Broadband Communities

MAR-APR 2018

BROADBAND COMMUNITIES is the leading source of information on digital and broadband technologies for buildings and communities. Our editorial aims to accelerate the deployment of Fiber-To-The-Home and Fiber-To-The-Premises.

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M A R C H / A P R I L 2 0 1 8 | w w w. b r o a d b a n d c o m m u n i t i e s . c o m | B R O A D B A N D C O M M U N I T I E S | 6 5 However, even cable companies that favored fiber in new construction ran into difficulties in the last couple of years. Hossam Salib, vice president for cable and wireless strategy at the technology vendor ADTR AN, notes that large fiber rollouts by AT&T and Google pushed up prices for fiber, splicing equipment and other inputs, raising the cost of fiber deployment by as much as 25 percent. "at changed the business case considerably," he comments. In addition, according to Salib, cable companies that deploy fiber generally use RFoG technology for compatibility with the RF-based video in their HFC networks. RFoG was relatively inexpensive when it was introduced 10 years ago, but it didn't work well with higher bandwidths, and deployers had to either add an expensive fix (optical beat interference) or use more expensive RF- over-PON solutions. Even without these problems, transitioning solely via new housing construction would be slow. Currently, about 1.3 million new housing units are added annually – about 1 percent of the total housing stock and 2 percent of the total number of cable broadband customers. Even if cable companies served all these new units, which they don't, and even if they served them all with fiber, which they certainly don't, replacing HFC networks with fiber would take generations. Another option for cable companies is to build FTTH when they expand beyond their traditional service territories. e issues are similar to the issues for new construction. ere have been instances of this, but in general, to the disappointment of cable customers, cable companies tend to stay within their existing service areas and not compete with one another. us, if the "endgame" is to arrive anytime in the foreseeable future, cable companies will have to convert HFC infrastructure to all-fiber. And that, in turn, requires one or more of the following to be true: • e existing HFC network faces competition from a fiber network. • e condition of the existing HFC network is too poor to upgrade. • Someone is willing to share the costs. • e existing network can be upgraded, but replacing it with fiber is less expensive than upgrading it. Some of these conditions already exist, if only very locally – such as in a single apartment community – and others will become more common as time goes on. COMPETITION e most common reason for cable companies to deploy fiber in brownfield areas is that they need to compete locally with fiber deployers. Sometimes, the competition is more about perception than reality, at least in terms of current usage patterns. Salib says, "If AT&T continues to deploy fiber at the rate they're doing, cable MSOs may have to deploy fiber to compete. … But it's a marketing push more than anything. Consumers won't see the difference." Other industry observers agree. Both Calix, a technology vendor, and CCI Systems, an integrator that works with Calix products, are beginning to see operators in ultra-competitive environments plan to cap investment in their traditional HFC networks and turn to fiber instead. Perhaps the most striking example of a cable company's building FTTH for competitive reasons is Altice. In 2016, this European company acquired Cablevision, a large cable operator in the New York metropolitan area that was struggling to compete with Verizon's Fios service in much of its territory. Six months after the acquisition, Altice (now Altice USA) announced it would overbuild the entire Cablevision footprint – approximately 3 million customers – with FTTH over five years. at build is just beginning, and the company expects to launch fiber services in some areas by the end of 2018. Eventually, more cable companies will find it difficult to match their fiber-based competitors – which is one reason for the statement that "fiber is the endgame." at won't happen soon. e next major upgrade for HFC networks, full-duplex broadband, which Salib estimates will be commercially available in two to three years, will allow cable operators to offer symmetrical gigabit service to residential customers. is could keep well-maintained cable plant competitive in some places for 20 years to come. However, Salib adds, "ere's still no parity with fiber. Full-duplex will be capable of 8 Gbps downstream and 3 Gbps upstream, but fiber will always be faster. Look at NG-PON2 or next-generation EPON – those fiber technologies are capable of much higher rates, and there are plans for even higher rates. ese speeds will be used for applications we don't even know about today." CABLE IN POOR CONDITION HFC systems that have been kept current can generally accommodate today's bandwidth demand, at least for downstream bandwidth. Gigabit (downstream) service over HFC networks is now common. However, not all operators keep all their systems up to date. Todd Gingrass, solution director at CCI, cites an operator that was considering what to do with some very old HFC plant that had a capacity of only 550 MHz. "ey were strapped for bandwidth," he says. "e plant was really old. e cable itself was old. It had aged poorly, and they'd have to replace a lot of it. So why replace it with cable again? It made more sense to scrap the whole thing." Even large cable operators have some systems in poor condition, Gingrass adds. However, smaller operators tend to be more flexible and more willing to move forward with big decisions such as converting to all-fiber. Facing competition from fiber-based services, Altice USA plans to overbuild the former Cablevision HFC plant with fiber over five years.

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