FierceTelecom's 2011 Predictions: Service providers squeeze more out of copper

Just when you think copper has seen its final days, something else comes along that promises to expand the capabilities of the 100-plus year old wired medium.

Throughout 2010, there were a number of innovations that were on display by vendors and service providers set on expanding rate and reach for both residential and business services.

On the business side, one trend that's likely to continue throughout 2011 will be a continual drive by CLECs and even some incumbent carriers to provide Ethernet over Copper (EoC) and Ethernet over T1. While fiber is the ultimate end-game medium to deliver Ethernet, the reality is that fiber still only reaches a little over 20 percent of U.S.-based buildings.

Following their success in 2010, it won't be much of a stretch to see CLECs, including CBeyond (Nasdaq: CBEY), MegaPath--which enhanced its EoC reach by acquiring Covad--Paetec (Nasdaq: PAET), which expanded its EoC reach with its Cavalier Telephone/Intellifiber acquisition, TelePacific and XO (OTC BB: XOHO.OB), continue to expand the rate and reach of their respective copper-based Ethernet offerings.

XO, for one, may be a big advocate of fiber-based Ethernet, but as of September 2010 the CLEC had expanded its Ethernet over Copper 30 percent with increased coverage in 39 existing markets. SMBs that have been largely ignored by AT&T and Verizon will find utility in XO's ability to provide EoC services that can more inexpensively scale from as low as 3 Mbps to as high as 20 Mbps.

Albeit on a smaller scale, regional CLEC TelePacific has also set an aggressive timeline to not only expand its fiber-based Ethernet reach with connection agreements with ILECs and MSOs, but it plans to make its EoC service available in 120 EoC Local Service Offices (LSOs) by the end of the first quarter and 200 LSOs by the end of 2011.

But the copper drive isn't just about business services alone. Residential customers will also continue to reap the rewards of copper-based broadband in 2011 as well.
Despite the popularity that was created by Verizon's FiOS and even municipality-based Fiber to the Premises (FTTP) deployments, it's clear that the majority of incumbent service providers still want to squeeze more out of their copper lines.

And there's plenty of innovations, including both VDSL2 with pair bonding to emerging techniques (Dynamic Spectrum Management (DSM) and Phantom Mode) that will telcos not ready to do a total FTTP dive reach that end game.

While 2010 was a time of experimentation with Alcatel-Lucent and Huawei demonstrating 300 and 700 Mbps over existing copper lines, respectively, 2011 will be a time where these vendors will have to prove their wares are more than glorified lab experiments with actual live customer trials and deployments.

The likely beneficiaries of these technologies will be Tier 1 carriers (AT&T and CenturyLink/Qwest) and Tier 2s (Frontier and Windstream).

Regardless of the promise of these technologies may bring to expand the life of existing copper, Dennis Huber, Executive Vice President, Network and IT, CenturyLink (NYSE: CTL), said that they will have to make sure their existing plant is "groomed" to handle latency sensitive services like video.

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