Telco Fiber Looking Better and Better

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There is a lot to chew on in this Telephony Online story about AT&T's fiber rollout, named Project Lightspeed. The company promised to launch in 15 cities this year. Though only San Antonio and Houston have fiber thus far, the carrier says it still aims to meet the goal.


Launching in 13 cities in about three weeks is a long shot. Even if the company does make the deadline, it will be interesting to see how many neighborhoods in the cities actually have access to the service.


In a larger sense, whether the launch spills into 2007 doesn't matter much. What is important is the battle between the telephone companies and cable operators. Right now, it looks like the telephone industry has the upper hand.


Cable operators, with their huge base of deployed coaxial cable, built a big lead in the 1990s and the early part of this decade against the telcos. Now, however, the market has segmented itself into the lower-priced and slower DSL Chevies vs. the faster and more expensive cable Lexuses (Lexi?).


DSL, perhaps, is fine for the huge segment of the people who are upgrading from dial-up, while early adopters were probably more willing to pay extra for faster cable modems. Whatever the reason, analysts generally agree that DSL is closing the gap.


This gradual shift may only be the beginning of cable's troubles. This Ars Technica story highlights a Cable Industry Insider report that says telco fiber will outclass the next step in cable evolution, which is the third iteration of the Data Over Cable Service Interface Specification (DOCSIS 3.0).


Copper is slower than coax, and coax is slower than fiber. The cable industry's problem is that it has no technology waiting in the wings to beat fiber.


Of course, the battle for business and consumer business is fought over applications, not the underlying platforms. Clearly, other factors besides speed are in play. It seems clear that if cable operators don't retain their savvy marketing, they are in for a tough time.


How this shakes out will have huge ramifications for the future of convergence. Indeed, it makes the question of whether AT&T -- which is struggling to complete its merger with BellSouth -- will launch in 13 markets or not seem trivial.