Cable coaxial systems and more recent HFC (Hybrid Fiber-Coax) networks have been expanding across the North American continent for nearly seventy years. MSO coax access links pass more than 85% of the single family and multi-dwelling properties in the US. Cable systems have evolved over the decades from basic video carriage to multi-services transport including voice, high speed internet, and data services for both residential and commercial customers.
In 1982 the landmark United States v AT&T anti-trust settlement broke up the Bell System, which led to the creation of seven independent Regional Bell Operating Companies (RBOCs) just two years later. The Regional Bells no longer had the monopoly protection that the telephone network enjoyed in the past.
Competition accelerated in the mid 1990’s with the growth of the internet. Cable systems launched DOCSIS® which allowed both digital voice and data services over the MSO coax networks. The twisted pair copper wires of the phone companies reached almost every home in the US, but this basic network of copper lines had been in existence for a hundred years and had limited high speed data capacity. In order to survive, the Regional Bells started to merge and consolidate their coverage areas. They also began the process of migrating their networks from “Plain Old Telephone Service” (POTS) over twisted pair copper lines to fiber optics, in order to compete with the cable and satellite competitors that were rapidly growing by offering expanding video on demand content and faster data.
Verizon initiated FiOS (Fiber Optic Service) in 2005 and built out FTTH networks covering 18 million households, primarily in the northeastern portion of the US. AT&T developed U-verse, a hybrid network consisting of a fiber to the curb transport layer converting to a DSL over twisted pair access link to the home. The cable operator alternative to FTTH PON was RFoG (RF over Glass). RFoG involved very little new technology. The analog modulated laser that had been used to transport the RF channel load to the HFC node was now optically split to feed 32 mini nodes that were located at the subscriber homes.
RFoG provided no additional bandwidth or capacity compared to HFC, but it did satisfy the demands of new home developers that insisted on a future proof “fiber to the premise” solution instead of coax. RFoG struggled to gain traction then (as now) due to a number of weaknesses with this technology – limited bandwidth (BW), limited capacity, higher construction costs associated with fiber, and the nagging concerns about optical beat interference (OBI) that was always hard to detect, initially, and had no known cure. The only major benefit of RFoG was that long fiber drops provided a much lower cost solution than HFC in rural serving areas with low homes per mile. The paucity of homes in these locations also provided lower upstream traffic congestion on the network, so the statistical chances of generating OBI was significantly reduced. Many smaller market MSOs serving these communities in the mid-west and southern areas of the country have never had a serious problem with OBI, and swear by RFoG.
The housing boom that generated the increasing interest in fiber to the home ended suddenly as a result of the 2008 Great Recession. New single-family home construction came to a standstill and financial tightening halted all but “business as usual” network maintenance projects.
Post-recession, as the financial and home construction markets recovered, a shift to multi-dwelling unit (MDU) new build projects (instead of single home communities) was clearly evident. But the most significant change in broadband access was the announcement in 2010 that Google Fiber would soon bring Gigabit fiber connectivity to a number of communities across America, starting with Kansas City, KS. Google’s entry into the broadband delivery arena was the catalyst for a number of competitive changes. Google Fiber threatened both telcos and cable operators. Gigabit service was, at that time, out of reach for telco DSL or MSO DOCSIS networks. Cable franchise agreements were now being reexamined as cities lined up to be the next potential Google “Fiberhood.” Emboldened by Google’s negotiating power to extract concessions from municipalities -- such as access to utility poles, and expedited construction permitting -- the lowered barriers to entry encouraged a new wave of fiber overbuilders to enter the market. These new competitors began to target the incumbent operator’s MDU footprint, using the Google template.
“Gigafy America” became the rallying cry from these new competitors.
Cable MSOs now have to plan a fiber strategy -- or watch these competitors take away new greenfield opportunities, as well as existing MDU and bulk contract, gated community subscribers.