An Ignoble Experiment

Cbeyond, a competitive telco that's in the process of being purchased by Birch Communications, is extending dark fiber to small to medium businesses that reside in large, multi-tenant buildings.

The CLEC will focus on six markets, including Atlanta, Chicago, Dallas, Denver, Los Angeles and San Francisco.

This dark fiber service builds on the TotalNetwork fiber-based service it launched in 2012. Later in 2013, the service provider extended its Ethernet footprint to more than 190,000 multi-tenant units (MTUs) in the United States.

Customers will now be able to get access to the dark fiber facilities that are already on its network (on-net) or are in close proximity to its fiber rings. Leveraging Zayo's facilities, Cbeyond's fiber network now has over 10 percent of its metro Ethernet customer base on its fiber network. In addition to fiber, the service provider offers Ethernet over Copper (EoC).

"SMBs have typically been excluded from fiber network availability, but now there is no reason for that market to be underserved," said Mark Masi, vice president, fiber implementation and administration, at Cbeyond.

Cbeyond's effort to bring dark fiber to SMBs is helping to close what Vertical Systems Group calls the "fiber gap."

According to a recent report by the research firm, service providers continued to narrow the fiber gap in 2013 by expanding facilities to 39.3 percent of commercial buildings with 20 or more employees. The remaining 60.7 percent of buildings are in the Fiber Gap with no accessibility to fiber.

For more:
- see the release

2. CenturyLink's Ewing: Fiber-based backhaul revenue will start to surpass displaced TDM circuits by the end of 2014

By Sean Buckley

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CenturyLink (NYSE: CTL) may finally be seeing light at the end of the legacy to next-gen Ethernet-based fiber to the tower (FTTT) revenue migration.

During the 42nd Annual J.P. Morgan Global Technology, Media and Telecom Conference, Stewart Ewing, CFO and EVP of CenturyLink, said that FTTT revenue is rising up to a stage where it is starting to surpass legacy losses from wireless operators shutting down their TDM-based circuits.

"If you look at our wholesale business, strategic revenue was almost flat quarter to quarter, meaning that fiber to the tower revenue we're seeing is accelerating to a point where it is covering the DS1s and DS3s that are being disconnected associated with customers moving to Ethernet services," Ewing said.

Such a trend took place in its first-quarter 2014 wholesale segment earnings where it ended the period with over 19,200 fiber-connected towers, up nearly 24 percent from the first quarter of 2013.

By the end of 2014, CenturyLink expects to have built out fiber to between 21,000 and 22,000 towers. The 32 percent of the towers that won't have fiber to them are in rural areas and will not have fiber to them for a long time, if ever.

While Ethernet-based FTTT services are its growth engines, strategic revenues remained flat year-over-year at $570 million as increases in wireless carrier bandwidth demand and Ethernet sales were offset by declines in copper-based revenue.

While CenturyLink expects revenue compression from TDM disconnects to continue, much of that process will be completed by the end of 2014.

"We still expect some to continue, and we would hope that by end of this year we would have been through most of that and be at the point that the revenue for the fiber-based services--at least to those towers that they are connected to--is exceeding the copper-based revenue we have," Ewing said.

Ewing added that "we think the backhaul revenue will bottom in 2014 and start to de-accelerate."

For more:
- listen to the webcast (reg. req.)

3. Verizon broadens aim on healthcare industry by expanding its HIPAA-enabled data center services

By Sean Buckley

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Verizon (NYSE: VZ) is bringing its Healthcare Enabled Services to five additional data centers as a way to help the healthcare industry meet the federal Health Insurance Portability and Accountability Act (HIPAA) requirements for safeguarding electronic protected health information.

Besides Miami and Culpeper, Va., healthcare organizations will be able to now securely store their ePHI in Verizon's data centers located in Richardson, Texas; Santa Clara, Calif.; Englewood, Colo.; Carteret, N.J.; and Elmsford, N.Y.

A key focus of the expanded product set is about enabling hospitals and other healthcare organizations to control costs and freeing up resources so they can focus on their core mission of serving patients.

