Verizon begins ordering FTTP gear

John Schofield, president and CEO of access equipment vendor Advanced Fibre Communications, addressed some of the skepticism surrounding Baby Bell fiber-to-the-premises plans by pointing out that Verizon Communications has already begun ordering FTTP products and is well on its way toward significant FTTP deployment.

"I doubt they’d be ordering [products] if they weren’t serious about this," Schofield said.

Reacting to Schofield’s remarks in a research note this morning, Lehman Brothers analyst Steven Levy said Verizon’s deployment plans "could even be ahead of schedule."

Verizon has vowed to pass 1 million homes with fiber in 2004, the first year of a major ongoing FTTP rollout. The Yankee Group recently predicted the carrier would reach at least 350,000 customer locations this year and spend $150 million on equipment as part of the deployment.

"I know there’s skepticism out there," Schofield said. "A number of people have said, ‘This has happened before. The RBOCs have talked about fiber-to-the-home for years, they’ve done trials, they’ve done modest deployments. Why should we believe that this time is going to be any different?’"

At the Optical Fiber Communications conference in Los Angeles last month, SBC’s senior vice president of network planning and engineering Chris Rice referred to Verizon’s plans as an "alleged" deployment, adding, "It’s not in the ground." Speaking generally, Rice said the delayed resolution of the Federal Communications Commission’s triennial review order, which sets rules governing the use of access networks, deters Baby Bells from aggressively deploying FTTP.

In his remarks today, Schofield argued that the current FTTP plans would surpass previous efforts because Baby Bells are facing competitive pressure that they’ve never faced before.

Schofield admitted that BellSouth (which AFC serves through its acquisition of Marconi’s fiber-to-the-curb or FTTC equipment business) is not likely to ramp up FTTC deployments unless the FCC grants the carrier’s petition to free FTTC from unbundling requirements. If the petition is denied, "BellSouth will continue to deploy FTTC in the fashion that it has been deploying [it]," he said. But he described Verizon’s plans as decidedly less conditional.

"Verizon’s very committed to this," Schofield said, adding that Verizon began sharing much of its FTTP planning and marketing information with the vendor last year when AFC won a five-year contract to become Verizon’s FTTP equipment supplier. "This year [Verizon] will be [FTTP] enabling over 100 central offices across nine states in their territory, and they’ve already completed the engineering work for about 500,000 of the million homes they intend to pass this year. Cable is being pulled as we speak."

Verizon is likely to bury fiber in the ground for greenfield deployments and deploy it aerially for overbuilds, he said.

AFC has adjusted its FTTP products somewhat for Verizon’s use and recently sent the latest version of the gear to Verizon for final lab trials before field trials begin this spring, Schofield said.

The AFC CEO also added that FTTP component prices are already coming down. "In the last 90 days, we’ve seen significant changes in cost on some of the components," he said. "I’m absolutely convinced that that will continue, particularly as the larger component vendors get into this game."