16 | BROADBAND PROPERTIES | www.broadbandproperties.com | June 2008

“W ired and Inspired” is the motto of Fort Wayne, Indiana, one of the first cities ever connected to Verizon’s FiOS network. (Graham Richard,

Fort Wayne’s former-mayor-turned-broadband-evangelist, who coined the phrase, appears in our Summit coverage in this is-sue.) I’m feeling wired and inspired myself after putting this roundup together. Why? Well, it’s hard not to be inspired after seeing the lengths to which deployers will go to bring FTTH services to residents’ homes. For example:

• In Alaska, a telco searches for – and finds – a fiber manage-ment system that can withstand below-freezing tempera-tures, four feet of snow and swirling glacial dust.

• In New Mexico, an entrepreneur purchases assets from a bankrupt company and sends its robots back to work stringing fiber beneath Albuquerque.

• In Minnesota, a town that voted three-to-one in favor of a municipal fiber optic network stands up to a lawsuit de-scribed by municipal telecom expert Chris Mitchell as “in-tended to run up costs, disrupt business plans, and scare away other communities who are considering building their own networks.”

• In the UK, an engineering company patents a new tech-nology and begins deploying fiber through 360,000 miles of sewers.

• And in Utah, a municipal utility whose fiber network is stymied by restrictive legislation finds a “light at the end of the tunnel” when the network is purchased by a competi-tive provider determined to make the system work.

I hope you’re feeling inspired by now, too!

Municipal Deployments: Another Hurdle for Monticello, Minnesota

FiberNet Monticello, the municipal FTTH project that was approved last year in a referendum by citizens of Monticello, Minnesota, has obtained commitments

from private investors to purchase revenue bonds sufficient to finance the project. The city’s Web site says, “Obtaining inves-tor support for the FiberNet Monticello business plan is a true demonstration of the financial viability of the project and a key milestone in development of the system.” But just before the city council met to vote on authorizing sales of the bonds, in-cumbent TDS Telecom (itself an FTTH provider, though not in Monticello) filed a lawsuit against the city, claiming that the project violates state laws.

Because the relevant state law expressly permits revenue bonds to be issued for revenue-based utilities and public con-veniences, Monticello city government says it is confident that it is well within its legal rights and will prevail against the suit;

Fiber deployers show creativity, vision and determination in bringing top-drawer FTTH services to communities at a time of economic uncertainty. It isn’t always easy.By Masha Zager ■ Broadband Properties

Wired and InspiredWired and Inspired

June 2008 | www.broadbandproperties.com | BROADBAND PROPERTIES | 17

Matanuska Telephone Association (MTA), an Alaska telephone cooperative that launched its first FTTH projects last year, has begun a large fiber deployment about 50 miles north of Anchorage. This is a particularly challenging build because of the savage weather in the location, where three to four feet of snow is not unusual. MTA selected Clearfield’s FieldSmart Fiber Scalability Center and ruggedized splitter modules for its outside plant because of their ability to withstand the weather. The splitters come with “cold weather tails” to protect them, and the cabinets were modified with 18-inch ex-tension bases to help keep them out of the snow.

Another unique challenge for MTA is glacial silt. “We have a lot of glacial dust in the air, so a tight seal on the cabinets is of supreme importance. It’s always important to keep the connectors clean during an install and make sure they’re good and tight so the glacial silt doesn’t work down in there,” explains MTA’s outside plant net-work planner, Rod Schultz.

MTA was founded in 1953 to bring telephone service to the Matanuska and Eagle River Valleys, and now serves 38,000 customers across nearly 10,000 square miles with services including voice, video and high-speed Internet access.

Liberty Communications, an Iowa ILEC, is prepar-ing to upgrade its existing copper plant to an all-fiber network in the towns of West Branch and West Liberty. The $7.5 million project is expected to be complete in 2009, and Liberty plans to offer triple play services. The company’s newsletter says, “Looking at the indus-

try, we see an ever increasing demand for bandwidth. As we look to the future our goal is to ensure that the towns of West Liberty and West Branch have the un-derlying infrastructure to keep pace with the chang-ing world. We are committed to doing our part to lay the foundation for advanced services for residential customers and to build an advanced network for busi-nesses, thus ensuring the economic vitality of the area.” BTC, an Iowa telephone company doing business as Western Iowa Networks, received $10 million in broad-band loan funding from USDA Rural Development. Ac-cording to Senator Tom Harkin’s office, the loan will be used to construct a fiber-to-the-home system in the town of Carroll, and to provide advanced communica-tion services to about 2,000 subscribers. Senator Harkin says, “In the 21st century, high-speed Internet access is a basic, essential utility. Farmers and others need it to do business. Students in rural America need it to do their homework and connect to the rest of the world. Yet for far too long connecting rural America to broadband ac-cess was wrought with obstacles. This loan helps to re-move some of those obstacles.”

