OPTICAL SOLUTIONS RULES GPON

As Verizon Communications and others continue their drive to deploy broadband passive optical networking technology, perceptions surrounding BPON and its higher-bandwidth sequel, GPON, often echo the title of a recent Alcatel press release: “BPON today, GPON tomorrow.” But American carriers are deploying GPON (or gigabit PON) today, allowing one equipment vendor — Optical Solutions — to corner the market.

The last standards for GPON — which cranks up the downstream speeds of fiber-to-the-premises networks to 1.25 Gb/s and 2.5 Gb/s, twice the bandwidth of BPON networks — weren't finalized until February, which is one reason most access vendors haven't rushed to launch GPON products. Hitachi Telecom USA is one such vendor. Hitachi Chief Technology Officer David Foote told Telephony in February that although the company was developing GPON gear, a true industrywide GPON push “hasn't really started yet.” While several major vendors plan to introduce GPON gear next year, Optical Solutions has already shipped almost 16,000 units and 100,000 optical line terminal ports of GPON gear in the U.S., the company said.

Optical Solutions submitted GPON gear to the requests for proposal issued jointly by three Bell companies in the summer of 2003. It was rejected because, according to CEO Mike Dagenais, “Verizon felt that the only mature multi-vendor environment was BPON.” Dagenais replaced the previous CEO shortly after the company fell out of the running for the Bell RFP.

Today, Optical Solutions' unique commitment to GPON has given it a clear edge in the marketplace. With 20 to 30 customers for its GPON-based FiberPath 500 FTTP platform, Dagenais claimed Optical Solutions owns about 98% of the domestic market for GPON gear, conceding the other 2% to Flexlight Networks. (Flexlight CEO Bill Lee said the market is too young to estimate market-share numbers; his company, which has been shipping GPON gear to Europe and Asia since late last year, also claims one of the top ten U.S. cable companies as a customer.) Nearly half of Optical Solutions' customers are deploying GPON only.

“Our revenue has grown over 100% since the beginning of the year, and almost all of that is from GPON,” Dagenais said. Carriers are picking GPON for triple-play services and for business clients that wouldn't be content with BPON's 155 Mb/s upstream speed. GPON is not as widely adopted as Ethernet FTTP, but Dagenais insisted GPON is preferable to Ethernet for voice, video, security and distances more than five kilometers (about three miles). A spokesman for WorldWide Packets disagreed, saying Ethernet uses VLANs for security, handles voice and video just fine, and can be used with a range of multi-mode optics, matching cost with distance, to reach 120 km.

A GPON deployment might cost 10% to 15% more than the BPON version, but for many service providers making a long-term investment, the price is worth it — especially for those companies that want to leave the door open for a potential IP video deployment in the future.

“If you're going to invest in a new subdivision, you might as well spend a little bit more, knowing that you're not going to have to replace it in a couple years,” said Mike East, CEO of Molalla Communications, a small Oregon telco that began turning up FTTP service to a 144-home subdivision using the FiberPath 500 in August. “If and when we decide to get into video, we'll use an IP headend. GPON better facilitates that.”

The cost gap between BPON and GPON should shrink as more vendors release their own GPON gear next year. By then, Dagenais said, “We'll have almost a year-and-a-half head start and a tremendous installed base.”