RBOC fiber builds: So close, yet so far

An FCC decision this week to remove unbundling obligations from fiber-to-the-premise (FTTP) deployments that serve "primarily residential" multiple dwelling units (MDUs) eliminates one of the regulatory problems cited by the RBOCs. However, the Baby Bells' FCC checklist for widespread deployment of next-generation networks remains formidable.

Despite FCC Commissioner Michael Copps' concern that small businesses located in MDUs--for example, a shop in the first floor of an apartment building--would suffer because of a lack of broadband choices, the MDU hurdle probably was the easiest to clear. After all, if the idea were to give RBOCs a free pass on unbundling in return for making expensive network investments to serve residential customers, it wouldn't make sense to cut the one- third of the U.S. population that lives in apartments out of the equation.

According to Verizon Communications, it will begin deploying FTTP throughout the former Bell Atlantic region if the FCC distinguishes between enterprise and mass-market unbundling requirements and offers assurance that unbundling obligations associated with long-distance approval don't apply to new fiber networks. In fact, a Verizon official this week told reporters that the carrier has put fiber in place--but not lit it--in many areas of the region as a "leap of faith" that the regulatory questions will be resolved.

For BellSouth, there is an added burden of getting the FCC to treat fiber to the curb (FTTC) in the same manner as it treats FTTP. I expect there to be some opposition to that notion, because the legacy copper still would provide the final link to the customer. And that argument will be even stronger when the subject turns to SBC Communications' proposed fiber-to-the-node (FTTN) buildout.

Even if all this relief is provided, don't be surprised if there is a further delay as the debate turns to what applications ride over these new fiber pipes. For a carrier investing in FTTP, the payback time is much easier to swallow if it can be assured that the customer is choosing between its triple-play offering and cable's triple-play offering, rather than generating revenue for the broadband Internet access but not being assured of getting money for voice over IP or video.

Who knows, this application debate could be the next generation of the unbundled network element (UNE) controversy. And wouldn't that be fun?

E-mail me at djackson@primediabusiness.com.