December 17, 2013
The Return of Fiber Deployments
By Doug Mohney
After the fiber optic "glut" of over a decade ago and Verizon declaring its FiOS (News - Alert) deployments are effectively done, it seems contrarian and maybe a bit insane to predict a forthcoming wave of new, capital-intensive projects to put more glass in the ground. Four trends are conspiring to make fiber a retro tech play.
Wireless is one of the two biggest drivers for new fiber projects over the next five years. All the major U.S. carriers are talking up higher speeds with LTE (News - Alert) deployments and expanding coverage via a wide combination of new cell sites and micro/nano/metro cells deployed within urban areas to ensure the best coverage possible. More capacity will be needed.
LTE is all IP, so it's a natural fit for a clean fiber backhaul solution -- and fiber is what you want. There are numerous and various ways to squeeze more bits out of copper on short haul runs, but using older copper runs the risk of more complex equipment while pulling new copper doesn't make sense since you can get more current and future capacity by pulling fiber.
Google (News - Alert) is going to be the other big driver for new fiber projects, either directly or indirectly. Google has money to burn and has a clear vision of offering 1 Gigabit Ethernet to all comers. The company has already has projects in Kansas City, Austin, Texas, and Provo, Utah. If you think Google is going to stop at three cities, you are crazy.
After Google announced it would roll out high speed service in Austin, AT&T (News - Alert) suddenly found the wherewithal to offer fiber service in that market. U.S. carriers should be on the lookout for Google's fiber ninjas sneaking into primary and secondary markets, cherry-picking opportunities to deploy in underserved regions where the company can effectively compete against local DSL offerings.
A smart company might consider its ability to deploy a dark fiber network within an urban metro setting and offer it to the highest bidder. Google would certainly entertain the idea of buying dark fiber in selective markets, since all it has to do is find some local data center space to jack in equipment. An incumbent local carrier may consider purchasing a third-party fiber build to control access to the market -- take a look at what AT&T is doing with access rights to its poles as an example.
Trend three is outside of the big city. A number of rural phone and cable companies have decided to proceed directly to go and upgrade aging physical plant directly to fiber. These efforts are being egged on by companies such as ADTRAN (News - Alert), urging carriers to take advantage of Federal Communications Commission (FCC) program dollars to transform their networks for broadband access.
Speaking of age, let's talk about more than twenty years of fiber deployments and efforts to do rollups of a bunch of smaller markets. The fiber and associated physical plant put into the ground two decades ago is not the stuff you want delivering GigE speeds and faster. At some point cable coax will have to be replaced and Verizon's party line in markets with FiOS is "Let us come and get you off that unreliable cable because we have problems with the old copper."
Verizon's arguments for moving off copper to fiber in FiOS markets may ultimately come back to haunt them in non-FiOS areas it serves. If the existing copper plant and backend hardware is so bad, shouldn't the company be thinking about replacing it for all of its service areas?
Wireless, Google, rural access, aging physical plant -- all trends indicating that the fiber business will be worth watching over the next few years. Add in disgruntled municipalities that want fiber and are willing to setup their own companies to deploy it along with a wildcard that new home gas pipelines driven by cheaper shale may lead to fiber coming in along for the ride. It's almost enough to make me start looking at investing in some trenching equipment.
Edited by Cassandra Tucker
More Dark Fiber Community Stories