Commission reseller voip

Last month the Federal Communications Commission appeared to trigger massive investment in US telecommunications infrastructure by issuing key reassurances over the unbundling of fiber, and first off the mark SBC Communications immediately stepped up and dramatically accelerated its fiber roadmap.

But there are question marks over how orchestrated the entire affair was, and this may have been little more than a last minute vote catcher for the departing administration.

Effectively the US regulator said that anyone installing new fiber will not be forced to unbundle that loop, for unbundled read have low connection prices mandated on it by the FCC. And for the first time this now includes the more efficient fiber to the kerb roll-outs that are favored by two of the three largest Regional Bell Operating Companies (RBOCs).

This last clarification, alongside a previous Triennial Review Order that made it clear that fiber that went right into the home was already exempt, has finally satisfied the wills of Verizon, SBC and Bellsouth and they made all the right noises about spending, spending and spending and driving up equipment suppliers' share prices and kicking the US back towards top spot in global broadband statistics. The US is currently 13th by the ITU league tables in terms of the quality and percentage penetration of broadband lines to its homes.

DIFFERENCE OF OPINION

There are two, violently opposing, views of this move. One, that the Bush administration is over friendly to big business and that the RBOCs held off on investment in concert and virtually blackmailed their way to these reassurances. Anyone that takes this view will feel that the FCC move will stifle competition and reverse the intentions of the Telecommunications Act and put the US back 30 years in terms of liberalizing telecoms.

The second point of view is that it was madness to ask for investment from companies that were being told to allow competitors access to their networks at prices lower than cost. That to continue it would have been ruinous to the existing RBOCs and that fresh investors, fond of complaining about unbundling connection prices, had sensed blood in previous unbundling regimes, and were merely wanting to pick at the corpses of the RBOCs.

These two positions could not have been better aired than in the statements by FCC commissioners voting for and against the move. FCC Chairman Michael Powell said, "Deep fiber networks offer consumers a 'triple play' of voice, video and data services and an alternative to cable. By limiting the unbundling obligations of incumbents when they roll out deep fiber networks to residential consumers, we restore the marketplace incentives of carriers to invest in new networks."

Powell said that the two limiting guidelines were that the homes experienced speeds of 20Mbps or higher, and that the FCC rules demand that carriers deploy fiber deep into neighborhoods within 500 feet of a customers' home. And yet it turns out that the only RBOC that is planning to take fiber within 500 feet of the home is Verizon and although it made a big hullabaloo over its plans to install 2m more fiber lines next year, there was nothing new in its announcements.

Commissioner Michael Copps took the opposite view, "Though today's Order speaks in glowing terms about broadband relief, the reality is far less radiant. I don't believe competitive telecommunications have been faring very well under our watch and this particular proceeding strikes me as yet another in a series of prescriptions this Commission is willing to write to end competitive access to last mile facilities. It seems every month brings a new onslaught."

He continued, "Here is why I think this approach is dangerous. The loop represents the prized last mile of communications. Putting it beyond the reach of competitors can only entrench incumbents who already hold sway. Monopoly control of the last mile created all kinds of problems for basic telephone service in the last century, and now we seem bent on replicating that sad story for advanced services in the digital age.

"Unfortunately, the digital age is going to take a lot longer to get here because of the blows we are inflicting on competition."

And he ended on a warning note, "It doesn't take a compass to see what direction this is heading. With fewer and fewer loops available to competitors, more and more control will be wrestled away from consumers and placed with the entrenched owner of the last mile facility. By shutting off the last mile to competitors, the Commission is not ushering in a new era of broadband. It is returning to the failed and non-competitive policies of the past."

Copps has since dubbed the last mile a duopoly (cable and telco) pointing out that new satellite and wireless technologies together serve only 1.3% and broadband over power line does not yet even register.

Copps probably best expresses how most of the US Congress thinks on the subject, if various votes in the past are to be taken seriously. But the public is likely to see only the good news effect this has on share prices and news coverage. Last month it was even seen as a last minute vote catcher by an increasingly desperate government.

Will the FCC mandate hold for another four years? The answer is probably yes, since it would be unfair to trigger any such huge investment by major commercial semi-monopolies and then undermine it.

The FCC will now have to rely on cable operators, broadband over power (which it has played up considerably), mobile and new broadband wireless technologies like WiMAX, to offer competition in the local loop instead of unbundling which has been promoted successfully in other parts of the world, especially Europe. So what investment exactly has been promised here? SBC Communications said it will dramatically accelerate its plan to build a new fiber optics network into neighborhoods, and will fiber up 18m households in the next two to three years, rather than the five years as previously announced.

"The shovel is in the ground, and we are ready to go," said SBC chairman and CEO Edward E. Whitacre Jr. "Rational rules promote innovation and investment in new networks and services for consumers."

SBC'S PROJECT LIGHTSPEED

SBC calls its plan Project Lightspeed, and it will build out 38,800 miles of fiber, at a cost of between $4bn and $6bn, to provide integrated IP-based television, ultra-high-speed broadband, IP voice and wireless bundles of products and services.

In its initial announcement in June, SBC said that it would be offering TV services and that it would install the Microsoft TV IPTV platform to deliver standard and high definition TV programming to multiple TV sets in the home over an FTTN network, leaving enough bandwidth available for super high-speed broadband and Voice over IP (VoIP) services.

The numbers SBC is quoting imply a cost per home of something under $350, whereas previous estimates of the cost of taking fiber right into the home was closer to $2,000 in statements made during the past two years. The pricing was expected to be halved by only taking fiber to the curb, with further savings made as suppliers committed to high volumes of fiber, but the numbers it is issuing now don't quite add up, nor does its statement on Project Lightspeed, which suggests that it is in fact moving fiber connections from 12,000 feet from the home to 5,000. It's closer but it's not the 500 feet that will make it exempt from unbundling.

SBC has clearly stated that this type of fiber to the curb is only 25% of the cost of fiber to the home and it also announced a five-year, $1.7bn primary supplier agreement with Alcatel to provide network equipment and video system integration services for Project Lightspeed.

Alcatel will offer core network access, aggregation and switching and it will work with SBC to ensure seamless video systems integration.

SBC has so far been only trialing Fiber to the premises and will now launch trials of fiber to the node early in 2005.

So the question of just what technologies SBC will use to take signals the last mile is still open. Where it is tempted by the new FCC unbundling rule and takes fiber within 500 feet, expect the answer to be VDSL.

Where it wants to keep the fiber 5,000 feet away from the home, the answer will be ADSL2+ or WiMAX broadband wireless (which we know Alcatel is committed to supplying and where it has reseller agreements with Navini). But in these installations SBC will continue to be forced to unbundled where a competitor requests it, although currently the FCC pricing on unbundled services has been squashed by a US court and currently this is only being handled by commercial negotiation.