Verizon has completed its $1.8 billion acquisition of XO Communications’ fiber business in a deal announced almost one year ago.  The company expects to achieve synergies by incorporating XO’s fiber assets as part of its current network operations, with the total operating and expense savings estimated at over $1.5 billion.  The XO takeover is expected to help boost Verizon’s enterprise and wholesale business, as well as improve backhaul for its mobile network. Integration of all XO operations and facilities is expected to commence immediately, Verizon said.

Verizon also says it will lease wireless frequencies from NextLink Wireless, a former XO affiliate, in a deal that gives the carrier an option to buy NextLink.  That might help the mega telco with its plan to offer high speed wireless broadband (4G or 5G).

In September, Verizon’s CFO Fran Shammo told the audience at a Goldman Sachs & Co. conference that Verizon’s fixed wireless 5G, with 1 Gbit/s connections to the home, will take on cable, “or any broadband connection for that matter,” and that deploying 5G will be much cheaper than deploying FiOS. (See Verizon CFO: Eat Our (Fixed) 5G Dust!)

Shammo also said that the company’s key advantage in deploying 5G is the rights to lease 28GHz bandwidth from NextLink. “That covers 40% of the US,” he said then, adding “That’s all licensed for fixed wireless use for the time being, as per the Federal Communications Commission (FCC) rules. We’re hoping that’ll become mobile at some point down the road.”

AT&T has entered “advanced discussions” with electric utilities to test its Project AirGig wireless technology in two places by the fourth quarter, the telco said in a press release.  The high-speed broadband technology relies on antennas placed on power lines to transmit wireless signals.  One of the locations will be in the US.  The others will be determined in the coming months, according to the company.

AT&T Chief Strategy Officer John Donovan told USA Today that an announcement about the power companies involved would come soon, in a matter of “days to weeks.” It will likely be in the south to avoid the variable of winter, Donovan added.

AT&T has said that Project Airgig as a new way to deliver fast Internet service with high-speed connections at a lower cost by delivering over (but not through) existing power lines.  The infrastructure associated with it is cheaper and easier to deploy than fiber, the company says. Whereas fiber internet requires digging up dirt to run wires, Airgig delivers through relatively inexpensive plastic antennas on top of power lines.

Preliminary Model of AirGig Antenna- side view,  Photo Courtesy of AT&T

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“We are looking forward to begin testing the possibilities of AT&T Labs’ invention for customers and utility companies,” said Andre Fuetsch, president of AT&T Labs and chief technology officer. “AT&T is focused on delivering a gigabit-per-second speed everywhere we can with our wired and wireless technologies. Project AirGig represents a key invention in our 5G Evolution approach. AT&T Labs is ‘writing the textbook’ for a new technology approach that has the potential to deliver benefits to utility companies and bring this multi-gigabit, low-cost internet connectivity anywhere there are power lines – big urban market, small rural town, globally.”

AT&T says it has been working on the technology for more than 10 years and has more than 200 patents associated with it. The potential that other companies would start sniffing around the patents prompted the public disclosure in September, Donovan said at the time.

“AT&T Labs engineers and scientists invented low-cost plastic antennas, a Radio Distributed Antenna System (RDAS), mmWave surface wave launchers and inductive power devices,” the press release noted.

In almost 50 years of observing tech trends and markets, the most hyped of all time is 5G.  It’s a market that doesn’t exist and won’t until 2021 at the earliest.  That didn’t stop Verizon, AT&T, Telia and numerous other wireless telcos announcing 5G trials this year!

The latest 5G partnership (whatever that means) is network equipment behemoth Nokia (a combo of Nokia-Siemens, Lucent and Alcatel) combining with Orange (formerly France Telecom) to progress 5G.  Does that mean that Nokia will be the exclusive 5G network equipment provider to Orange?  We doubt that!

As part of the agreement, the pair will focus on making the transition from 4G to 5G network connectivity a pain free job, to pave the way for such innovations as smarter cities, connected vehicles and remote healthcare. This work will also include the application of ultra-broadband leveraging new frequency bands, cloud RAN and massive MIMO, IoT, end-to-end network slicing techniques and energy efficiency.

