Overbuild: The New RBOC Advanced Access Architecture Strategy?




Market Studies
1394 Market and Technology Study Overbuild: The New RBOC Advanced Access Architecture Strategy?

Published : January 1, 2009

Overview | Features | TOC | TOF

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Overview

Information Gatekeepers has recognized the Advanced Access Architecture thrusts of the major U.S. carriers as among the most important events in telecommunications history. As such, IGI has been periodically issuing major reports on the FTTP/FTTN activities of the RBOCs since they began in 2003. Earlier this year we issued “Advanced Access Architectures – 2008: AT&T, Verizon, and Qwest Plans and Forecasts,” the most comprehensive of our reports on this subject. In recognition of the wide interest and deep importance of the FTTP/FTTN phenomena, we are now issuing a series of reports that focus on narrower aspects of Advanced Access Architectures. Specifically, this report focuses on the competitive impacts of overbuilding by the RBOCs with AAA. The report is a companion to:

  • “Advanced Access Architectures - 2008: AT&T, Verizon, and Qwest Plans and Forecasts” | info

  • “Cost Analysis of RBOCs’ Advanced Access Architectures; FTTP, FTTN, FTTC” | info

  • “Bandwidth Needs Analysis of the RBOC’s Advanced Access Architectures : FTTP and FTTN” | info

  • “FTTP/FTTN: The RBOCs’ Advanced Access Architectures Equipment and Fiber Requirements.” | info

The first report above, “Advanced Access Architectures – 2008 …,” is a very comprehensive report on the subject. The others focus narrowly on particular aspects of the broader area. This report focuses on the strategic impacts of overbuilding.

Perhaps overbuilding started with Abel’s farming intruding on Cain’s hunting territory. It certainly was in full force in the early part of the 20th century when Tesla was overbuilding Edison’s DC distribution facilities with AC power facilities. (Con Ed in New York still had over 4,000 DC customers in the early 1960s.)

“Overbuild” in the context of this report refers to one company building facilities and offering service in another’s franchised territory. Overbuild in the telephone industry, particularly by the large players, has been practically nonexistent since the early days (early 1900s) of the industry. Today, some small, mostly rural telephone companies may overbuild each other, and overbuild has been fairly widely practiced in the cable industry. Some telephone companies have overbuilt cable companies with CATV-type distribution. Also, cable companies using their CATV distribution plant to provide telephone service, as is common now, certainly are overbuilders. However, until now, overbuilding has not been practiced by the large telephone companies in this country in modern times.

With Verizon’s decision in northeast Texas to overbuild not only the existing cable companies, but also AT&T, that has all changed. As has been widely reported, Verizon started in mid-2008 to directly overbuild AT&T franchise areas in North Texas. This activity is based on an approved application with the Texas PUC for 12 Texas cities outside the existing Verizon franchises.

Table of Contents

 

Table of Contents

Table of Figures

The Lightwave Network Series of Reports

The Lightwave Network

The Lightwave Series of Reports

General Reports on the Network

General Market Reports

Specific Systems Reports

Introduction

Overbuilding

This Report

Verizon’s 2008 Overbuilds in North Texas

What is Happening Now

How Is Verizon Doing this Overbuild?

Significance of The Overbuild

A New Type of Competition

Competitive Situation

General Competitive Landscape

Telco Line Loss Impacts

Verizon

Verizon — FiOS

Verizon — Services

AT&T

AT&T — Uverse Services

Video

Internet

Voice

AT&T U-verse Video Services

High-Speed Access U-verse Services

Comparing the Plans of the RBOCs

Summary information on the Announced Plans

RBOC Plans — Quantitative Analysis

Announced Plans — Size

Competitive Situation Summary

Strategic Implications

Verizon Advantages of Overbuild

Other Possibilities for Verizon Overbuild

Verizon’s “Big City Strategy”

AT&T Strategic Alternatives

AT&T Overbuild

Improve Uverse and then Overbuild

Pair Bonding

Reduce the Distance

Hybrid FTTN – FTTC

Compression

AT&T Could Ignore the Verizon Activity

Forecasted Strategic Outcome

Vendors Listing

Summary of Vendors

Detailed Listing of Vendors

Acterna (acquired by JDSU)

ADC

Adtran

Advanced Fibre Communications Inc. (AFCI) (Now Tellabs)

Alcatel-Lucent

Alloptic Inc

Amino Technologies plc

AOC Technologies

Avanex Corporation

Broadlight

Calix

Cisco

Conexant

Corrigent

Entrisphere Inc. (Acquired by Ericsson)

Ericsson

Fiberxon (Now Source Photonics combined with Luminent)

Finisar Corporation

FlexLight Networks (Defunct)

Fujitsu

Genone3 Technologies Inc.

