Revisiting Gigabit Broadband: Will 100+ U.S. Telcos Light a Fire Under Cable Operators?

Erik Keith

Erik Keith

Summary Bullets:

  • In the past few months, ADTRAN and Calix have both publicly asserted supporting more than 50 customer networks that can offer Gigabit broadband connectivity, primarily in the U.S. market. Alcatel-Lucent also provides the access networking solutions that anchor Gigabit service delivery in several high-profile, pioneering Gigabit networks. At present, more than 100 U.S. operators offer Gigabit services.
  • After first downplaying the need for Gigabit services, major cable operators – joined by telco AT&T – have asserted pending Gigabit service implementations where demand dictates. But, cable network support for mass-market residential Gigabit service deployments will require major network upgrades (ultimately FTTH).

Six months ago, I asked, “Gigabit Broadband: Do We Need It? Why Not?” Since then, we have seen some additional momentum on the Gigabit front, at least in the U.S. market, with notable fixed access networking vendors ADTRAN and Calix both announcing their support of 50 networks, cities or communities that offer Gigabit connectivity. While there are some devil-in-the-details caveats to these claims (for example, Calix’s separate counting of CenturyLink’s Gigabit deployments in eight different U.S. states), the bottom line is that in a surprising number of U.S. metro areas, Gigabit services are a reality. As an added bonus, a good number of rural and smaller-market operators – exemplified by C Spire (leveraging ADTRAN gear), which is deploying Gigabit services in 10 Mississippi cities/towns – are also investing in the Gigabit future. Finally, there is Google Fiber, which is still keeping key details about its network build-out and subscriber base secret, but is apparently on the verge of announcing another major shift forward or geographic expansion.

So, the good news is that Gigabit connectivity, almost inconceivable as a mass-market service just a few years ago, has evolved from a pie-in-the-sky, end-of-the-broadband-rainbow technology, to an aggressively hyped marketing concept, to actual network implementations more quickly than many people expected. What started out as a smart grid network and service build by Chattanooga, Tennessee’s Electric Power Board (EPB) utility half a decade ago – EPB pioneered mass-market residential Gigabit service in the U.S., using Alcatel-Lucent GPON solutions – has generated strong momentum, undoubtedly due to the Google Fiber factor. Until Google Fiber entered the fray, the overwhelming majority of U.S. operators had no plans for delivering Gigabit services to residential customers until at least the year 2020. Google Fiber has effectively lit the fire for Gigabit demand and deployment, serving as the primary accelerant for this still-formative service.

Most surprised by the Gigabit momentum were the cable operators, and at least one major telco (AT&T), to the point where several company executives have downplayed the need for Gigabit services. However, with the Google Fiber threat becoming more pervasive – i.e., its February 2014 announcement that it will target more than 30 additional U.S. metros – AT&T was spurred to react with an April 2014 announcement touting a comparable plan for a 100-city build-out (in 25 metro areas) of its U-verse with GigaPower service. However, AT&T flip-flopped (twice) on its proclaimed fiber network expansion, first citing the uncertainty about net neutrality as a reason to “pause” its fiber builds. The provider then claimed it was misinterpreted and the GigaPower builds would proceed as planned, albeit with a bargaining-chip reference to its pending acquisition of DirecTV as an important factor in its poker match with the FCC.

On the cable side, Comcast and Time Warner Cable countered the Google Fiber hype by touting their own plans for Gigabit service offerings. Yet, even with DOCSIS 3.0 in mass deployment, and 3.1 and Converged Cable Access Platform (CCAP) implementations waiting in the wings, the cable operators will have an increasingly tougher time of delivering Gigabit services. As these Gigabit networks, most of which are still in their preliminary stages of build-out, evolve into truly mass-market offerings, cable MSOs – which still dominate the U.S. and North American broadband market with almost 60% of fixed broadband subscribers (and an even higher percentage of multichannel video subscribers) – will be forced to leverage their fiber assets even more extensively. Ultimately, this could mean full-fiber FTTH access networks (most likely 10G EPON) to level the playing field – the sooner, the better.

About Erik Keith
As Principal Analyst for Fixed Access Infrastructure, Erik is responsible for tracking major technological, strategic and tactical developments in the wireline broadband access market. Erik's primary areas of coverage include FTTP/PON systems, DSLAMs, DLCs/MSAPs, cable access and head-end systems, as well as digital media infrastructure solutions.

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