“In line with the Orange Essentials 2020 strategy, Orange places innovation at the heart of its drive to deliver an unmatched customer experience,” said Alain Maloberti, Senior Vice President, Orange Labs Networks

“Working with Nokia, we are preparing the evolution of our networks from 4G to 5G, with multiple services on a single infrastructure to deliver a quality tailored for each service requirement. Our new services will enhance people’s lives and accelerate the digitization of vertical industries.”

“With our breadth of Radio, IP and Optics technologies, and the expertise of Bell Labs, Nokia is proud to be assisting Orange in the introduction of 5G and the application of the Future X Network paradigm,” said Marc Rouanne, chief Innovation and Operating Officer at Nokia, said:

“Through this collaboration, we will test 5G applications for different industry segments and measure the benefits of extremely short latency and very high speeds. We are also delighted to be applying our world-class R&D expertise in Paris and Lannion in this project.”

Prior to the announcement, the two already had a relationship in place, namely a research partnership between Orange Labs and Nokia Bell Labs.

THE 5 KEYS TO 5G according to Nokia:

The 5 Keys to 5G

by David Dixon and Mike He, FBR & Co. (edited by Alan J Weissberger)

Summary and Recommendation:

AT&T reported largely mixed 4Q16 results, with both top-line and adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) misses driven by fewer upgrades and continued legacy service weakness. Lower depreciation expenses helped lift adjusted EPS to $0.66. Strong international and entertainment revenues were key to offsetting ongoing weakness in consumer mobility and an anemic business solutions segment, which continues to be handicapped by weak legacy service demand. Promotional pricing of DIRECTV NOW (Internet TV package), with zero-rating [1], saw strong initial adoption, helping to offset churn from the 2G network shutdown.

With Ajit Pai recently named as chairman of the FCC, net neutrality is likely to be overturned; and zero-rating will likely be endorsed, paving the way for AT&T’s bundling strategy. Potential tax and regulatory reform should help the telcos attack cable’s historic advantage through a fiber-lead investment uptick amid consolidation. So, while tax reform is accretive to cash flow, we believe much of this benefit will be absorbed from a higher capex trajectory.

Note 1.  Zero-rating (also called toll-free data or sponsored data) is the practice of mobile network operators (MNO), mobile virtual network operators (MVNO), and Internet service providers (ISP) not to charge end customers for data used by specific applications or internet services through their network, in limited or metered mobile data plans.

Key Points:

■ 4Q16 results recap. Consolidated revenues declined 0.7% YOY, to $41.8B, in line with our estimate but below consensus’ estimate of $42.0B. By segment: Business solutions delivered revenues of $18.0B, entertainment and Internet services had revenues of $13.2B, consumer mobility had revenues of $8.4B, and international had revenues of $1.9B. Adjusted EBITDA was $12.2B, versus consensus’ estimate of $12.8B and our estimate of $13.1B. EBITDA margins expanded by a modest 6 bps YOY, to 29.1%. Consumer mobility postpaid net adds were 270,000, prepaid net adds were 406,000, and postpaid churn was 1.25%.

■ In-line FY17 guidance. Management provided FY17 revenue guidance of low single-digit growth, in line with consensus’ estimate of +1.6% YOY, with adjusted EPS growth in the mid-single-digit range, adjusted operating margin expansion, capex of $22B, and free cash flow of $18B.

■ Stay tuned for a fiber-induced investment uptick. Management would not take the bait on plans to extend fiber investment, but we think this is inevitable. Beyond the in-region Boston fiber deployment, our checks indicate that Verizon has issued fiber construction RFPs for the two-year buildout of an additional 20 to 30 cities. Not only would this likely invoke a competitive response from cable companies, it may also drive an acceleration and expansion in T’s fiber plans to deploy to 12.5 million homes (aside from any tax reform and the extension of bonus depreciation, which could both accelerate deployment).

