On May 29, 2003, the three largest RBOCs (BellSouth, AT&T, and Verizon) announced that they had adopted a common set of technical specifications for the delivery of fiber-to-the-premises (FTTP). Since then, FTTP has become the "gold standard" in local access. Verizon is installing FTTP BPONs at a rate of 3,000,000 per year. It appears other major telcos are ready to jump on this bandwagon, and many smaller telcos are installing similar access architectures across the country. AT&T is installing FTTN (and some FTTP) at the rate of about 2,000,000 per year with a speed-up promised.

In the midst of all this success, we are about to see some major changes! The architecture is going to change; the players are going to change (more will be joining); and the rate of installation will increase! Why do we face change in this very successful program? What is the new architecture, and why is it being selected? What are the other major RBOCs going to do? This report will address these questions.

We have now been producing annual reports on FTTP since before the program was actually originated. This is the most comprehensive of those reports, and it has the most useful direct forecast information ever presented on FTTP. This latest incarnation of our efforts to keep our clients completely up-to-date on FTTP will focus on the following:

-The substantial progress to date for FTTP
-The changes we see coming for FTTP from new organizational structures
-Changes we see coming for the architecture

Our forecasts for the future, including for RBOCs not now involved

The RBOCs, all three (now that the AT&T/BellSouth merger has been consummated) to greater or lesser extents, are now in the process of rolling out FTTP. Verizon has a monumental effort underway, and the other two are in various stages (lab tests, minor deployments, or preparing massive rollouts) of deployment. The RBOCs have actually moved into the video business in a massive way. As forecast in our 2005 and 2006 reports, two of the RBOCs are in the residential TV delivery business. Several relatively new technologies have been 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 (and the subsequent RFP for GPONs) 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 made in the third quarter of 2003, with initial deployments to beginning in 2004. As we will detail, this schedule was not completely met, but the RBOCs (at least Verizon) were close. Then in late 2005, the RBOCs issued a RPF for GPON approaches to FTTP. In mid-2006, Verizon announced awards under that RFP.

These three RBOCs serve 123,000,000 of the 180,000,000 access lines (68%) in the U.S., which is the main reason for the excitement. They also control the largest interexchange carriers and the largest cellular phone companies. These three companies are the powerhouses of the telecom world. In a recent year, their capital expenditures were 76% of the total by major telephone companies, and over 46% of all capital spent that year by all telecommunications carriers! 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 $1,000 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 and the GPONs
-The current deployment plans of the RBOCs and our forecast for changes;
-An analysis of the economic impact (capital and on the overall network) of the current plans, as well as of our forecasted deployments
-Extensive forecasts of FTTP and associated equipment are provided, particularly GPONs vs. BPONs
-Forecasts for the relative use of FTTP, FTTN, and FTTC.

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;

Vendors of the equipment and software covered in detail

About the New Appendix

In April of 2007, we released out latest Report on FTTP, titled “FTTP — The New Standard and How It Is Changing — Already! AT&T, Verizon and Qwest Plans — 2007.” While this is a very detailed report (over 140 pages and 75 Figures) there is always something else needed. In response to some of our customers, we have, thus, developed this Appendix to add many more charts and a great deal of statistical information not in the original report.

The emphasis in this Appendix will be on quantifying the parts of the FTTP effort. We will start with some information on customers (both served and houses passed); move to equipment requirements (BPONs and GPONs, central office end and field end); and finish with estimates of the fiber cable needed. In all cases, the material in this Appendix is completely consistent with the original report. All new forecasts are directly and concretely tied to the forecasts in the original work. In most cases, we will provide quantities based on our forecast and on the currently stated plans of the RBOCs, which are a great deal different.

We have added 19 new graphs and over 20 pages of material to a report that already has about 140 pages and 70+ charts. This new material deals quantitatively with the needed central office equipment and the needed fiber to implement the FTTP plans. We have also elaborated on our forecasts for added FTTx customers of each of the RBOCs. All of the data is provided for the existing plans of the RBOCs and for our forecasts of what they will actually do. As readers will see, these are very different things!