COMMUNICATIONS SBC lowers estimate for fiber-optic project

NEW YORK (AP) -- SBC Communications Inc. expects the first half of its program to bring fiber-optic cables to the edge of most neighborhoods will cost $4 billion through 2007, down from an earlier projection of up to $6 billion.
The buildout will replace copper lines serving neighborhoods with about 17 million homes, and extend fiber all the way into the home for another 1 million residences, officials from the San Antonio-based company said Thursday in a conference call with investors.
The SBC executives repeatedly emphasized the savings in cost and time of SBC's strategy as compared with the more ambitious approach embraced by Verizon Communications Inc., which has begun replacing all the copper in its network between every central office and every home.
They again rejected concerns that SBC's plan might not provide a big enough jump in capacity to deliver a simultaneous array of multimedia services such as high-definition television, video on demand, video conferencing and video gaming. The officials also asserted that SBC will capture about 70 percent of the operating savings made possible by replacing copper with fiber-optic technology.
Market
The 17 million homes slated for rewiring will be in markets populated mostly by what company officials described as "high-valued" and "medium-valued" customers: those who already spend a combined $110 to $200 a month on telephone, broadband, cellular, and cable TV services.
The $4 billion projection does not include the installation of any equipment or wiring at the home once a customer signs up for the new service. That will cost an addition $1 billion spread over 2005 and 2006, the company estimated.
While Verizon's approach will cost billions more and take longer to complete -- actual comparisons are difficult since Verizon has not detailed the cost or pace of its project beyond 2005 -- "fiber-to-the-home" allows far greater speed and capacity.
Initially, Verizon's all-fiber lines will be at least four times as fast as what SBC will be able to offer customers served by "fiber-to-the-neighborhood," which relies on existing copper lines to traverse the remaining distance of 3,000-to-5,000 feet between the new fiber lines and every home.
Bandwidth
The added speed means more bandwidth for digital TV channels, video on demand, and Web services such as video phone calls and interactive gaming.
But SBC brushed aside those concerns again on Thursday, saying its project will connect each home at speeds of between 20 and 25 megabytes per second. That would be enough, SBC officials said, for the simultaneous deliver of one high-definition digital TV stream, three standard-definition streams, plus an Internet connection with download speeds of 6 mbps and uploads of 1 mbps -- several times more robust than today's fastest DSL phone lines and broadband cable lines.