Can AT&T drive earnings growth?

With the LTE network buildout complete and AT&T diversifying into Mexico to alleviate churn pressures, further changes to upgrade eligibility are likely. 6 to 12 Months Can AT&T drive earnings growth? Smartphone activations remain significant. Strategic initiatives with Samsung and Google, coupled with support of the Windows Phone ecosystem by MSFT, NOK, and other OEMs, are key to lower wireless subsidy pressure but it is early days. We think AT&T will continue to consider pricing action to augment growth once the LTE network build is complete. But competitive intensity is likely to increase in FY16, so this will prove difficult absent consolidation or until T-Mobile US becomes spectrum challenged, which we think is still one year away and a function of T-Mobile’s commitment to continue network investment.

How will AT&T fare in the changing wireless landscape in 2017 and beyond?

Our strategic concerns for AT&T include:

(1) the Apple eSIM impact, should Apple be successful in striking wholesale agreements;

(2) the Google MVNO impact, which could strip the company of the last bastion of connectivity revenue; and

(3) a WiFi first network from Comcast, coupled with a wholesale agreement with a carrier, which would enable a competitor and increase pricing pressure.

Does AT&T have a sustainable spectrum advantage compared with other carriers?

AT&T is behind Verizon in spectrum and out of spectrum in numerous major markets, according to our vendor checks. However, with additional density investment, it is reasonably well positioned to benefit from the combination of coverage layer (700 MHz and 850 MHz) and capacity layer (1,700 MHz and 1,900 MHz and soon-to-be-confirmed 2,300 MHz) spectrum and will focus on LTE and LTE Advanced, as well as refarming 850 MHz/1,900 MHz spectrum for additional coverage and capacity. Yet this nonstandard LTE band will cost more capex and take longer to implement. In the short run, aggressive cell splitting is expected, and metro Wi-Fi and small-cell solutions with economic backhaul solutions are becoming available, allowing for greater surgical reuse of existing spectrum. Sprint s differentiation through Clearwire spectrum is only likely to modestly affect AT&T relative to Verizon. Furthermore, with 70% 80% of wireless data traffic on Wi-Fi and only 20% of capacity utilized, this suggests a focus in this area to manage data usage growth.

Conclusions:

We expect the wireless segment to continue to be challenged by T-Mobile US and a resurgent Sprint. We are less bullish on near-term improvements in capex intensity due to cultural challenges associated with the much-needed migration to software centric networks, coupled with the need to upgrade its fiber plant aggressively to improve its competitive positioning and lay the foundation for efficiency improvement.

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End Quote:

“2016 was a transformational year for AT&T, one in which we made tremendous progress toward our goal of becoming the global leader in telecom, media and technology,” said Randall Stephenson, AT&T Chairman and CEO. “We launched DIRECTV NOW, our innovative over-the-top streaming service. Our 5G evolution plans and improved spectrum position are paving the way for the next-generation of super-fast mobile and fixed networks. And we shook-up the industry with our landscape-changing deal to acquire Time Warner, the logical next step in our strategy to bring together world-class content with best-in-class distribution which will drive innovation and more choice for consumers.”

“At the same time, we performed at a high level in 2016 with growing revenues, expanding adjusted consolidated operating margins and solid adjusted earnings growth, and we hit our $1.5 billion DIRECTV cost-synergy target. We also delivered record cash from operations, which allowed us to return substantial value to investors and invest more in the U.S. economy.”

Reference:

https://www.att.com/gen/investor-relations?pid=282

Trump Taps FCC Commissioner Ajit Pai to Be Agency Chairman

Pai has been critic of net neutrality, other Obama-era rules; wants to roll back regulations hindering investment

By JOHN D. MCKINNON, Wall Street Journal

President Donald Trump named Ajit Pai, a GOP member of the Federal Communications Commission, to be the agency’s chairman.  The designation of Mr. Pai, a sitting commissioner, allows the new administration to hit the ground running in the telecommunications area, a huge and dynamic part of the economy. Mr. Pai brings a staunchly free-market approach that generally appears to jibe with Mr. Trump and his economic advisers.

