An Ignoble Experiment

AT&T's (NYSE: T) growing GigaPower footprint will be a competitive differentiator because it offers symmetrical upstream and downstream speeds of 1-Gig and can meet the growing amount of upstream traffic, said a top AT&T executive.

Speaking at the Oppenheimer 17th Annual Technology, Internet & Communications Conference, AT&T Group President and Chief Strategy Officer John Stankey said that upstream traffic is growing at double the rate of downstream traffic thanks to so many users uploading photos and video content via social networking sites. Specifically, Stankey added that upstream traffic surges at venues such as concerts and sporting events.

GigaPower's symmetrical capability, Stankey said, will be a differentiator against competitive services such as cable because DOCSIS 3.0 isn't able to deliver a robust upstream due to difficulty with node splitting.

Stankey also said that the company's U-verse broadband service is now delivering speeds of around 45 Mbps and that more than 60 percent of AT&T's U-verse base is on the 45 Mbps tier or higher. However, he added that AT&T believes customers will want speeds higher than that and that is the reason behind the GigaPower deployments.

He noted that the economics behind deploying GigaPower have become more appealing. The company is able to have more targeted builds and penetrate areas of cities where customers have shown a desire for GigaPower service.

He also said that AT&T believes that it's critical for the company to keep the wireless and wireline networks together. Even though the wireline business is growing much more slowly than wireless, he said that as the "tail" between the cell site and the customer shortens, backhaul will become increasingly important and that's why the wireline assets will become increasingly critical.

AT&T is in the midst of launching GigaPower in Miami and has said it will expand the GigaPower network to Dallas and Fort Worth this summer. It also plans to deliver GigaPower to Houston and San Antonio, as well as Charlotte, Greensboro, Raleigh-Durham and Winston-Salem in North Carolina; Nashville, Tenn., and Overland Park, Kan.

Additionally, the company has said that upon approval of its proposed acquisition of DirecTV, it will expand GigaPower to an additional 2 million customer locations. Regarding the DirecTV acquisition, Stankey said that the approval process with the Department of Justice and the FCC are going well and the deal is on track.

For more:
- see this webcast

2. C Spire will make 1 Gbps broadband more profitable through service bundling

By Sean Buckley

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C Spire's plans to deliver 1 Gbps fiber to the premises (FTTP)-based services throughout Mississippi may seem risky to some industry watchers, but it intends to make it profitable by offering service bundles.

Other services it will bundle with the FTTP connection include HDTV, wireless and its latest home automation product, which is being added into a suite of services it calls C Spire Home.

"We do have plans for it to be profitable," said Suzy Hays, vice president of consumer marketing for C-Spire, during the Adtran Connect event in Huntsville, Ala. "It does help that we have all of this fiber in the ground, but it's very expensive even then to get all the way to the home so that's why you see us doing things like adding additional other services."

Hays added that the ongoing rollout of the 1 Gbps service will "increase our share in wireless, which is really our bread and butter."

Having its own middle mile network and more than 60 years of experience in building out cable networks are two other advantages. Unlike Google Fiber (NASDAQ: GOOG), which is building out its entire network in its target communities from scratch, C Spire can leverage and extend its existing middle mile fiber network that it has used to backhaul its own wireless traffic.

"One thing that's a little bit different about us is that we have an extensive fiber backhaul network throughout Mississippi," Hays said. "We have been providing cable services via our sister companies already so that makes us a bit unique."

Besides the network facilities, the service provider has taken Google Fiber's approach to inspiring local communities to opt in and embrace the idea of using a 1 Gigabit FTTP service.

Similar to Google, communities that are interested in getting the service have had to commit $10 up front to C Spire.

In the markets where it has been rolling out fiber, including Ridgeland, Quitman and Starkville, Miss., the service provider has been seeing a good uptick in potential customers signing up for service.

"As we have made the commitment to build, we have had a very high success rate," Hays said. "One of the fears is it's a little bit of a gamble in that what if we build all this and they don't come? We have seen very good take rates and expect it to get better."

In the first round of its "get fiber first" contest, 33 cities responded to a request for information (RFI) in less than 30 days. After completing that process, C Spire selected nine city targets. These nine cities include 81 fiberhoods and 83,000 homes.

