RealTime IT News

SBC Has Big Plans For Video over Fiber

Trying to wrest residential customers from cable rivals, SBC will launch TV over fiber by late next year, the regional telecom said today.

Trials are under way and network construction is slated to begin early next year. SBC's goal is to make the network available to 18 million households by the end of 2007.

The fiber network will give SBC enough bandwidth to offer for a "triple-play" bundle of TV, phone and high-speed Internet services. The strategy is also being aggressively pursued by Verizon .

"[Fiber] provides a number of important advantages -- including superior speed to market with exciting, market-changing services -- and it allows us to leap-frog today's U.S. telephone and cable TV networks," Lea Ann Champion, an SBC executive vice president, said in a statement.

SBC also provided details on the cost of the initiative, pegging three-year deployment costs at $4 billion -- the low end of its previous range. Another $1 billion is earmarked to activate customers in 2006 and 2007.

Overall, however, SBC expects capital expenditures to increase only slightly because money is being shifted from its current network.

In existing neighborhoods, SBC will use fiber-to-the-node (FTTN) architecture, which takes fiber to within 3,000 feet of homes and uses compression technologies and IP switching to deliver TV, Internet and voice services.

Fiber-to-the-premises (FTTP) will be used in new housing developments and some multi-dwelling units. FTTP extends fiber-optic connections from central offices and remote terminals to customer locations.

SBC said FTTN can be completed in one-fourth the time required for an FTTP overbuild and with about one-fifth the capital investment.

So far, Comcast , a prime target of the fiber strategy, has downplayed the threat.

In the company's most recent conference call, CEO Brian Roberts said even if Verizon and SBC hit ambitious deployment goals, Comcast will still be the fourth or fifth competitor in a market, which also includes satellite TV providers.

"Let's play it out," Roberts said at the time, noting that any subscriber defections to FTTP would likely be spread among Comcast and other players.

Despite the cool assessment, Roberts isn't dismissive of fiber, acknowledging that it would represent a "meaningful competitor." But from a business standpoint, he doesn't see it delivering a strong return on investment.