Mr. Pai, a lawyer and former Senate aide, has been a frequent critic of new telecommunications rules pushed by the Obama administration, including its far-reaching net-neutrality regulations, designed to ensure that all internet traffic is treated equally. Mr. Pai, 44, has suggested in recent weeks that he intends to apply a “weed whacker” to various FCC rules that he thinks could hinder investment in new broadband capacity.

In a statement on Monday afternoon, Mr. Pai said he was “deeply grateful” to Mr. Trump. He said he looks forward to working with other policy makers, including Congress, to bring the “benefits of the digital age to all Americans.”

Mr. Pai likely would be able to move quickly on some of his priorities, such as rolling back aspects of the net-neutrality regulations. The five-member commission will have a 2-1 GOP majority, with two seats vacant, following Democratic Chairman Tom Wheeler’s already announced resignation.

But some steps likely would require legislation by Congress, which could take a while, given other priorities such as health-care and tax overhauls. Some observers believe Congress is more likely to take up major telecommunications changes next year.

Write to John D. McKinnon at [email protected]

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Editor’s Note:

Mr. Pai has been a commissioner at the FCC since 2012, when he was appointed by then-President Obama and confirmed by the Senate.  He has long been critical of net neutrality, saying that the problem it’s trying to solve — big internet providers acting as gatekeepers to what we see and do online — doesn’t exist. He recently reiterated a prediction that the commission’s Open Internet Order, which established net neutrality, would be reversed or overturned in one way or another. He’ll now have the chance to play a role in that.

“On the day that the Title II Order was adopted, I said that ‘I don’t know whether this plan will be vacated by a court, reversed by Congress, or overturned by a future commission. But I do believe that its days are numbered,’” Pai said. “Today, I am more confident than ever that this prediction will come true.”

By Cliff Grossner, Ph.D., senior research director and advisor, cloud and data center research practice, IHS Markit

Editor’s Note:

We’ve been big skeptics of SDN in the Data Center with the exception of the mega cloud companies (e.g. Google, Microsoft, Facebook, Alibaba, Baidu, etc) that create their own specs and do all the infrastructure design themselves.  We are even more skeptical of SD-WANs where there are no definitive standards and hence no vendor inter-operability.

Highlights:

• In the data center, lab trials for software-defined networking (SDN) are still dominant over production trials and live deployments
• Service provider bare metal switching deployments have stalled, but more bare metal switches are in-use for SDN 
• Cisco and Juniper were named as the top data center SDN vendors by respondent service providers

IHS Analysis:

IHS Markit’s data center SDN survey provides insight into how cloud and telecom service provider data centers are evolving for SDN.

Data center SDN deployments going slowly

Two-thirds of the service providers participating in our 2016 survey are still conducting lab trials of data center SDN, down only slightly from three-quarters in 2015.

The number of respondents in production trials and live deployment in 2016 continued to be lower than expected by those taking part in the prior year’s study; see the chart below.

Getting to live production is taking more time than expected. This means that the most innovation-driven part of the market critical for new revenue—SDN controllers, data center orchestration and SDN applications—is still wide open. Although the leaders in the SDN service provider data center market are becoming clearer, especially for physical network equipment, we do not expect the market to solidify until live deployments ramp.

Bare metal switching stalls

Bare metal switch ports comprise, on average, 33 percent of respondents’ data center Ethernet switch ports (the same as our 2015 study). And, on average, 24 percent of bare metal switch ports are in-use for SDN, up from 12 percent in the 2015 survey.

The majority of bare metal switches are still being deployed at large cloud service providers (CSPs) because skilled programmers who are adept at dealing with bare metal switching are required to ensure success.

By 2018, bare metal Ethernet switch ports in the data center are expected to reach 41 percent among operators surveyed.

Service providers name Cisco and Juniper top SDN vendors

The leaders in the service provider data center SDN market are solidifying for physical network equipment.

