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SBC Good for Billions in Fiber
June 22, 2004
By Jim Wagner
CHICAGO -- SBC Communications (Quote), the second largest telecom
carrier in the United States, will invest up to $6.2 billion in the next five years
to deliver Fiber to the Node (FTTN), said Ed Whitacre, the company's
chairman and CEO, at Supercomm 2004 Tuesday.
Also planned for later this year are field tests of the San Antonio,
Texas-based telecom's IP play using Microsoft's (Quote) IPTV
service.
"This is pretty exciting stuff, if you think about it," Whitacre said during
a keynote speech. "Interactive TV will give customers more control and
interactivity in ways that today's providers cannot."
Only five years ago, SBC embarked on another kind of $6 billion high-speed
Internet initiative, called Project
Pronto. The goal was to deliver DSL to more than 90 percent of its
coverage area, which includes Texas, Illinois, Wisconsin, Nevada and
Michigan. This March, SBC reported it had four million DSL customers and
planned to cover 80 percent of its footprint.
Fiber brings the promise of truly high-speed Internet access to the home and
business. Copper-based digital subscriber line (define) technology
delivers (depending on the package) between 756 Kpbs and 3
Mbps download speeds and between 256 Kpbs and 1.5 Mbps upload speeds.
Fiber, on the other hand, clocks in at between 15 and 25 Mbps download speeds and 1 and 3
Mbps upload speeds.
That speed, primarily on the upload side for voice and video conferencing,
is necessary to deliver the next-generation services every carrier wants to
provide: an integrated voice, video and data package that connects every
electronic device in the home, from the television to the PC to consumer
electronics. Speeds on the new fiber network would reach up to 20 Mbps.
The fiber launch, which begins today, is SBC's entrance into the Fiber to
the Home (FTTH) market sector. This is on the heels of Verizon Communications' own fiber deployment
to SBC's backyard in Dallas last month, offering speeds between 5
and 30 Mbps.
The price of networking equipment for the technology has been steadily
decreasing the past four years, though carriers have been hesitant to deploy
the high-speed Internet lines for another reason.
The recent foray into
fiber is the direct result of loosening restrictions placed on the telecom
industry by the Federal Communications Commission (FCC), Whitacre said.
For years, the FCC has required carriers to abide by pricing determined by
state public utility commissions (PUC) for Unified Network Equipment-Platform (define).
The UNE-P ruling gave competitive local exchange
carriers (define) a competitive shot at providing telecom services
against the incumbent telephone companies like SBC, Verizon and Qwest
Communications (Quote) in the local markets.
Whitacre said the end of
what he calls "unlawful" restrictions will allow SBC and other carriers to
invest in next-generation technology. He did say, however, that the company
would not make any "unilateral UNE-P changes" until the end of the year.
Not mentioned were his plans for sharing SBC facilities with CLECs after
Dec. 31.
The UNE-P ruling, he continued, resulted in lost jobs and lost opportunities
for the company.
By declining to support a Supreme Court appeal of the UNE-P ruling by the circuit court, said Whitacre,
the Bush Administration has
set us on a path that closes one of the most contentious and horrible
chapters in our history.
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