Fallon, Nevada-based CC Communications, which of-fers FTTH services in a portion of its service area, is replac-ing its legacy Class 5 switch with a TaquaWorks softswitch and unified communications suite, in order to provide advanced converged services across its FTTH-based IPTV and wireless networks. Converging services over Taqua-Works will allow CC Communications both to generate new revenue streams and reduce operational expenses.

IndependenT TeLCos: neITher snoW, nor rAIn, nor GLACIAL dusT…

CityLink Telecommunications emerged from stealth mode last month to host a “sneak peek” at its new fiber-to-the-home services. The services were displayed during the grand opening of Albuquerque’s new Emerald Building, a commercial site to which CityLink supplies dark fiber.

CityLink’s new residential service will start out providing Internet access at 50 Mbps symmetrical for about $70 per month plus installation, or 100 Mbps symmetrical for about $130 per month plus installation. Voice services will also be available, and the company is testing video services.

Working with developers, CityLink has already con-nected more than 150 new condos and loft apartments in downtown Albuquerque, and expects to expand the de-ployment throughout much of the downtown area, poten-tially to tens of thousands of residents.

In a conversation with Broadband Properties, City Link president John Brown explained that his company bought a metro fiber network out of bankruptcy in 2005 and has been working since then to upgrade it, including installing Active Ethernet equipment from Occam Networks. It is now

deploying residential and commercial services as a com-petitive provider. The number of commercial buildings con-nected to the network has been increased from 19 when the network was purchased to more than 50 today.

Two noteworthy aspects of the CityLink fiber network:

• The network is completely open access. Although City-Link is providing services, other carriers are welcome to lease the fiber access to homes (Active Ethernet tech-nology makes open access easier to manage) and also dark fiber to enterprises.

• The carrier whose assets CityLink purchased had de-ployed fiber optics through the sewer system using robotic technology, and CityLink is continuing to use this approach, which Brown says is faster than tradi-tional trenching and boring. Part of the assets purchase includes right-of-way agreements in 50 markets across the US, and CityLink is now actively pursuing deploy-ments in several markets in New Mexico and other southwestern states.

neW open ACCess neTWork In neW MexICo

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Last month we reported that competitive provider Broadweave networks planned to buy iProvo, the financially troubled municipal FTTP network owned by the city of Provo, Utah. The proposal engendered some controversy – at least one other service provider protested the sale, and some elected officials also ex-pressed reservations – but it was approved on June 4 by the Provo City Council in a 4-3 vote.

In April 2007, Provo City issued an RFP for telecommu-nications services on the network, and Broadweave was one of several companies proposing not only to provide services but to take over the network itself. Lengthy ne-gotiations led to the agreement that was signed in early May 2008. The city council approval paves the way for the acquisition to close on June 30, with Broadweave’s service going live on July 1.

ensurInG A sMooTh TurnoverEven before the city council vote, Broadweave began taking steps to ensure a smooth turnover. First, in keep-ing with its proposal to combine network operations and service provision under a single roof – which the city as owner was legally constrained from doing – it acquired Veracity Communications, a profitable pro-vider of business voice and data services on the iProvo network now. (Veracity also provides services on UTO-PIA and Qwest networks.) The acquisition resulted in a merger of operations and two of Veracity’s principals joining Broadweave’s executive ranks. Broadweave has said that it intends to focus more strongly on providing business telecommuncations services in Provo.

In the next step, Broadweave reached separate agreements to acquire and service the Provo-based cus-tomers of both Mstar Metro and Nuvont Communica-tions, which provide residential services on iProvo. The transition of customers will coincide with Broadweave’s acquisition of the iProvo network. Unlike Veracity, Mstar and Nuvont are what Broadweave CEO Steve Chris-tensen calls “marketing companies” – that is, companies without any significant assets other than their customer bases – which is why Broadweave acquired the custom-ers rather than the companies themselves.

Nuvont CEO Brandon Grover, who will become a customer and partner of Broadweave as he launches a new company selling VoIP services, agrees with Broad-weave’s assessment that the separation between net-work operation and service provision – mandated for publicly owned networks by Utah law – did not work well for iProvo, saying: “Under the old wholesale model, it was difficult and inefficient to adequately service cus-tomers. We saw this firsthand as a service provider. In the long run, Broadweave’s model of being both the

network owner and the service provider will result in the best experience for the customers.”