In an open-ended question, we asked respondents whom they consider to be the top three data center SDN hardware/software product vendors. Cisco, the big player in enterprise networking, was identified as a top-three vendor by 72 percent of respondents, while Juniper was named by 39 percent of respondents.

Cisco continues to get traction with its SDN solutions, including with educational institutions providing online learning for students, CSPs deploying self-service portals and enterprises adopting hybrid cloud architectures. Juniper, meanwhile, is gaining footing with its contrail cloud and contrail networking solutions.

Data Center SDN Synopsis:

For its 30-page 2016 data center SDN survey, IHS Markit interviewed service providers that have deployed or plan to deploy or evaluate SDN by the end of 2018 about their plans to evolve their data centers and adopt new technologies over the next 2 years. Respondents were asked about SDN deployment drivers, barriers and timing; expected capex and opex changes with SDN; use cases; security technologies; applications; top-rated vendors; and more.

For information about purchasing this report, contact the sales department at IHS Markit in the Americas at (844) 301-7334 or[email protected]; in Europe, Middle East and Africa (EMEA) at +44 1344 328 300 or

[email protected];

or Asia-Pacific (APAC) at +604 291 3600 or [email protected]

by 451 Alliance Staff

Update by the Editor on Multi-Cloud Adoption (April 2, 2017):

In the search for higher “fault tolerance,” few companies rely on a single cloud service provider. According to a recent study by Microsoft and 451 Research, nearly a third of organizations work with four or more cloud service providers (CSPs).  By using multiple cloud services, enterprises increase their agility and automation. More and more companies are now re-strategizing and adopting a multicloud system.

“In computing, redundancy is a good thing,” says Mart van de Ven, director and consultant at Droste, a data consultancy. “If one provider is ‘nuked’, our services would not be affected because [as a company using multiple providers] we are also running our services on another provider.”

A study conducted by International Data Corporation (IDC) last year found that 86 per cent of enterprises predict they will require a multi-cloud strategy to support their business goals within the next two years.

A recent example of a company adopting a multi-cloud strategy is SNAP, the company with the popular Snapchat messaging and photo-sharing app that recently had a very successful IPO. It has agreed to buy $1 billion worth of Amazon cloud services over the next five years, according to its filing to the SEC in February 2017. This comes just days after SNAP revealed in another document related to its IPO that it has committed to buying $2 billion worth of Google Cloud services over the same five-year timeframe.

Other than serving as a back-up plan, the multi-cloud strategy means that different clouds from different providers can be used for separate tasks. It also enables companies to avoid vendor lock-in, so they can take advantage of price fluctuations and new offerings.

Lack of expertise in multiple clouds makes data management a challenge that businesses face as they grow in size and go global.

Last year, a survey of IT managers in Hong Kong, India and Singapore, by IDG, Connect and Rackspace, showed that over half of overall survey respondents found monitoring and managing multiple and/or complex workloads their biggest multi-cloud challenge.

Choosing cloud vendors with global networks and strong cloud security capability has become essential for companies when they adopt different cloud vendors. For example, many multinational companies with businesses in China are using services from Alibaba Cloud, the cloud computing arm of Alibaba Group, to help manage their global IT infrastructure from one single account, and to gain full-fledged anti-distributed denial-of-service (anti-DDoS) support, with the company’s server on premises or on cloud.

“Companies are adopting multi-cloud by necessity,” van de Ven says.

Both the number of companies using multiple clouds and the number of clouds they’re using are growing. Finding the right expertise to manage clouds is a key concern, according to the 1,002 IT professionals surveyed by RightScale, a cloud management platform.  No wonder multi-cloud management is already a fast-growing market.

