On May 29, 2003, the three largest RBOCs (BellSouth, SBC, and Verizon) announced that they had adopted a common set of technical specifications for the delivery of fiber-to-the-premise (FTTP). In October 2003, Information Gatekeepers issued "FTTP - The RBOCs' Light Sword?" That report detailed various possible scenarios for FTTP deployment, identified the most likely, and did the same things for the vendors. While that report (and its subsequent update in 2004) turned out to be very accurate, enough new information has emerged to justify an entirely new report on the subject.

In 2003, the primary FTTP event (and the main subject of our first report) was that three RBOCs had actually agreed on a direction, and issued an RFP. In 2004, the main story was the technology and the fact that the RBOCs (at least Verizon) were serious about this program and had begun deployment. In 2005, some of the previous story lines are important, but the main story is that the RBOCs are going into residential video delivery in a big way. After so much testing, learning, false starts and failures, the RBOCs are really committing to a massive effort to compete on a network basis in residential video delivery. For those who have been in the industry for a time, memories go back to 1985-7 and Cerritos, CA and Orlando, and other early video trials. One wonders if enough has been learned to be successful in this very difficult business. This latest version of our FTTP Report will highlight the video effort of the RBOCs as well as giving a complete update on FTTP.

The RBOCs, all four to greater or lesser extents, are now in the process of rolling out FTTP. Verizon has a monumental effort underway, and the others are in various stages (lab tests, minor deployments or preparing massive rollouts) of deployment. The RBOCs are also on the verge of actually moving into the video business in a massive way. At least two of the four RBOCs are expected to be in the residential TV delivery business before the end of 2005. Several relatively new technologies will be deployed in their entries into that business, and the RBOCs will use just about every imaginable combination of those technologies to achieve their objectives. This report covers all details of these activities.

In other times, the announcement of the FTTP RFP would likely be viewed by most with a big yawn - just another technical standardization. However, in today's times, this was the biggest news in the telecommunications world - perhaps the biggest in years. The initial announcement was followed by a joint RFP issued in June 2003 to selected vendors for the FTTP equipment. Responses and vendor selections were scheduled for the third quarter of 2003, with initial deployments to begin in 2004. As we will detail, this schedule was not completely met, but the RBOCs were close.

These three RBOCs serve 136,000,000 of the 187,000,000 access lines (73%) in the U.S., which is the main reason for the excitement. These three companies are the powerhouses of the telecom world. Their 2002 capital expenditures were 76% of the total by major telephone companies, and over 46% of all capital spent in 2002 by cable companies, IXCs and major telcos! Clearly, these three companies have the financial power to rule the equipment markets.

The equipment vendors have looked at the potential size of a project to bring fiber near the customers of these three companies, and they visualize a return to the go-go days of the late 1990s telecom market. At around $1,500 capital cost per installed fiber line, it is easy to see how a program that involves over 100,000,000 lines could easily drive a return to profitability for many equipment vendors.

This report will consider the issues of the background competitive landscape -
especially now that the RBOCs have swallowed up the two largest IXCs (and CLECs) ; the details of the RBOC PON; details of the various RBOC access architectures, and how video fits into these architectures; details of the various options for deploying video - FTTX, broadcast video and IPTV; the current deployment scenarios; an analysis of the economic impact (capital and on the overall network) of that deployment; the specific plans of each of the RBOCs; vendors of the equipment and software; and details of the video plans. This update will add the information on the selected vendors, as well as illustrating the impacts of the so-far identified deployment plans.