The New Frontier: Broadband Solutions for 'TheLast Mile'

Posted: 10/1999

The New Frontier: Broadband Solutions for 'The Last Mile'
By H. Russell Frisby Jr.

The Competitive Telecommunications Association (CompTel) will hold its Fall Business Conference in Phoenix Oct. 3-6. This event will mark the first time the association will feature exhibitors at its fall conference. Many of these exhibitors are in the vanguard of solving the problem of extending broadband networks through the "last mile."

At the beginning of this century, frontiers everywhere were shrinking, and thanks to planes, trains, automobiles--and a dazzling new invention called the telephone--commerce and economic opportunities expanded. All this eventually generated a ferocious appetite among consumers and businesses alike for information and for faster, more innovative and more affordable ways to access and disseminate it.

For 21st century customers eager to tap the potential of the Internet, the new frontier is clearly cyberspace. In race-to-wire America, with high-speed, digital broadband networks, the so-called last mile of this particular competitive event is, by far, the toughest stretch for service providers.

Many carriers that want to provide broadband local facilities have limited access to the market, either through resale, interconnection and/or leasing network elements from the incumbent local exchange carrier (ILEC). This is changing as more carriers are building their own broadband networks at the local-loop level.

Nevertheless, some ILECs, while insisting they are committed to last-mile customers--including residential and rural subscribers--are bailing out of the race. Denver-based US WEST Inc., for example, has sold nearly 600 of its rural phone exchanges in the past five years, affecting approximately 1 million residential customers. At the same time, US WEST and other Bell ILECs are urging Congress to gut key provisions of the Telecommunications Act of 1996 that require the Bells to open their networks to local competition before they can enter the long distance markets in their operating territories.

Many CompTel members have learned the hard way that all the gee-whiz technology in the world cannot compensate for the continuing refusal of most ILECs to fulfill the tenets of the Telecom Act and open their networks to meaningful competition.

Despite regulatory challenges, however, competitive service providers--including CompTel's member companies--are embracing digital subscriber line (DSL), fiber and wireless technologies to meet their customers' increasing demands for full-service broadband services.

DSL

DSL technology, for example, enables telecommunications companies to provide broadband, high-speed services over ordinary copper telephone lines. As the demand for Internet access and other high-speed applications continues to skyrocket, DSL has wowed many on Wall Street, quickly eclipsing integrated services digital network (ISDN) models as the darling of competitive LECs (CLECs) and long distance carriers, as well as the ILECs. Some analysts predict that the DSL market will be worth more than $4.5 billion by 2001.

In June, KMC Telecom Inc., Bedminster, N.J., one of the nation's fastest-growing facilities-based CLECs, announced an aggressive DSL rollout, with plans to introduce significant additional broadband applications by year-end. KMC's DSL strategy represents one of the first in smaller U.S. cities. The company plans to offer DSL-based services in all the markets it serves--23 mainly tier 3 and tier 4 cities throughout the Midwest and South, with plans to enter an additional 15 markets in 1999.

Customers in cities as diverse as Baton Rouge, La.; Fort Wayne, Ind.; Pensacola, Fla.; and Winston-Salem, N.C., are poised to receive KMC's DSL services for high-speed data access, which will support high-bandwidth applications and integrated services for larger customers such as Internet service providers (ISPs), corporations, universities and government agencies.

As a cost-effective alternative to cable modems, DSL also lets data service providers go head-to-head against cable TV companies in the last-mile market for local broadband services.

Fiber and Wireless

Fiber and wireless technologies also remain strong contenders in the race to serve the last mile. Greenwood Village, Colo.-based Time Warner Telecom Inc., for example, offers small, medium-sized and large businesses last-mile broadband connections for data, high-speed Internet access, local voice and long distance services via its fiber network that serves 21 U.S. cities from Florida to California.

The company plans to add five more cities to its roster by the end of 2000. Sister company Time Warner Cable serves another 40 cities, which has proven to be a boon to Time Warner Telecom, since it has been able to use those rights of way to provide broadband services to businesses in 1,975 buildings, according to Larissa Herda, Time Warner Telecom's president and CEO.

Some competitive service providers are using both fiber and wireless to extend their broadband reach over the last mile. Tulsa, Okla.-based Williams Communications, for example, is extending its nationwide, wholesale fiber optic network into the local telecommunications market using both fiber and wireless technologies.

Williams' fiber network has direct connectivity with extensive capacity into 18 metropolitan statistical areas (MSAs) with plans to extend into the nation's top 30 markets by 2000, in part through a strategic relationship with Metromedia Fiber Network (MFN), White Plains, N.Y. Another last-mile broadband connectivity option is available through Williams Communications' new wireless local access service, which offers broadband without deployment of local fiber access through point-to-point, line-of-sight wireless transmission.

High-density, high-capacity, fiber optic networks coupled with wireless local access services offer significant benefits to last-mile customers. Wholesale customers, for example, can enjoy more affordable local access loops. Another benefit is that fiber, like DSL, promises simpler provisioning and one-stop shopping for local as well as long distance services.

Challenges Ahead

Network administration, customer support and other operational issues also enter into the last-mile equation. "Back office is always a concern for CLECs," says Time Warner Telecom's Herda. In addition, despite the technology gains service providers have realized over the past few years, there remain some significant regulatory obstacles to the deployment of broadband facilities in the last mile.

Gaining access to buildings is difficult regardless of the technology; whether it is wireless access or wireline access, many states do not have a regulatory regime that facilitates access and opens up this bottleneck. The Federal Communications Commission (FCC) accepted public comments on this issue on Aug. 27, and Congress already has tackled the issue in a May 13 hearing held by the House Subcommittee on Telecommunications, Trade & Consumer Protection.

At that hearing, CompTel Board Member Scott Burnside, senior vice president of regulatory and government affairs of Princeton, N.J.-based RCN Corp., described the obstacles RCN faces accessing inside wiring in multiple dwelling units (MDUs). The lack of such access is a serious impediment to the full rollout of competitive cable services and the implementation of both the spirit and intent of the Telecom Act, he stated.

Another regulatory roadblock to crossing the last-mile finish line for many service providers involves access to public rights of way. In addition, many municipalities impose franchise requirements that impede the deployment of broadband facilities in the last mile.

For most competitive local service providers, even the most sophisticated technologies have difficulty overcoming federal and state regulatory obstacles--not to mention the hurdles erected by incumbent monopolies that are loathe to relinquish market share. To go the distance of covering the last mile, ILECs must open their networks and make their facilities more accessible to CompTel's member companies and other competitive providers. These entrants' persistence and creativity--which are translating into growing numbers of customers--already are beginning to bear fruit in the marketplace and on Wall Street, proving that their reach clearly does not exceed their grasp.

H. Russell Frisby Jr. is president of the Competitive Telecommunications Association (CompTel), Washington, the principal industry association for competitive telecommunications carriers and their suppliers. For more information, visit CompTel at www.comptel.org or call +1 202 296 6650.