New life for VDSL

Next Level Communications has breathed life into video-over-very high bit-rate DSL(VDSL) by cutting the costs to deploy its technology.

“It's tremendously important for VDSL,” said Ryan Jones, analyst for The Yankee Group. “At this point, it's the backbone and network stuff that people are scared of.”

Next Level addresses these areas with a product upgrade that reduces costs by 30% per subscriber and quadruples output capacity “through some technical advances we've had, primarily in line-speed capabilities,” said Jeff Barnell, Next Level's senior vice president of marketing.

The product upgrades seem to be predicated on demands made by Qwest Communications, Next Level's biggest customer, which “has taken delivery on the product” along with Bell Canada, Barnell said.

However, a Qwest spokeswoman would not confirm the shipments or that the technology upgrades met Qwest's pricing demands.

“We can't comment on the status of our relationship with them or any other vendor,” said a company spokeswoman. “We view VDSL and video-on-demand as exciting technologies… but in terms of further deployments of VDSL outside where we are currently [Boulder and Denver, Colo., and Phoenix], we don't have any plans.”

Jones said he wasn't surprised by Qwest's reaction.

“It doesn't make any sense for Qwest to come out and say, ‘Congratulations, Next Level, for making a reasonably priced product,’” he said. “If Qwest wasn't thinking about this kind of technology — and they said very clearly in their second quarter earnings announcement that they were — they'd probably give an opinion — and certainly a negative one.”

The product upgrade benefits network costs because “instead of requiring two fibers running at OC-3 speeds, we can now quadruple the number of customers running across a single OC-12,” Barnell said. “We've mitigated one of the pinch points in the architecture.”

More for less How Next Level's newest broadband digital terminal (BDT) compares with its last generation
	Old BDT	New BDT
Capacity	OC-3 (155 Mb/s)	OC-12 (622 Mb/s)
Subscribers supported	1024	4096
Universal service access modules per BDT	1	2
Source: Next Level

That opens the way for services such as movies on demand because “you need more bandwidth to provide the movies,” said Tom Dahl, general manager of Hutchinson Telephone. Hutchinson, a controlling member of a 14-telco VDSL provider consortium, has not taken shipment on the new products, but other members have, Dahl said.

But VDSL's ultimate success rides on something that Next Level probably won't introduce until October or November. At that time, its products and those of other vendors will start complying with standards being set by the Full Service VDSL committee.

“The goal of the committee is to get interoperable products out there quicker, sooner and cheaper,” said Clayton Mangione, director of technology development for Bell Canada and the committee's president.

Bell Canada is taking shipments on the OC-12 products and a higher-density multi-dwelling unit equipment shelf that handles 144 VDSL customers rather than the current 32.

But standardization will make or break VDSL, Mangione said. “That's critical not only for VDSL, but it's critical for Next Level,” he said.

Even an ongoing Next Level obstacle — the price of its customer premises equipment — is not a major concern today, said those involved.

“The [set-top] box in the home is expensive, but at least that grows in parallel with the people who are paying the money,” Jones said.

Mangione said Bell Canada has seen a 40% reduction in the price of the set-tops in the last year, with more cuts expected as standardization encourages multiple vendors. And Hutchinson's prices have decreased from $700 to $500, Dahl said.

“Their box does three TVs plus high-speed data,” he said. “If I'm going to do that same thing from a cable TV company on traditional fiber/coax, I need three set-top boxes and a cable modem. Now tell me who's cheaper.”

Despite the setbacks suffered by its sibling, data-based asymmetrical DSL, VDSL continues to survive in a tough economy because “VDSL is really the only solution out there today that can deliver TV service most American consumers want” over telephone lines, Jones said.

“If you're going into major markets like Qwest is looking at, you need a VDSL solution.”