FTTH Specialist Says Private Beats Public

When we heard that Broadweave Networks had purchased the hyped but troubled iProvo network, we called to learn more about the company.

by Alex Goldman ISP-Planet Managing Editor [June 13, 2008]

South Jordan, Utah-based Broadweave Networks has been in the fiber game since 1999, when it was founded. The company has focused on the greenfield FTTH sector, explains Steve Christensen, Broadweave CEO, chairman, and co-founder.

Christensen explains that those who want to build fiber have two options. "You can build in an existing neighborhood. You can put up roadblocks, dig up streets, and lay fiber on top of the two incumbents. Or you can go to new developments that have open trenches and provide cooperation from the real estate developer. The costs of greenfield FTTH are substantially lower."

In 2003, the company connected the Traverse Mountain development, with about 8,000 homes, located between Salt Lake City and Provo.

The company's second project was an agreement with the Utah Trust Lands Administration. "It's a deal for fiber, covering up to 21,000 units, depending on the final details," says Christensen. "The first 1,200 homes are under way right now."

Then Broadweave heard about iProvo.

The iProvo RFP
The iProvo RFP [.pdf], issued on April 18, 2007, was not the average RFP. It was clear that there was a crisis.

The RFP said:

This is an open invitation and the City may elect as the sole judge to proceed with any proposal that best serves its best interest at that time. Time is of the essence and first-in-time preference will be given to those applicants with similar proposals.

The RFP said that iProvo was looking for established telecommunications companies with marketing and R&D capabilities.

But some are not convinced. Local ISP owner Pete Ashdown, of XMission (which dates back to pre-broadband days and is a provider on UTOPIA but not iProvo), wrote in his blog that the RFP said nothing about an acquisition and was about telecommunications companies providing services on the government network.

Christensen was not the first to read the RFP. He says he saw it only in November. "It said, 'you put together a proposal and we'll read it.'"

So he proposed buying the network.

iProvo that was
Christensen says that when he talked to the network owners, he found two significant problems: a flawed business plan, and CPE with a serious technical flaw.

The public network wasn't working, as a business, Christensen says. There were many ISPs on the network, and they were competing with each other on price. "It was a race to the bottom."

They were inefficient, with about one tech per 300 customers. The ideal, he says, is one tech for a thousand or more customers.

The ISPs on iProvo were competing with each other and not with the phone and cable companies.

The ISPs were not directly integrated into the iProvo network the way Broadweave will be. "The service provider does not own the phone switch, the network, or the cable head end," says Christensen. "It doesn't have software with hooks into those devices. In order to activate a customer, a CSR has to enter data into [dozens] of different systems. If you own it all, the software will have hooks into the TV head end, the network, etc. We spent the first years of our existence building software to automate provisioning. It handles the account on the switch, activates voicemail, connects to the TV headend, configures the FTTH network and the gear on the network to give the customer the right bandwidth."

And that's not all. You'd think there would be only two entities involved: the service provider and the ISP. But many ISPs were using third party providers to obtain voice minutes. When there were technical issues, Christensen says, there was a lot of finger pointing.

The technical issues, Christensen says, resulted in part from a flawed gateway. The box, Christensen says, "was transcoding SIP on top of MCGP." The result: deeply flawed voice service.

Without reliable telephone service, the phone and cable companies were able to compete with fibe. The fiber network obtained zero business customers and fewer residential customers.

The plan
Broadweave expects to change all of this. The company purchased the customers of the best ISPs on the network (Nuvont and MSTAR), and added a company called Veracity that specializes in providing business services.

Even more importantly, the company announced [.pdf] in May that it is replacing all of the CPE in the networks (variously called portals or Network Interface Devices). In the Broadweave press release, Christensen says, "If the manufacturer fixes the problems with the current version of home portals by implementing a fix to the firmware, then Broadweave will be happy to keep those devices on the network and will continue to purchase equipment from the manufacturer. Having said that, the home portals on the iProvo network today do not natively support SIP."

The technology
This issue demonstrates both the benefit and the risk of using an Open Ethernet architecture instead of the *PON architectures favored by the ILECs.

"PON systems are proprietary," says Christensen. "They're not based on standards. They're based on the GPON recommendation. There's no interoperability between equipment from different vendors."

But you get all your equipment from one vendor, and it's guaranteed to work.

"Active Ethernet guarantees interoperability because it's a standard. But it's more challenging to implement, to get equipment from different manufacturers to work together. But the reward is great: you're not beholden to single manufacturer."

So if the maker of the CPE that's currently on iProvo fails to implement SIP natively, Broadweave can get equipment from another manufacturer.

Politics
Will it work? It helps that the company is local. Broadweave's four founders all have ties to Provo. One co-founder, Robert Frankenberg, is a former CEO of Novell, which is based in Provo. The other three co-founders also have ties to Provo and to the local university, Brigham Young University (BYU).

But it's a tough situation. Some detractors of the sale of the network say that Broadweave cannot handle a network as big as iProvo. On the other hand, if Broadweave succeeds and makes the network profitable, those same detractors may say that the city was ripped off and that Broadweave didn't pay enough for the network.

Christensen says he's just focused on making this a success. "Our number run prioirity right now is success in iProvo. We want to make the change from government run to a financially successful private enterprise."

Of course, if it works, it won't stop at Provo. "We want to hit the ball out of the park. There are a lot of struggling FTTH opportunities out there. We will build a case study."

Christensen believes that open networks are doomed to fail, and that the financial realities will leave many more struggling. If he turns iProvo around from struggling government-run network to profitable private enterprise, he will have a strong argument.

But the community is not yet on his side. The city council vote authorizing the sale was a 4-3 win, and council meetings lasted until midnight. It will not be easy. It's a story that every ISP should watch, because it's not just about Provo. It's about whether and how governments should build networks, and the moral of the story is yet to be told.

It's the type of drama that Broadweave, initially, planned to avoid by working with only greenfield projects.

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