"For many healthcare organizations, storing and managing ePHI on their own can be cost-prohibitive," said Rich Black, global vice president of Verizon Enterprise Solutions Healthcare Practice, in a blog post. "Verizon's Healthcare Enabled Services allow healthcare organizations to focus on their core competency--delivering care to patients--while letting Verizon focus on providing an end-to-end infrastructure management solution that securely delivers enterprise-class connectivity, availability and reliability."

Under Verizon's Healthcare Enabled Services umbrella, the service provider offers various services, including: colocation; enterprise cloud (cloud plus back-up); managed hosting (database, applications, back-up), as well as intrusion detection protection and log aggregation for cloud and managed hosting.

Expanding its focus on the lucrative healthcare segment makes sense as Verizon tries to ramp up its strategic business revenues like cloud, which rose 1.8 percent to $2.1 billion during the first quarter.

For more:
- see the release

4. GPON spending rose 44% in Q1, says Infonetics

By Sean Buckley

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Service provider spending on GPON-based fiber to the home (FTTH), particularly in China and EMEA, rose 44 percent in a traditionally slow season for the first quarter of 2014.

"Compared to the year-ago quarter, GPON equipment revenue is up a solid 44% in the first quarter of 2014, a result of continued fiber-to-the-home spending in China and EMEA," notes Jeff Heynen, principal analyst for broadband access and pay TV at Infonetics Research.

Overall, the global broadband equipment market (DSL, PON, and Ethernet FTTH) slid 5 percent sequentially in the first quarter of 2014, but up 23 percent year-over-year, totaling $1.89 billion.

The only equipment category that grew sequentially in the first quarter is PON (+0.1%).

Growth patterns in EMEA and China were driven by different dynamics.

In EMEA, both vectored VDSL and FTTH continued to rise. Driven by deployments by KPN, Belgacom, Turk Telecom and Deutsche Telekom, EMEA continues to reap major vectored VDSL2 projects, while FTTH spending in Russia and the Middle East continued to ramp.

While China Telecom and China Unicom are slowing their FTTH investments to focus on LTE rollouts, China Mobile increased its FTTH spending on the China Tietong wireline network it inherited in 2008.

Another market worth watching will be North America, where three of the largest wireline telcos--AT&T (NYSE: T), CenturyLink (NYSE: CTL) and Windstream--are ramping up their deployment plans for VDSL2 and GPON.

"AT&T, CenturyLink, Windstream, and tier 3 operators all have dedicated plans in place to expand their VDSL and GPON deployments in an effort to keep pace with cable DOCSIS 3.0 rollouts and fiber offerings from upstarts like Google," Heynen said.

For more:
- see the release

Read more about: Gpon, China
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5. Cisco, Dimension Data create pact focused on hybrid cloud adoption

By Sean Buckley

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Cisco and Dimension Data announced that they are expanding their long-standing relationship with a focus on driving businesses' movement to a hybrid cloud environment.

Under the terms of the agreement, Cisco will use Dimension Data's Managed Cloud Platform and SaaS solutions to deliver a suite of mid-market centric cloud services to its customers and resellers.

The two companies will also jointly deliver an infrastructure-as-a-service (IaaS) solution that will be packaged with Cisco technology and software-as-a-services (SaaS) applications, including Microsoft (NASDAQ: MSFT) SQL Server and SharePoint.

These Cisco-branded solutions will be sold by Cisco directly and through its channel partner community.

Dimension Data offers its cloud service via 10 Managed Cloud platforms, with plans to expand to 13 locations by September 2014. By becoming one of Cisco's Intercloud partners, Dimension Data will evolve its Managed Cloud Platform to embrace Cisco's Application Centric Infrastructure (ACI) and Intercloud Fabric.

The partnership with Dimension Data builds on Cisco's plans to build its global Intercloud with partners targeting the Internet of Everything trend.

By deepening its relationship with Cisco, Dimension Data will be able to put its cloud services instantly in front of more businesses that are looking for hybrid solutions. It also comes at a time when the company has been expanding its presence in key markets such as the U.S., one that it bolstered through its recent acquisition of Nexus.

For more:
- see the release

Read more about: Dimension Data, Cisco
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Feature

Grading the top 13 ILECs in Q1 2014

By Sean Buckley

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