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BT’s 21st Century Network isn’t living up to 21st century expectations, possibly because it still relies on a copper connection into the home. The Financial Times notes that two wired ISPs are dissing BT’s planned fiber to the cabinet network as being inadequate and inflexible, showing how important a fiber to the premise strategy will be for future-proofing a network.
The heads of British Sky Broadcasting and Carphone Warehouse, two smaller British ISPs and potential wholesale customers of BT’s fiber network through BT’s Openreach subsidiary, were somewhat vague in their complaints about their current trials on the BT fiber network. However, the themes seemed to be that the network wasn’t flexible enough to offer differentiated products and services on, nor was it future-proofed. From the Financial Times:
Charles Dunstone, Carphone’s chief executive, said the Openreach product was “not acceptable” in its proposed form.
“The country needs something that is much more flexible because the technology is moving incredibly quickly,” he added.
My hunch is the remnants of copper linking the fiber network to the home are the problem, as that limits the overall speed and products one can offer. Consumers increasingly expect fatter pipes into their homes for services such as 3-D television, telepresence and to-be-discovered services, but copper is inherently a thinner pipe than fiber, which means that the full benefits of the fiber stop at the cabinet. That spells bad news for BT, whose $17 billion investment in its 21st Century Network could be the equivalent of buying a Hummer dealership just as gas prices hit the roof. If it can’t convince wholesale customers to sign up, it can’t recoup its fiber-to-the-node investment.
In the U.S., it’s also a worrying sign for AT&T (s T) and Qwest (s Q), which also have fiber-to-the-node strategies. Meanwhile, Verizon is continuing to push the envelope on its fiber-to-the-premise technology, testing service that could deliver 10 Gbps downlink to a node of about 30 homes. In the UK, Virgin Media is testing a 200 Mbps service into homes using DOCSIS 3.0. Up against that kind of offering BT’s 40 Mbps to 60 Mbps offering using copper isn’t too sexy.