Beal (Image source: CenturyLink)
with Matt Beal, Chief Technology Officer, CenturyLink
Matt Beal, CTO of CenturyLink (NYSE: CTL), is leading a number of key technology initiatives, including the telco's most recent move to begin a 1 Gbps fiber to the premises service trial in Omaha. But this is not your typical FTTP pilot. Unlike other providers, which are building totally new networks, CenturyLink is updating an outdated HFC system that was built during the US West days. Sean Buckley, Senior Editor of FierceTelecom, speaks with Beal about what's driving its 1 Gbps pilot deployment and what it means for the telco.
FierceTelecom: There's been a lot of talk about Google's (Nasdaq: GOOG) buildout pushing providers to up their own high-speed offerings, but what motivated CenturyLink to begin this pilot 1 Gbps trial?
Matt Beal: We're highlighting it as a pilot because it very much is. We obviously run a small smattering of GPON properties already, but this is the first time we are doing a large-scale Brownfield conversion and all of the customer migrations. That's probably one key difference is that we're looking at it not just from a new capture like everyone else, but also from a Brownfield conversion perspective.
I think another thing that's unique, and is why we're able to go after something of this scale, is our operational pilot if you will: that is, we are converting some very old US West pre-DOCSIS hybrid fiber coax network infrastructure. That's what has allowed us to make the capital case to put this forward as a pilot.
FierceTelecom: This is an old cable system that CenturyLink acquired when it purchased Qwest?
Beal: This was a cable system originally built by US West. It's not even your traditional MSO-type infrastructure--it's something different. That's the other thing that's exciting about this is we're able to move them to an architecture that's much more consistent with our systems and products. If I recall correctly, even the video is analog so we're looking forward to giving our customers a shot at the modern world.
FierceTelecom: Will you put the optical network terminal (ONT) on the inside or outside of the home?
Beal: I would expect we're going to do a few of the homes with an outdoor ONT, but our intent is to shift to an indoor ONT. That's to be validated, but that's our intent. We think that creates some improvements in customer experience and uniqueness in terms of future proofing, as well as cost savings. Obviously, what happens on paper is potentially different than what happens in real life.
FierceTelecom: Will the pilot be focused on single-family homes, multi-dwelling units (MDUs), or will it be a mix?
Beal: It's a fairly good mix. The way that we're looking at it is we'll be pretty selective. This particular footprint we'll go after the single-family homes and in the other footprint we'll stick with fiber to the node (FTTN) as it currently stands. From a business customer base it's really what the business needs. We're looking at a lot more fiber enablement to business just as a general practice.
FierceTelecom: Is this the only Brownfield conversion CenturyLink is planning? What advantages do you see in converting an older hybrid fiber-coax network to FTTP?
It's a really unique situation and the only one of its kind in our footprint. It's a contiguous infrastructure of just under 50,000 homes passed, so overall that and what we're seeing as the nature of our business--customer demand as well as the broader broadband ecosystem--is just coming at a time when being able to be out there and be on the leading edge of it is pretty important to us.
It also gives us the ability to scale and validate a number of the operational assumptions, both introspective (i.e., what does it take to run this and scale this type of infrastructure?), because you always like to know that. The second thing, and probably the most important, is it gives us the opportunity to really see the nature of how customers will use the broadband. What they will do with it as well as the attractiveness: Will they actively make the choice to opt for this type of solution as opposed to what we typically see in terms of penetration numbers? And how much can we really draw off the Cox customer base? Those are really the things that cause us to be really excited about what we're doing here.
These are also customers that stuck with US West and us for a very long time in the face of a really outdated infrastructure, so being able to turn around and give customers that have been that loyal and constant with us an opportunity to the future is something we're really excited about.
FierceTelecom: What are the unique challenges and processes of updating a Brownfield network?
Beal: I guess the unique thing that helps keep the costs down is the fact that fiber was already deployed within every eight homes in the entire footprint, so that's very powerful as you can imagine. What's painful is the infrastructure that currently exists at the end of that fiber is carrying live traffic. You have a set of devices you have to remove from customers or former customers and replace with more traditional GPON splitters and so forth.
For the customers the transition is a little bit impactful, but it will be much cleaner down the road. The complexity is the equipment trade-out and re-cabling the customers with fiber and within the home, getting to a better distribution within the home. Overall, just because of the proximity of the fiber, we're not spending tons of money building fiber distribution. It's more of that very last few feet of fiber we have to pull in and the coordination with the customers. Then, of course, there's the hard task of going in and convincing the customers that you're the best deal in town.
FierceTelecom: 1 Gbps is the premier tier for this service. Will you offer other speed tiers?
Beal: There are some lower tiers because we don't see everyone having the appetite or the budget to go after 1 Gbps. Actually, some of the piloting we'll do over time will be which set of tiers are going to provide the best mix for the customer base. I would expect us to do some experimentation over time in terms of what really resonates with the customer, what's the customer experience, and really where are the sweet spots in terms of customer resonance versus capacity and speed.
FierceTelecom: If this trial is successful, is this something you could replicate in other markets?
Beal: Obviously, we're taking it carefully. What we're trying to find is that balance point where we care for our subscribers and where we care for our shareholders. We're definitely doing this with an eye to: Do we see the penetration, do we see the resonance with the customers, and do we see the operational opportunity? We expect all of those to come back those to come back affirmative and positive.
One thing I will say is we have no more plant that looks like this. We have other legacy plants that will require different conversion techniques so we don't expect to replicate the conversion model. We're kind of excited that we get to eradicate this antiquity. It's also a little bit about across our customer base and geographic diversity and systems diversity to figure out the sweet spot, but the outcomes will inform mapping.