Hitachi Communication Technologies Ltd.

Humax USA Inc.

Iamba Networks

JDS Uniphase

Kreatel Communications AB (Acquired by Motorola)

LG Electronics

LightComm Technology

Marconi

Microsoft

Motorola

NeoPhotonics

Nortel

Novera Optics (owned by Nortel / LG JV)

OFS

O-Net Communications Ltd

Oplink Communications, Inc.

Optiviva Inc.

Optical Solutions (Acquired by Calix)

Osaki Electric Co. Ltd.

Paceon (Mitsubishi)

Passavé (Acquired by PMC-Sierra)

PMC-Sierra

Quantum Bridge Communications (Acquired by Motorola)

Salira Optical Network Systems

Scientific-Atlanta (Cisco)

Siemens

Source Photonics (Combined with Fiberxon and Luminent)

Tandberg Ltd. (Ericsson)

Tellabs

Terawave (Acquired by Occam Networks)

Tut Systems (Acquired by Motorola)

Vinci Systems, Inc. (Acquired by Tellabs)

Wave7 Optics

Worldwide Packets, Inc. (Acquired by Ciena)

Zhone Technologies

Vendors of WDM – Listing and Summary of Status

ADC

ADVA

Alcatel-Lucent

Ericsson

LG Electronics

Nortel

Novera

Pirelli

Tellabs

Appendix I - Access Architecture

Various Approaches for Fiber-based Access Architecture

Fiber to the "X"

xDSL Versions

Design Details for Current Plans

Fiber to the Neighborhood (FTTN)

AT&T's Fiber to the node (FTTN)

BellSouth's Fiber to the Curb (FTTC)

The RFP — PONs Will Set Us Free

What Are PONs?

The PON Design

Status of PON

Advantage and Disadvantages of PON

Types of PONs

BPON

EPON

GPON

The PON in the First RFP

GPONs

Architectures to Meet the Needs

Table of Figures

Figure 1, Lightwave Network
Figure 2, Verizon's NOOF Arrangement
Figure 3, Verizon Contractor Sign in AT&T Territory
Figure 4, Rodding Machine At Work
Figure 5, Plastic Duct Going In
Figure 6, Splice Pit
Figure 7, Rodding Machine Work Site
Figure 8, Current Competitive Landscape
Figure 9, Potential new Competitive Landscape Resulting from Overbuild
Figure 10, Verizon Revenue Comparison Total Wireline vs. Data
Figure 11, Wireline Losses vs. Data Revenue Increases
Figure 12, FiOS States - 2008
Figure 13: Verizon Services
Figure 14: AT & T U-verse Video Services
Figure 15: North Texas U-verse Service Offering
Figure 16: AT&T U-verse High-speed Access Services
Figure 17, Comparison of Internet Access Speed Offered
Figure 18: Announced Plans Summary Chart
Figure 19: RBOC Plans — Annual HPs
Figure 20: Announced Plans — HPs Cumulative Passed vs. Served
Figure 21, Summary of Vendors
Figure 22, Fiber to the 'X' Varieties
Figure 23, Chart of Various xDSL Technologies
Figure 24: Fiber to the Neighborhood
Figure 25: Fiber to the node
Figure 26: Fiber to the Curb
Figure 27: PON Basic Arrangement
Figure 28: RFP PON — Central Office Portion
Figure 29: RFP PON — Outside Plant Portion
Figure 30: RFP PON Service Assignments
Figure 31: BPON/GPON Comparison
Figure 32: Typical GPON
Figure 33: Bandwidth Needs vs. Capabilities