ACCESS:CAN VIDEO KILL THE CABLE STAR?

In the game of access, telcos need a triple play

For all the scorn it has received over the past few years as being the bottleneck of broadband, the access network and its associated technologies will be getting an inordinate amount of attention over the next year.

With the fundamental basis of revenue—access lines—continuing to slowly decline because of technology substitution and emerging cable telephony competition, most telcos are desperately searching for a way to slow the bleeding. In the vast majority of cases, that involves investing in the access network to either increase DSL penetration rates or deploy video services.

Case in point: SBC said in its most recent quarterly earnings call it would push DSL out to 80% of its users by early next year after spending an inordinate amount of effort on regulatory issues related to broadband. The carrier is expected to shift some of its precious capital dollars into high-speed access gear as it tries to make up lost ground against cable modem competitors.

Independent telcos, which as a whole traditionally lag in pushing advanced services out to customers, also are picking up the pace and are expected to reach significantly greater portions of their customer base using line-extending technologies such as full-rate extended DSL, broadband wireless or Wi-Fi.

At the same time, though, the high-speed access market is moving to a second stage of evolution as it relates to the competition between cable operators and telcos. While cable operators have captured the early adopters with their high-speed offerings, some of the more forward-thinking telcos are upping the stakes by offering tier services and/or unique content to complement the DSL offerings. For most, the answer is to go straight to the heart of every home—the living room—by offering video services. If broadband is expected to be the main course of telcos' growth engine, video is the alluring dessert.

SureWest, among the most aggressive telcos in the triple-play market, is moving quickly in that direction, having built up its fiber facilities after acquiring WINfirst and its DSL capabilities in its telco serving area. The company, which passed 10,000 triple-play customers in October, also bears watching because it could serve as a test case for larger carriers. Additionally, the telco is using a variety of vendors—including Allied Telesyn, Occam Networks, Minerva Networks and Kasena—that traditionally have not been able to crack the largest ILECs.

Those vendors, along with a slew of start-ups, are giving back the access market some of its old excitement. While Alcatel is in no danger of losing its top spot in the DSLAM market share race, vendors such as AFC, UTStarcom Sumitomo, Catena Networks and Zhone Technologies threaten to make enough noise to keep it from becoming a single-vendor market. Additionally, large vendors like Lucent Technologies and even Cisco Systems haven't completely abandoned the market.

What's more, enough services, especially those related to video, are being developed, including network-based personal video recording and video-on-demand, to ensure the access market will be ripe for technology development with ADSL 2+ and VDSL emerging.