OEN EYES NATIONAL TRIPLE-PLAY MARKET

A new service provider with major national ambitions in the triple-play space made its debut last week at the FTTH Conference in Las Vegas, promising to offer the first package of broadband services specifically developed for fiber-to-the-home networks.

Optical Entertainment Network, a privately funded company based in Houston, has developed a package of services, called Fision, that includes 400 channels of video content in addition to pay-per-view offerings, high-speed Internet access, voice over IP and advanced services such as home security, PC backup, gaming, application rental and more. It is selling these services on both a retail and wholesale basis.

OEN's initial retail deployment begins this month in Houston, where it has partnered with Phonoscope, a public utility company with an existing 7500-mile fiber-optic network throughout Houston and surrounding counties. OEN will begin connecting homes in the Cypress Fairbanks area within the next two weeks, and, if that first deployment goes well, it will start deploying in the city in January and continue adding fiber drops throughout Houston and seven surrounding counties over the next five to six years, said co-founder and CEO Thomas Wendt.

During that time, OEN also will offer its service package to other service providers, including municipalities and power companies, that want to operate an FTTH network.

“Most everyone else is trying to retrofit legacy technologies on FTTH — traditional POTs and cable TV with RF insertion,” Wendt said. “We went out and developed a service specifically designed for FTTH. We can give you a discounted wholesale package or come in and run it for you, on a retail basis.”

OEN is working with a group of vendors in putting together its end-to-end IP/Ethernet network that delivers up to 1 Gb/s per home. The company is using Alloptic's FTTH technology, Amino's set-top boxes, NetCentric's softswitches and Extreme Networks' Ethernet switches. The network is 40 Gb/s at its core and delivers 10 Gb/s to the neighborhood, Wendt said.

To date, OEN has raised $3 million in private funding and is in the process of raising $15 million in a second funding round. In addition, it has secured vendor financing. The company plans to issue a stock IPO in the first quarter of 2006.

The company's value proposition is based on having what Wendt believes is a unique video package and in offering an ad-based retail model that offers consumers a triple-play service package at less than $50 per month. OEN will also offer a non ad-based retail service that is higher priced but includes options such as home security.

Because of its high channel volume, OEN is offering programming in 12 languages, including extensive Spanish language programming, and has already negotiated with the major studios for its content.

“We consider ourselves an entertainment company first,” Wendt explained. “We have put together this channel lineup ourselves and we have ours done directly with networks and studios. And every single one of them has language for IP distribution and transport. I defy anyone to get IP language [in the contract] from major players, and we've done that. We have letters from many of them, including A&E, saying that we are first.”

OEN is looking to work with municipalities and service providers of any size that are building a fiber-optic network and want to outsource the services package.

To satisfy content providers' need for security, OEN is using a smart-card based system with rotating keys that changes the security system several times a minute. To provide the quality they want, OEN will not use compression or encoding on its fiber network, he added.