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SBC Good for Billions in Fiber

CHICAGO -- SBC Communications , the second largest telecom carrier in the United States, will invest up to $6.2 billion in the next five years to deliver Fiber to the Node (FTTN), said Ed Whitacre, the company's chairman and CEO, at Supercomm 2004 Tuesday.

Also planned for later this year are field tests of the San Antonio, Texas-based telecom's IP play using Microsoft's IPTV service.

"This is pretty exciting stuff, if you think about it," Whitacre said during a keynote speech. "Interactive TV will give customers more control and interactivity in ways that today's providers cannot."

Only five years ago, SBC embarked on another kind of $6 billion high-speed Internet initiative, called Project Pronto. The goal was to deliver DSL to more than 90 percent of its coverage area, which includes Texas, Illinois, Wisconsin, Nevada and Michigan. This March, SBC reported it had four million DSL customers and planned to cover 80 percent of its footprint.

Fiber brings the promise of truly high-speed Internet access to the home and business. Copper-based digital subscriber line technology delivers (depending on the package) between 756 Kpbs and 3 Mbps download speeds and between 256 Kpbs and 1.5 Mbps upload speeds. Fiber, on the other hand, clocks in at between 15 and 25 Mbps download speeds and 1 and 3 Mbps upload speeds.

That speed, primarily on the upload side for voice and video conferencing, is necessary to deliver the next-generation services every carrier wants to provide: an integrated voice, video and data package that connects every electronic device in the home, from the television to the PC to consumer electronics. Speeds on the new fiber network would reach up to 20 Mbps.

The fiber launch, which begins today, is SBC's entrance into the Fiber to the Home (FTTH) market sector. This is on the heels of Verizon Communications' own fiber deployment to SBC's backyard in Dallas last month, offering speeds between 5 and 30 Mbps.

The price of networking equipment for the technology has been steadily decreasing the past four years, though carriers have been hesitant to deploy the high-speed Internet lines for another reason.

The recent foray into fiber is the direct result of loosening restrictions placed on the telecom industry by the Federal Communications Commission (FCC), Whitacre said.

For years, the FCC has required carriers to abide by pricing determined by state public utility commissions (PUC) for Unified Network Equipment-Platform . The UNE-P ruling gave competitive local exchange carriers a competitive shot at providing telecom services against the incumbent telephone companies like SBC, Verizon and Qwest Communications in the local markets.

Whitacre said the end of what he calls "unlawful" restrictions will allow SBC and other carriers to invest in next-generation technology. He did say, however, that the company would not make any "unilateral UNE-P changes" until the end of the year. Not mentioned were his plans for sharing SBC facilities with CLECs after Dec. 31.

The UNE-P ruling, he continued, resulted in lost jobs and lost opportunities for the company.

By declining to support a Supreme Court appeal of the UNE-P ruling by the circuit court, said Whitacre, the Bush Administration has set us on a path that closes one of the most contentious and horrible chapters in our history.