How PON will help sell copper: while FTTP steals headlines, copper enhancements deal bandwidth

America's Network, Nov 1, 2003 by Carol Wilson

That would seem to be bad news for a number of companies still working hard at enhancing the bandwidth capabilities of existing copper networks, including equipment vendors delivering Ethernet over copper solutions and those delivering a better brand of DSL.

In fact, however, enhanced copper technology is not being overshadowed by PON hype--though it is facing the same tough economic climate that faces all who sell telecom gear. When the purse strings loosen, enhanced copper systems that are still surviving are in a position to compete.

"Just as ATM wound up selling a lot of Frame Relay, PON will sell a lot of copper," says Daniel Briere, CEO of Telechoice, an industry consultancy focused on the broadband edge. This is particularly true outside North America, he says, where most DSL advances now take place. "In Japan, we see PON networks plugging into VDSL for the final connection," says Briere. "VDSL prices are pretty low and the last 'little bit' of a network is always going to be an economic decision."

COPPER-BASED ETHERNET

Even in North America, where the Bell companies are backing PON, the vast majority of office buildings still is connected by copper. That reality gives hope to companies such as Actelis Networks, Ceteris Networks and Hatteras Networks.

Mike Horton, senior director of marketing for Ceteris, says his firm's extensive research shows that as little as 3.5% of the nation's buildings are fiber-fed. Ceteris' copper-based system, which bonds lines together to create higher-speed Ethernet links, is in certification with two customers. Spediant Systems also offers a copper bonding solution that is in several field trials here and abroad.

Hatteras Networks, which pioneered Ethernet over copper, just suffered through a round of layoffs but has been buoyed by the interest in copper-based Ethernet resulting from sales of optical-based Ethernet. "The telephone companies have quickly picked up on the interest in Ethernet," says Sheehan, whose company's product is in trials with unannounced customers. "It's a much easier sell if you can tell a CIO that you can connect all of his locations, when most of those are on copper."

Actelis, which uses G.SHDSL in its Ethernet over copper transport product, has more than 35 customers or trial customers, says David Perry, vice president of corporate marketing. Analyst Michael Kennedy of Network Strategy Partners says the Actelis product is a good example of a point solution that solves a practical problem.

Kennedy believes the PON hype is intended to sway regulators to loosen the rules which require the Bell companies to resell local facilities at cheap prices.

Transition plans

Meanwhile, competition marches on and the threat that cable modems pose to telcos inspired Celite Systems to design a new DSL-based technology that can be used to pre-provision DSL service to an entire neighborhood. Turning up individual customers then becomes a point-and-click exercise, dropping the cost of DSL tremendously.

"We see the local companies still working on DSL coverage, because they see the cable threat," says Roger Dorf, president and CEO of Celite, which has finished one U.S. trial and is shipping systems overseas.

Tom Starr, chairman of The DSL Forum, believes most local companies have a short term copper strategy and a long-term fiber strategy. The DSL Forum recently issued two technical reports that together outline a transition plan which allows companies to use their existing ATM infrastructures and with relatively little additional capital to install media gateways and Broadband Remote Access Servers (B-RAS), move to an Internet Protocol-based future and introduce new online service capability.

"This will let customers turn up more bandwidth for a movie or gaming or remote education, and then turn it back down," says Starr. "The service provider gains revenue from the enhanced service and from the content provided."