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Project LightSpeed
SBC: 18 million fiber users in three years
by Karl Bode 11:22AM Thursday Oct 21 2004
According to SBC, some 18 million subscribers should see fiber fueled internet, television, and phone service in just three years. With the FCC eliminating fiber regulation, "Project Pronto" has a new name, and SBC - and the other bells - no longer have any excuse for failure.

SBC yesterday announced (press release) they've selected Alcatel to build the company's next generation fiber network. After the announcement, Alcatel stock jumped some 4.8 percent on the European market. Dubbed "Project Lightspeed", SBC says they'll deliver fiber broadband, video, and phone services to some 18 million households by the end of 2007 - at a cost of around $6 billion.

"We're moving at light speed to bring IP-enhanced services to customers," says SBC chief Edward E. Whitacre Jr. Last fall Whitacre angered many hardware vendors when he stated he didn't see the incentive for fiber to the premises. Not only because of regulation, but because per-home installations were simply too steep.

That was then, this is now.

While the triennial review paved the way in keeping competitors from new fiber builds, the FCC last week went even further, declaring fiber to the node builds within 500 feet of customer premises didn't need to be shared. After the ruling, SBC proclaimed they'd cut the deployment schedule for project lightspeed from five years to three. The bells had been complaining for years that there was no incentive to build fiber networks with regulation in place.

No incentive, despite the fact cable dominates North American broadband, and the bells need television services tied to DSL bundles to better compete. No incentive, despite the fact the local and long distance business is stagnant, and the bells are morphing into pure, bandwidth hungry data companies that need fiber to survive.

Installation costs, the other bell obstacle, have dropped only slightly since last fall. Home installs for the Verizon fiber trials in Keller, Texas are estimated to cost between $1,200 and $1,500 per household. The entire project, which has many of our users' hearts a-flutter, cost some $15 million to complete, and required roughly 1.2 million feet of fiber. Not exactly a profit bonanza. Not likely to appear in rural America either.

SBC's solution is to run fiber to the node, then find alternative solutions for last mile connectivity. While Verizon embraces FTTP, SBC is taking a different approach, exploring the potential in ADSL2+ and VDSL as less expensive last-mile options. As users in our SBC forum explore, SBC has been conducting ADSL2+ trials in Missouri.

Still, it's one thing to repeatedly promise next-generation connectivity, but quite another to actually deliver it. We've explored a decade worth of Verizon fiber promises that were never delivered. We've discussed the billions in tax-funded incentives Verizon received in Pennsylvania to build fiber networks, only to be let off the hook. That hasn't stopped the media from applauding like children watching a clown make balloon animals each time a bell issues another press release.

As for SBC, remember Project Pronto? Pronto was a multibillion-dollar broadband buildout, framed with eerily familiar optimism (see 1999 story), but ultimately scrapped due to "regulatory uncertainty". Project Lightspeed is Pronto, reborn.

But while the FCC ruling is a big win for the bells, it's also dangerous, since regulation can no longer be blamed for deployment failures. If either Verizon or SBC fails to deploy fiber to the people, will they finally be held accountable after a decade worth of promises?

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