Homestead, Fla., made news on Aug. 24, 1992, as the community hardest hit by Hurricane Andrew. Just south of Miami, its residents certainly hope to stay out of the spotlight this week, as Frances hits.
Some IP infrastructure players, however, would like to direct our attention precisely there, because this city of 32,000 directed a good chunk of its Andrew recovery money to the infrastructure that supports a novel kind of triple-play IP service. This is to be telephone, video and data service over really broad broadband—100M-bps optical fiber–to the home.
Homestead is not the first U.S. city to get into the VOIP (voice over IP) business. Several have taken advantage of their rights to dig up their own streets and lay down fiber, becoming CLECs (Competitive Local Exchange Carriers). Homestead’s case, however, is groundbreaking on several different levels, and bears watching.
In the first place, Hurricane Andrew presented Homestead with the worst kind of “greenfield” opportunity, simply because it destroyed 80 percent of the town. It destroyed 5,000 homes completely, demolished its Air Force base, and destroyed or damaged 85,000 businesses.
Where no legacy wiring exists, IP’s cost of deployment compares more favorably with traditional copper. And so, among the up to 15,000 homes that are due to go up in Homestead by 2010, Ethernet-carrying fiber-optic cable is being built right in, at a cost of roughly $1,000 per home. This will support a triple-play service of flat-fee IP voice, hundreds of channels of IP-TV and HD-TV, movies-on-demand, videoconferencing, and high-speed data. The first homes are due to deploy by year’s end.
The service is integrated with television in a way I’ve not seen before: In the home, via set-top box and remote control, it will allow subscribers to control their phones and calling features through the TV screen. In practical terms, this means that if your mother-in-law calls during “The West Wing,” you will see her caller ID from a picture-within-a picture, if you like, and you will be able to send her to voice mail from the comfort of your couch-potato seat.
Next Page: Self-service a la hotel TV systems.
Where movies and billing information are concerned, it will operate as hotel TV systems do, letting you order movies for playing within three to four days, and showing you the status of your account at any time. Like your cable company, it will offer on-screen program guides. It will even let you play voice mail through the TV. The service will also have a somewhat richer and equally integrated Web portal to the same calling features, movie ordering and account information.
Three infrastructure companies, led by IP Centrex platform maker NetCentrex Inc., formed a consortium, called iPlay3, in order to integrate and deliver this combined offering. The other two were Highdeal, which makes a rating, billing, settlement and data analysis engine for use by telecom, Internet and entertainment companies; and Envivio Inc., which makes video-streaming and broadcasting solutions using MPEG-4/H.264 video formats.
The town found a partner in LatAm Communications, a managed video and communications service provider supplying VOIP and video-on-demand to clients in South Florida and Latin America. Using Homestead’s power utility easements, a community development block grant from the state of Florida and its own investment of over $4.5 million, LatAm started the project by laying a 15-mile “self-healing” fiber-optic ring around the city and by building a network operating center on the site of the “Smart Park”–a 160-acre tract of land owned by the city.
LatAm wired the Smart Park and secured the right to turn it into a tax-favored foreign trade zone to attract office and warehouse tenants and stimulate job growth. LatAm also has agreed to pay Homestead a portion of revenue for every strand of fiber used in the ring, prepaying for the first five years. IP Centrex (hosted IP PBX) services are also being offered to Smart Park business occupants.
Fiber has been seen as an expensive broadband medium for individual homes–one hard to recover in subscriber costs. Verizon and SBC have started to deploy fiber in certain communities, to prepare their own triple plays in their struggle against cable operators. Alain Fernando-Santana, CEO of NetCentrex, says that many rural communities have laid down local fiber loops to get the broadband that their rural carriers won’t invest in.
But LatAm Telecommunications has several advantages with Homestead, according to Roman Martinez, CEO. The first, of course, is its greenfield status. Wiring at construction time is running about $1,100 less per house than it would in an overbuild. “The cost is low compared with fiber-to-the-home deployments elsewhere, because we knew where these deployments would be,” he explains. “Most of the new houses are within a mile of the ring. The ‘last mile’ is really a last mile.”
Next Page: Greenfield advantages.
“We have about 60 points within the ring where we can connect new deployments,” Martinez adds. Retrofitted deployments will run about $300 higher. Martinez explains that he has also brought his costs down by using standard Ethernet components and cabling from a range of vendors. He is similarly happy to choose IP phones or adapters from a range of vendors: The NetCentrex softswitch running the voice part of the service can run with all three widely used VOIP protocols: H.323, MGCP and SIP.
The story is also worth watching because Martinez and iPlay3 are aiming beyond the “triple.” LatAm is looking to use the IP network to incorporate and offer alarm monitoring services, interactive gaming, meter reading, e-learning for community colleges and such city services as interactive Webcasts of town council meetings. “The set-top box, with the Centrino chip, can take data over a wireless network to intrusion-detection contacts on doors and windows,” says NetCentrex’s Fernando-Santana. Going forward, that set-top box can be instructed to notify alarm service customers–or security services–with Short Message Service messages or phone calls.
Speaking in future tense is easy for visionaries. I hope to write in present and past tense about this one. Let’s try to keep an eye on Homestead. Will this video-PC-voice integration work? Will the offering catch on with the occupants of these new homes and Smart Park offices? Will it beat cable on the strength of its triple-plus offerings and TV portal medium? Will it find enough services to sell through 100M bit to the premise, and will Martinez find other Miami-area communities to support through the same infrastructure? He’s made this plausible by locating his servers in Miami’s main carrier peering point.
If this catches on, it’s going to make us revisit asymmetric digital subscriber line and VDSL advances that come under 30M bps. It may make other cities take notice. It’s also going to help blur the distinction in the consumer’s mind between TV, PC and telco and, with it, our conception of “online.”