Greenfield players pursue fiber land grab

Companies bringing fiber-to-the-home to master planned communities, or MPCs, are rapidly expanding nationwide, chasing a recent wave of demand in the space.

Broadweave, a provider of triple-play services over FTTH networks, nursed a single MPC in Lehi, Utah, for six years before winning a second customer late last year. Last month the company asked the state of Texas for permission to offer telecom services there and is now seeking the same approval in Arizona, California, Nevada and New Mexico. Of the 20 MPCs from which Broadweave now has contracts or letters of intent, 12 are outside Utah.

“We're growing like crazy,” said Steve Christensen, Broadweave's CEO. It's time for Broadweave to expand, he said, because, “We're ready now, the developers are ready, and people are demanding it.”

More than 40% of the MPCs under construction today have chosen FTTH, according to research firm Render Vanderslice Associates. The top motivator cited has been a desire to “future proof” their communities. In 2011, 70% of new MPCs will opt for FTTP, according to ABI Research.

Zoomy Communications is also chasing the market cross-country, targeting the 11 states that produce half of the country's new MPCs (a southern swath from coast to coast, plus Colorado, Illinois and Idaho; combined, they yield roughly 375,000 new MPC homes a year). Founded as a professional services firm in late 2002 and adopting an MPC focus two years ago, Zoomy won its first MPC last year and now has more than 30 under contract.

The company is latching onto the need to future proof by offering a wholesale FTTP network (built with Calix' Gigabit passive optical networking gear) that doesn't lock MPCs into a single service provider. Zoomy typically takes 40% to 45% of the revenue from the service provider that uses the network and adds high-end extras such as home security and a computer concierge.

Cable operators have only recently begun to tap the MPC market, Christensen said. But Broadweave's biggest competitors are the developers themselves. Because many developers opt to build their own fiber networks (more than a third of the FTTH networks going into MPCs today are owned by the developers, Render estimated), equipment vendors have been able to tap this market directly. Do-it-yourself developers are typically partial to PON networks because PON vendors offer easy end-to-end solutions, Christensen said, whereas Broadweave uses equipment from a variety of vendors for its active Ethernet system.

The pace of these projects, and their sales cycles, can be glacially slow, however. Developer Karl Capps estimated he talked to Zoomy about deploying fiber in his Topeka, Kan., community for a year and a half before signing a contract. Zoomy expects another project, for 16,000 homes in Mississippi, to take about a decade to complete. And the 8000-home development Broadweave won in 1999 will, after developer delays, still include less than 800 homes next month.