According to global market research and consulting company MarketsandMarkets, the multi-cloud management market size is expected to grow from US$939.3 million last year to US$3.4 billion by 2021, at a compound annual growth rate  of 29.6 per cent.

http://www.scmp.com/native/tech/topics/tech-trends/article/2081191/spreading-risk-using-multicloud-make-data-storage

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Reliability and Cost are Most Important in Choosing a Cloud Computing Vendor

A December 2016 survey of 911 members of the 451 Global Digital Infrastructure Alliance focused on cloud computing trends, including overall spending, levels of adoption and key attributes.  These are summarized below:

FCC Forward Auction:

The Federal Communications Commission (FCC) now has a benchmark price of $10,054,676,822 for the forward portion of its wireless spectrum auction [1].

Note 1:  In the reverse auction, TV broadcasters sold spectrum which is to be sold in the forward portion of the FCC auction.  More at https://www.fcc.gov/general/learn-everything-about-reverse-auctions-now-learn-%E2%80%93-faqs

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That’s a huge drop from the previous round.  It appears a number wireless operators might be able to meet the lowered benchmark price, especially if the average price in the top markets also meets the second condition for closing the auction successfully. It is a far cry from the $86 billion broadcaster asking price when the auction began, though that was for much more spectrum. One low-power TV advocate called it a “fire sale.”

The $10,054,676,822 is how much the government will have to pay—actually it will be wireless companies if/when the auction finally closes for good—to move broadcasters off 84 MHz of spectrum so it can offer it to forward auction bidders for wireless broadband. That is down from the $43 billion broadcasters wanted for 108 MHz in stage 3.

More info at: http://www.broadcastingcable.com/news/washington/spectrum-auction-tvs-new-exit-price-plummets-10b/162451

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Trump Team Plots to Revamp FCC:

President-elect Donald Trump’s incoming administration reportedly has signed off on a plan to restructure and streamline the bureaus of the Federal Communications Commission.

“There is an opportunity now, not to be wasted, to make some fundamental changes in the FCC’s structure and the way it operates,” said Randolph May of the Free State Foundation.

To read more: http://www.broadcastingcable.com/news/washington/exclusive-trump-team-embraces-fcc-remake-blueprint/162479

Pai expected to be named FCC interim chairman:

Ajit Pai is expected to be named interim FCC chairman on Friday after Chairman Tom Wheeler’s departure, which is coincident with Donald J Trump’s presidential inauguration. White House spokesman Sean Spicer confirmed a meeting between Pai and President-elect Trump and referred to Mr. Pai as the current FCC chairman.

AT&T CEO Randall Stephenson recently met with President-elect Donald Trump at Trump Tower. AT&T’s proposed $85.4 billion acquisition of Time Warner was not a topic of discussion during the meeting, which centered primarily on job creation, wage increases and “the policies and the regulations that stand in the way of them creating further jobs,” said incoming White House press secretary Sean Spicer.

Even so, the Time Warner deal loomed large. “The No. 1 thing for AT&T right now is the merger, so it is obviously in the background and coloring every single one of these discussions,” said Gigi Sohn, a former senior adviser to Tom Wheeler, the chairman of the Federal Communications Commission. “The Trump people are smart enough to know that.”

The careful positioning of Thursday’s meeting illustrates the difficulties AT&T faces in pushing through the Time Warner deal. The acquisition, announced last October, is the first test for huge mergers in the new administration, which was voted in on a populist wave that is skeptical of such deals because of the job losses that often follow.

But beyond a barometer of antitrust, the deal is also being closely watched for Mr. Trump’s strong-arm approach to media — particularly to organizations whose coverage he dislikes. Mr. Trump repeatedly targeted CNN during the presidential campaign. This week, he criticized the network for reporting on a briefing by intelligence officials to the president and the president-elect about an unverified report linking him to a Russian campaign to influence the election.

The meeting between Mr. Trump and Mr. Stephenson, which included Bob Quinn, AT&T’s head of lobbying and regulatory affairs, appeared to do little to defuse tension. Right after the meeting, Mr. Trump took to Twitter to again attack CNN, which he said is in a “meltdown” and suffering from declining ratings.