Finally, Broadweave took steps to address persistent reports of telephone service failure, which Christensen saw as the largest obstacle to the network’s success – and especially as the largest obstacle to selling busi-ness services. Configuration changes alleviated some problems, and Broadweave was prepared to use its own telephony switches to guarantee service. But during its due diligence it also found that the customer premises equipment did not support voice service adequately, and it began publicly putting pressure on the manufac-turer to fix the equipment.

“If the manufacturer fixes the problems with the cur-rent version of home portals by implementing a fix to the firmware, then Broadweave will be happy to keep those devices on the network and will continue to purchase equipment from the manufacturer,” Christensen an-nounced, saying that if the manufacturer failed to solve the problem within 90 days of the closing, Broadweave would replace the devices. While Broadweave did not identify the manufacturer, most of the electronic equip-ment on iProvo is supplied by World Wide Packets.

Despite CPE problems, Christensen calls the network basically sound; he told Broadband Properties he is “proud to be taking over a world-class network.” Broad-weave intends to stay with the Active Ethernet technol-ogy (which it uses in its networks elsewhere in Utah) but to make upgrades that Provo City did not have the finan-cial resources to make. Christensen says, “There are some interesting product investments we can’t announce yet, that will take the network to the next level.”

Broadweave also committed to Provo to keep prices equal to or better than those of its competitors. Chris-tensen says, “Our focus will be on taking customers from single to double play, or double to triple play, and on adding features and services. We’ll focus on businesses, and try for a higher take rate from both businesses and residential users.”

We asked Christensen whether the sale of iProvo to a private company should encourage or discourage other cities that are considering building municipal systems. His reply: “If you build the right system, there will always be a market for it. Municipal bond financing can do things that sometimes the private sector cannot do. In some form, there is a really good partnership op-portunity between municipalities and service provid-ers …. This also shows that for a lot of municipalities today struggling with wholesale model, in some phase or another of financial stress, there can be light at end of tunnel. There are service providers out there that un-derstand what it takes to make these systems successful, and they will step up to the plate to do this if the cities are interested.”

BroAdWeAve purChAse oF Iprovo ConFIrMed

June 2008 | www.broadbandproperties.com | BROADBAND PROPERTIES | 19

it says the lawsuit’s timing and the grounds alleged “lead to the impression that the suit was intended to interfere with the award of the bonds and create additional costs for the city proj-ect.” The city plans to move forward with the project, and its bond managers are continuing to prepare for the bond sale. FiberNet Monticello’s presentation at the Broadband Summit is included in the Summit coverage in this issue.

The city of Powell, Wyoming, began construction of its municipal FTTH network last month, celebrating the occasion with a community open house. The network will use GPON technology from Calix. The project involves a partnership be-tween the city, which will own the network, and two private organizations: service provider TCT and integrator US Metro-Nets (USM). USM developed the business model that allowed Powell to obtain private financing and is now acting as project manager during construction. TCT is a nearby independent telephone company that has deployed a GPON network in its own territory, over which it provides triple play services; it will manage all services once PowelLink goes live.

The city of Wilson, North Carolina, deployed ETI Soft-ware Solutions’ Triad énconcert billing system to manage the Greenlight FTTH network it is launching. Énconcert sup-ports all aspects of billing and activating broadband services. It manages and controls customer premises devices, provisions services, generates statements, and manages receivables, collec-

tions and payments. Mike Basham, the city’s IT director, says, “People are used to government reacting to a problem. We are dealing with an issue to ensure our city remains at the forefront of technology.”

As one of the few community broadband providers that does not already own an electric utility, the city of Salisbury, North Carolina, faces hurdles that most other municipalities do not. It overcame one of them last month by negotiating a contract with Duke Energy that allows it to string fiber optic cables on Duke’s utility poles.

WCNH.NET, a consortium of eight rural towns in west-central New Hampshire, has been working since 2005 to de-velop a publicly owned fiber-to-the-home network. The con-

VenDor SpotligHtCalix www.calix.comClearfield www.clearfieldconnection.com ETI Software Solutions www.enhancedtel.comOccam Networks www.occamnetworks.comStarz Entertainment www.starz.com Sonus Networks www.sonusnet.comTaqua www.taqua.comUS Metronets www.usmetronets.comUTStarcom www.utstar.com

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sortium’s plan is to provide 100 Mbps connections over fiber to residents and businesses in the eight towns, hire a pri-vate company to manage the network and allow open access to service provid-ers. Funding for the network has not yet been secured, but local media report that consortium leaders plan to travel this summer to visit other municipal fiber optic deployments.

