SBC High Tails Fiber Buildout

WASHINGTON — Within an hour of the Federal Communications Commission’s
(FCC) vote today to further free incumbent carriers from line sharing
obligations with competitors, SBC Communications said it would “dramatically
accelerate” its plan to build a new fiber-optics network.

The FCC decision added fiber-to-the-curb (FTTC) networks to the list of
high-speed lines the Baby Bells do not have to lease at regulated prices to
long distance carriers and competitive local exchange carriers . In early
2003, the FCC ruled incumbent fiber-optic lines, including fiber-to-the-home
(FTTH) networks, did not have to be unbundled to competitors.

FTTC networks run fiber lines to within 500 feet of a customer’s home.
According to the FCC, the new rules allow companies to choose between FTTH
or FTTC networks based on “marketplace characteristics, rather than
disparate regulatory treatment.”

The FCC also ruled that incumbents are not obligated to build traditional
telephone architectures, such as time division multiplexing (TDM) into new
packet-based networks or into existing networks that never had TDM

The vote prompted SBC to announce it would provide 18
million households with high-speed services during the next two to three years,
rather than the five years the company originally projected for the project.
Known as Project Lightspeed, SBC will provide integrated IP-based
television, ultra-high-speed broadband, IP voice and wireless bundles of
products and services.

“The shovel is in the ground, and we are ready to go,” SBC Chairman and CEO
Edward E. Whitacre Jr. said in a statement. “Rational rules promote
innovation and investment in new networks and services for consumers. And so
with this positive policy movement, the delivery of next-generation
broadband and video services is no longer at some distant point in the
future. The future is now.”

SBC said it would deploy 38,800 miles of fiber at a cost of $4 billion to $6 billion.
The company said the rollout would double the amount of miles deployed for
its DSL network.

An SBC spokesperson said the company decided to increase the pace of its new
fiber rollout less on the line sharing provisions vote than on the TDM
decision. “That clarifies to us we don’t have to unbundle,” the
spokesperson said.

The spokesperson also said SBC plans to install FTTH in new developments and
fiber-to-the-node to existing copper wire customers. According to SBC,
this means bringing the fiber loop to within 5,000 feet of groups of 300 to 500

The FCC decision was in response to a petition filed last year by BellSouth
and SureWest Communications asking the agency to reconsider portions of its
2003 Triennial Review Order to include FTTC as exempt from unbundling

“Deep fiber networks offer consumers a triple play of voice, video and
data services and an alternative to cable,” FCC Chairman Michael K. Powell
said. “By limiting the unbundling obligations of incumbents when they roll
out deep fiber networks to residential consumers, we restore the marketplace
incentives of carriers to invest in new networks.”

Powell said the decision to limit the unbundling obligations of the
incumbents is a “proven success in driving the deployment of next-generation

FCC Commissioner Michael J. Copps sharply disagreed with Powell in voting
against the measure, claiming that expanding the FTTH exemption to FTTC
restricts broadband competition to consumers.

“The [FTTC] loop represents the prized last mile of communications. Putting
it beyond the reach of competitors can only entrench incumbents who already
hold sway,” said Copps. “Monopoly control of the last mile created all kinds
of problems for basic telephone service in the last century, and now we seem
bent on replicating that sad story for advanced services in the digital

Copps warned that the decision “constitutes an ominous precedent for the
small business community. Neither does it bode well for independent
providers of VoIP services that don’t own or control the
physical layer of the network.”

SBC’s Whitacre said in his statement, “The path forward is much clearer.
This is the latest in a series of broadband rulings that demonstrate this
administration and the FCC understand that keeping outdated regulation off
of tomorrow’s technology will boost jobs, investment and innovation.”

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