The service provider said that in order for each community to "go green" or be qualified to get service, they had to have 35-45 percent penetration.

Hays said what helped drive the effort was the involvement of the city leadership, including the mayors of Quitman, Ridgeland, and Starkville.

"We found out very quickly that if we led the effort we would not get the results we wanted," Hays said. "We really needed the cities to step up and the cities where the mayors got involved were the cities that went green first."

Quitman, a town of only 2,300 people, plans to leverage the fiber network to power a television studio at a local school, for example.

Although they initially focused on targeting nine cities, C Spire plans on extending the service to additional cities in the coming weeks.

However compelling the service may be, one of the key questions about C Spire's 1 Gbps service is the price. While $80 for a standalone 1 Gbps broadband data service can far surpass what traditional cable operators that today don't offer anywhere near the same speed, it would be out of reach for financially strapped families.

"We are keeping it simple at this point so we don't have a different option at this point," Hays said. "In order to get the return that we need to get the $80 is the minimum, but we're also working with Mississippi State and the people that are interested in the digital divide and looking for ways to get to those people that need a more affordable option."

Read more about: Fttp, 1 Gbps
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3. Frontier will not raise rates in Connecticut for 3 years

By Sue Marek

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To get approval of its acquisition of AT&T's (NYSE: T) U-verse video and satellite TV operations in Connecticut, Frontier Communications cut a deal with the Connecticut Attorney General in which it agreed to not increase the rates for basic primary residential service for 36 months. The company also said it will offer its basic broadband and stand-alone basic broadband product at or below Frontier's current prices.

As part of the deal, Frontier also committed to investing $64 million over 2015, 2016 and 2017 to expand and improve broadband in Connecticut and to accelerate its inspection of the outside plant it is acquiring, including telephone poles, to ensure the network is robust and reliable. Frontier will also simplify and improve the telephone pole administration within its Connecticut footprint.

Last December Frontier announced it was acquiring AT&T's landline and U-verse operations in Connecticut for $2 billion in cash. At the time, the company said it could achieve $200 million in annual savings without reducing AT&T's landline and U-verse workforces. In June the company issued a press release saying it would add 85 new union jobs, among other incentives.

If all goes well, and the FCC approves, the acquisition will be completed in the last quarter of the year, providing Frontier with almost 3,000 Connecticut workers and a million statewide customers.

Frontier's second-quarter residential revenues rose slightly to $497 million, up from $496 million in the first quarter. At the end of the quarter, Frontier had 1.93 million broadband customers and 393,900 total video customers.

For more:
- see this press release

Read more about: Frontier Communications
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4. Fiber-to-antenna applications driving growth of OC market, report says

By Sue Marek

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Optical components are seeing a rise in demand thanks to the surge in transceiver sales for fiber-to-the-antenna applications used in LTE network buildouts. According to research firm Ovum, the global optical component market saw revenues of $6.8 billion in 2013, which was an increase of 3 percent over 2012. And the firm expects the OC market to increase by 8 percent in 2014.

Ovum said that demand for 100G components for coherent transmission in WAN, datacom transceivers at 10 and 40G and fiber-to-the-antenna transceivers is strong and will help drive the market forward. In addition, it noted that the WAN OC segment of the market, which includes components in the telecom carriers' core and metro networks, continues to be the largest segment and is forecasted to grow at a compound annual growth rate of 11 percent to $7 billion in 2019.

That demand for the WAN OC segment will compensate for the ROADMs and amplifier segment, which was weak in 2013 and is expected to be weak again in 2014. By 2015, Ovum expects that this segment will pick up again as demand grows for directionless, colorless and contentionless ROADMs with a flexible grid.

Ovum analyst Daryl Inniss said that vendors should be optimistic about optical components in 2014 and beyond. He added that Ovum believes that 100G metro-optimized transmission gear will begin to ramp in 2015 and that will bode well for components makers. He added that there are also emerging opportunities in data centers for high-speed interconnects.

For more:
- see this release

Read more about: Optical Networks
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5. BT, Avaya team on cloud services

By Sue Marek

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