Verizon Wins nYC (true), Abandons FioS (Untrue)

verizon’s FiOS rollout continued with video franchise approvals by communities in Massachu-

setts, Oregon and New York. The big-gest video market of all, New York City,

appeared ready to welcome Verizon as the city’s Franchise and Concession Re-view Committee voted unanimously to approve Verizon’s proposal to provide FiOS TV citywide for 12 years. The proposal sparked some local criticism on the grounds that it held Verizon insuffi-ciently accountable for meeting buildout schedules and for providing customer service. However, it is supported by the city’s elected officials and is expected to receive final approvals soon. This will make New York City the first major city in the US with citywide access to a fiber-to-the-home network. The agree-ment calls for the network to be finished by 2014.

Verizon also announced an agree-ment with Starz Entertainment that will bring Starz Play to Verizon’s broadband subscribers. Starz Play is a subscription-based, over-the-top video service that includes both live programming and downloadable movies. Verizon also de-livers 16 Starz and related channels on

its FiOS TV service, but apparently it sees over-the-top video as complemen-tary to, rather than competitive with, FiOS TV. (See “Why We Need More Fiber” in this issue.)

The most surprising Verizon (non-)news this month was the French national newspaper Le Monde’s report that “tele-com operator Verizon just announced it was giving up its deployment of fiber to the home. Too long, too expensive. The cost of recruiting a subscriber was valued at $5,000 dollars and worth only $3,400.” (Our translation.) Needless to say, no one told the FiOS deployment crews about this. Possibly the report was prompted by a recent statement by Vin-cent O’Byrne, director of access tech-nologies at Verizon, that the company was in no rush to replace the RF-overlay video technology it uses for FiOS TV linear programming with IPTV.

The Arizona Investment Coun-cil, a private organization representing utility investors, issued a report on up-

June 2008 | www.broadbandproperties.com | BROADBAND PROPERTIES | 21

norTh AMerICAn TeLCosBroadweave Networks www.broadweave.comBTC (Western Iowa Networks) www.win-4-u.com CC Communications www.cccomm.netCityLink Telecommunications www.citylinkfiber.comLiberty

Communications www.libertycommunications.comMatanuska Telephone Association www.mta-telco.comTCT (as service provider) www.tctwest.netVerizon Communications www.verizon.com

France

Bahamas

United Kingdom

United ArabEmirates

India

Alaska

states with fresh deployment activity.

International deployment activity.

DeploYer SpotligHt

oTher norTh AMerICAn depLoyersCity of Powell, Wyoming www.cityofpowell.comCity of Wilson, North Carolina

(Greenlight) www.greenlightnc.comCity of Salisbury, North Carolina www.salisburync.govFiberNet Monticello www.monticellofiber.comWCNH.NET www.wcnh.net

InTernATIonAL depLoyersBahamas Telecommunications

Company www.btcbahamas.comdu www.du.aeH2O Networks www.h2onetworksdarkfibre.comNeuf Cegetel www.groupeneufcegetel.fr/html/enUnited Telecoms www.utlindia.com

grading the state’s infrastructure that recommends building a FTTH network to serve all of Arizona. The report says: “Not having a state-of-the-art telecom-munications infrastructure is [a] detrac-tor for businesses and residents when de-ciding if they should locate in Arizona. Put another way, a ‘gold standard’ tele-communications infrastructure (which most commentators observe to be fiber to the home) would attract new busi-nesses and more highly skilled jobs to the state.”

The report recommends that Arizona state government consider some or all of the following steps:

• Anchor tenancy – state and local gov-ernments purchasing all their band-width needs from a single company, with the company agreeing in turn to provide infrastructure to areas that otherwise would not receive service.

• Allowing Arizona municipalities to build, operate and maintain their own telecommunications infrastructure.

• Creating a telecommunications in-frastructure bank that would give municipalities and private companies access to low-cost loans.

• Establishing a broadband universal service fund that telecommunica-tions providers could use when pro-

viding broadband services to high-cost communities.

• Streamlining or limiting right-of-way costs to reduce the burden on telecommunications providers.

• Altering building codes to require new or remodeled buildings to be wired for fiber to the home.

• Realigning tax incentives to level the playing field for telecommunica-tions.