The proposed AT&T-Time Warner deal also is set to face fewer regulatory eyes than originally thought. While the Justice Department is reviewing it, AT&T and Time Warner said last week that they did not plan to submit an application to the F.C.C. Time Warner said that after reviewing the satellite and other telecommunications licenses for its television networks, it concluded they did not merit F.C.C. scrutiny, Time Warner said in filings.

References:

Why Telco Mergers Destroy Jobs and Stifle Competition

https://www.washingtonpost.com/news/the-switch/wp/2017/01/12/why-atts-top-execs-are-visiting-trump-tower/?utm_term=.915c80acc64c

Verizon Communications says it has reached a breakthrough in lab trials of NG-PON2 technology that will allow various vendors to supply NG-PON2 components to service providers. NG-PON2 can support 40 gigabits per second of network capacity.   Verizon called the interop test a “breakthrough,” because it represents a significant step in creating a platform that will enabling the mixing and matching of vendors for various components for NG-PON2, an emerging standard  (ITU-T approved the NG-PON2 specs in 2015)  that enables up to 40 Gbps of capacity and symmetrical speeds of up 10 Gbps per customer.

In current PON deployments, operators have to use the same company for both optical line terminals (OLTs), the termination point on the service provider side, and optical network terminals (ONTs), the termination point at the end user location. Verizon is determined to change that paradigm. The company plans to publish the open OMCI (ONT Management and Control Interface) specifications that define its new OLT-to-ONT interface in the coming months.  The Verizon OMCI spec is being developed as part of the ITU–T G.988 standard.

“We would like NG-PON2 to be the first PON system which is interoperable from day one, and that’s very important for us,” Verizon’s lead engineer on the trial, Dr. Denis Khotimsky, told Light Reading.   He said it’s too early to speculate on when NG-PON2 will be ready for commercial deployments.  “We’ll proceed with deployment once we see the technology to be mature, cost efficient and when we see the customer demand for the services it provides,” he told MultiChannel News (see reference below).

Unlike when Verizon upgraded from BPON to GPON more than a decade ago, Verizon is hoping to create a more flexible ecosystem of vendors for the migration to NG-PON2.   Verizon’s current FTTP networks for FiOS use both the BPON and GPON, but the technologies used for them are not interoperable, so those systems are partitioned geographically while also requiring Verizon to use the same vendor for each end-point of those systems.

The mega telco’s first interop test for NG-PON2 included Adtran Inc, Broadcom Corp, Cortina Access, and Ericsson AB (in partnership with Calix Networks Inc).  If Verizon can ultimately depend on interoperable gear from a wider group of vendors, it may be able to exert pricing pressure more effectively and help drive the cost of NG-PON2 deployments down.  For now, Verizon isn’t willing to share if it’s working with other companies on NG-PON2 in addition to those listed in the trial.

Nokia Corp would be an obvious bet as an additional equipment partner, but so far that vendor has been left out in the cold. (See Verizon Readies Landmark NG-PON2 Trial.)

NG-PON2 is important for several reasons. It increases total capacity in the access network to 40 Gbit/s, with symmetrical 10-gig speeds possible for each individual customer. NG-PON2 is also resilient in a way that current GPON technology can’t match. Telcos will be able to use NG-PON2 to deliver services over multiple wavelengths on each fiber, making it easy to fail over from one wavelength to another as needed.

In particular, NG-PON2 is believed to be an important foundation for the future growth of 5G wireless technologies. One of the major use cases cited for the PON upgrade is the ability to provide both backhaul and fronthaul support for 5G deployments.

Despite the advantages of NG-PON2, however, several operators are considering an interim step on the road to next-generation PON. Companies like AT&T Inc. (NYSE: T) and Vodafone Group plc (NYSE: VOD) are evaluating XGS-PON technology for the near term as a less expensive alternative to NG-PON2.

For more information:

http://www.lightreading.com/gigabit/fttx/verizon-proves-ng-pon2-interoperability/d/d-id/729487   and

http://www.multichannel.com/news/technology/verizon-touts-progress-next-gen-fttp/410105

In Pursuit of Next Generation FTTP, Verizon OMCI Specs Seek NG-PON2 Interoperability