The Copper versus Fiber Conundrum

The copper versus fiber debate was reinvigorated last week, after an article in the NY Times questioned whether or not Verizon’s fiber bet would pay off. This question, along with how much bandwidth is enough, or GPON versus EPON or PON versus Active Ethernet has no right answer - because there is no single architecture that will satisfy the needs and requirements of every operator.

The number of items that must be taken into consideration when choosing both a network architecture and its associated technologies is a daunting task and one that I am happy to not have to make. Things were a lot easier when it was a monopoly and an operator was assured of its customer base. But in today’s world, things are different and every investment into the network is a bit of a gamble, especially when it take years to implement and technology and services are changing faster than U-verse channels.

Predicting the future is a tricky skill, particularly when there is little historical precedent. Five years ago, no one anticipated the speed at which HDTV would become mass market, or that Michael Phelps could, let alone would, break Mark Spitz’ 36-year record. But the future success of telecom companies will be the ability to anticipate the unexpected. Verizon did not ask itself if they could afford to deploy fiber, they asked if they could afford NOT to deploy fiber, especially given the impact of cable operators within its own region.

According to Verizon, FiOS has met every expectation in terms of subscriber growth, ARPU and perhaps most importantly, a significant reduction in OPEX over its copper network. But it has come at a significant cost that will take many years to recoup and given the competitive environment, may never do so. Did they make the right decision? From a bandwidth perspective – absolutely. From a business point of view – the jury is still out.

AT&T, like so many other operators around the world, chose to leverage its copper plant as much as possible. At the time of its decision to deploy FTTN, SBC was busy integrating AT&T into SBC, and was looking to keep its CAPEX spending in check. FTTN offered a solution to meet its bandwidth needs at one-fifth the cost of FTTH. Did they make the right decision? From a bandwidth perspective – absolutely not. From a business point of view – the jury remains out and it remains unclear whether they have been able to achieve their anticipated cost per subscriber.

So at this stage, neither solution has been optimal. But does it really matter? Consider this gem of a quote from Randall Stephenson from the August 19, 2005 USA Today:

""If I bet wrong, I didn't break the future of this business. For a company of this size, $4 billion is very little money. If I bet wrong, it's not much money for us to burn." So what's the backup plan if IPTV doesn't work out? "We'll just switch gears and go fiber-to-the-prem,"

That pretty much answers the copper versus fiber question.