• Offering grants to the private sector to serve areas that are not commer-cially viable without support.

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international Deployments: United Kingdom Awash in Fiber

While the UK’s incumbent pro-vider, BT, has taken a “go-slow” attitude toward fiber to

the home, a new competitor has stepped in to fill the breach: H2O Networks has said it will deploy fiber throughout the UK’s 360,000 miles of sewers. H2O just announced that in the next six months it will begin work on the first deployment in Bournemouth, southern England, where it will bring fiber connectivity to all of the homes and businesses in the town. H2O will be funding and provid-ing the Bournemouth network at a cost of around £30 million ($59 million). Most of the fiber will be put into the sewers using H2O Networks’ patented FS (Fibre Optical Cable Underground Sewer) System.

Councillor Nick King, the Bournemouth Council’s Cabinet Mem-ber for Communications, says, “This decision is a giant leap forward and gives us a real competitive advantage. Bournemouth really needs to em-brace the many advantages that being a fiber city will bring …. The Council has already installed H2O Networks’ high-speed fiber to its offices and the Bournemouth International Centre and Pavilion Theatre, so we are aware of the difference this type of connectivity can make.”

H2O Networks will be announc-ing more deployments over the coming months, and plans to have a nation-wide network deployed over the next few years, with speeds in excess of 100 Mbps. The company calls its method, which requires no digging and little road disruption, more environmentally friendly than traditional methods of fi-ber deployment. It also says its method is at least 80 per cent faster than tradi-tional deployment methods.

Where deploying in the sewers is not feasible, H2O Networks will use its pat-

ented BMD (Blown Mini Duct) system. With this system, a 20-mm-wide slot is channelled into the road in order to lay the cable. The company says this is not considered a civil dig and will cause minimal disruption to the local area.

In France, competitive FTTH pro-vider Neuf Cegetel renewed its partner-ship with the FNAIM Paris Ile-de-France, a group of property managers and man-aging agents. One of the biggest hurdles to fiber-to-the-home deployment in Paris is building-by-building negotiations with building managers (Paris residences are almost all MDUs). The partnership with FNAIM is part of Neuf Cegetel’s broader program for real estate professionals, and enables Neuf Cegetel to push ahead with its FTTH deployment.

The partnership agreement addresses building managers’ concerns and sets out Neuf Cegetel’s commitments from initial go-ahead through to network operation. For example, it explains how Neuf Cegetel will inform the building manager and obtain formal approval be-fore starting any work on the building, and it guarantees that the in-building network will be usable by other vendors. Neuf Cegetel also provides a one-stop hotline for managing agents, property managers and lessors.

Bahamas Telecommunications Company, the telecommunications ser-vice provider for the Commonwealth of the Bahamas, is replacing its legacy ac-cess infrastructure with the Calix C7 multiservice access platform. This paves the way for higher-speed, more widely available broadband and advanced new information, communication, and en-tertainment services to be deployed throughout the islands. The Calix solu-tion will be provided through a resale and integration agreement with Sonus

Networks, and is part of a larger effort to replace the entire circuit-switched voice network with Sonus’ VoIP network, which will provide a foundation for inte-grating wired and wireless networks. Ba-hamas Telecommunications is focusing initially on pushing fiber deeper into the access network, making multi-megabit DSL services universally available, and enabling H.248 VoIP on all subscriber lines, and will then begin selective de-ployment of GPON-based FTTP as well as new services such as IPTV.

Emirates Integrated Telecommuni-cations Company, which does business as du, became the first FTTH provider in the Middle East in 2003. Because it has been building out fiber to keep pace with Dubai’s rapid development, du now owns one of the largest FTTH networks in the world, with 300,000 homes passed and 50,000 customers. All residential units within du’s footprint are currently served via FTTH.

Recently the company announced that it was expanding its network to cover new developments such as Burj Dubai, Dubai Palm Islands, the World and other Dubai waterfront projects.

In India, United Telecoms Ltd. awarded a contract to UTStarcom to de-liver IPTV, bandwidth on demand and VoIP services over a GePON network in the state of Goa.

This will be the first FTTP network designed to deliver e-governance and triple play solutions in India, and will serve more than 100,000 subscribers. It represents an expansion of UTStarcom’s recently deployed fiber network with United Telecoms. Additional applica-tions and services to be delivered include on-demand entertainment, interactive gaming, telemedicine, distance learning and e-commerce. BBp

Middle Eastern carrier du provides fiber to the home throughout its service area – and Dubai’s

rapid development guarantees that the company continues to expand its fiber footprint.