clearfieldconnection.com www.comcast.com www.cnxtech.com www.corning.com/cablesystems www.cossystems.com www.dishnetwork.com www.displaysystemsintl.com www.G4STechnology.com www.glds.com www.humanproductivitylab.com www.idpc.com www.macgray.com www.multicominc.com www.ofsoptics.com www.rccfiber.com www.RLALLC.com www.spotonnetworks.com www.successful.com www.sumitomoelectric.com www.suttleonline.com www.teamfenex.com www.televes.com www.timewarnercable.com www.verizon.com/communities www.viewteq.com www.walkerfirst.com

June 1–3 Intelligent Community Forum Building the Broadband Economy Polytechnic Institute of New York University New York, NY 646-291-6166 www.intelligentcommunity.org 23 – 25 NAA Education Conference & Expo Mandalay Bay Resort & Casino Las Vegas, NV 703-518-6141 www.naahq.org September 18 – 22 BICSI Fall Conference & Exhibition MGM Grand Hotel & Convention Center Las Vegas, NV 813-979-1991 www.bicsi.org 26 – 30 FTTH Conference & Expo Walt Disney World Swan & Dolphin Hotel Orlando, FL 613-226-9988 www.ftthconference.com November 7–9 NMHC Apartment Operations & Technology Conference & Exposition Hilton Anatole Dallas, TX 202-974-2300 www.nmhc.org April 2012 24 – 26 Broadband Properties Summit InterContinental Hotel – Dallas Addison, Texas 877-588-1649 www.bbpmag.com

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| BROADBAND PROPERTIES | www.broadbandproper ties.com | March/April 2011

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