Down the street from the Pacific Bell Park, where the San Francisco Giants play, is a 300-acre plot of waterfront property built atop the ruins of the 1989 earthquake. The commercial and residential community being developed here, called Mission Bay, is also the site of SBC Communications' sole commercial trial of passive optical networking (PON) for fiber to the user.

Or at least it will be when construction of the buildings is complete — sometime next quarter, according to the site's developers. More than two years after SBC sent its initial requests to PON vendors, the trial still hasn't quite begun.

Mission Bay is emblematic of Bell PON deployments in general, which have advanced at a glacial pace. Verizon Communications is currently serving about 60 homes in Brambleton, Va., through a trial of Marconi PON gear. But Verizon chose the gear about three years ago, and Marconi has since backed away from the PON space. Daryl Ponder, CEO of PON market leader Optical Solutions, said RBOCs probably wouldn't launch appreciable PON deployments until 2004 or 2005.

As PON vendors grew tired of waiting for large-scale carrier deployments, they began hearing increasingly from small-town governments that were also tired of waiting for the Bells to deliver affordable fiber to the user. It was only a matter of time before these small towns and vendors got together.

PON players such as Alcatel, Optical Solutions and Alloptic — which serve a mix of independent telcos, greenfield land developers and municipalities (generally in that order) — all claim to see a recent surge of interest from municipalities.

In February, Ethernet PON vendor Alloptic announced its first municipal customer — a small university town in Washington state called Cheney, which has a population of 9300 and is 15 miles outside Spokane. Dissatisfied with the spotty DSL coverage of CenturyTel, the city's incumbent phone provider, Cheney is rolling out fiber to every home and business in town. The city's electric utility will operate the network as a wholesaler, allowing customers to have their choice of voice, video and Internet providers. Each customer will get 34 Mb/s of high-speed Internet access.

The town chose an Ethernet-based PON system because it was the most efficient for Cheney's compact 3.5-square-mile geography, bypassing the need for middlemen distribution boxes that would require electricity and maintenance. Alloptic's gear in particular stood out because of its flexibility.

The system uses a non-proprietary and open architecture, which allows multiple competitors to offer services over the pipes. And of all the vendors Cheney examined, including Alcatel, Wave7 Optics and Worldwide Packets, Alloptic's gear was the only one that could deliver three video signals simultaneously over single-mode equipment, said City Administrator Paul Schmidt. And it did so at no extra cost. “If we wanted to broadcast city council meetings on our own or educational television that may not be part of a cable package,” the extra video channels would be useful, Schmidt said. “If you've got more flexibility and scalability for the same cost, why wouldn't you go with that?”

Since the Cheney request for proposal (RFP) appeared last summer, Alloptic Service Products Manager, Greg Calton, said he's seen a dozen more RFPs from similar towns. Considering that Cheney is spending $6 million on equipment alone, these small towns could represent big bucks for PON vendors. “The number of towns this size across the country is well in excess of 10,000,” Calton said. “Even if a handful of them decide to do this, we see it as a real opportunity. This is the wave of the future.”

Ponder said that Optical Solutions, which currently has three municipal customers, saw several more enter the planning process in the past 18 months. “I know of at least twenty-five municipalities that are doing broadband deployment planning right now,” he said. “I'm amazed at the traction. They're the ones to keep your eye on going forward.” Together with a dozen other telecom firms and consultants, Optical Solutions introduced the “Muni Consortium” in Provo, Utah, last week to help municipalities with fiber-to-the-user plans.

Part of the reason for this traction, Ponder said, is the publicity of early municipal broadband cases, which inspired many towns to mimic the efforts of towns such as Glasgow, Ky., whose residents enjoy some of the lowest cable and broadband rates in the country thanks to their municipal utility (Telephony, Dec. 9, page 26).

Small towns may also be encouraged by a variety of federal and state funds earmarked to help shoulder the cost of rural broadband deployment, said Anna Reidy, analyst with Current Analysis. Cheney has requested federal funds for its fiber buildout, which will likely cost $10 million to $12 million. But because the city's electric utility will use the network to read meters remotely, the city expects the project to save money for the utility.

PON gear in particular offers a low-cost solution because it doesn't require active electronics in the outside plant equipment. According to Mark Klimek, Alcatel's senior director of marketing, it fits well with the increasingly popular choice among local utilities to overlay fiber instead of using existing hybrid fiber-coax (HFC) lines — a decision guided by long-term thinking.

“For many utilities, their business models have fairly long paybacks — over five years,” Klimek said. “When you look at what services will be required in five or ten years, you're going to need more bandwidth and capabilities. Current HFC technology is pretty much running into the wall. You can't do that much more with it. It makes much more sense to go directly to fiber.”

Municipal broadband plans usually appear in cities that are too small to warrant attention from the RBOCs. But that hasn't stopped Bell company lawyers from blocking some cities' broadband plans with state legislation.

For example, in Bristol, Va., where the city uses Alcatel gear for residential PON and Optical Solutions for businesses, telecom lobbyists pushed through a statewide ban on municipal broadband that was overturned in court and eventually replaced with a bill that forces cities such as Bristol to inflate their cost structure for telecom services to match that of the private sector.

But in many cases (such as Cheney and Chelan County, Wash., Alcatel's only other municipal PON customer), public fiber is rolled out as a wholesale network, so the city doesn't compete with the private sector for retail customers. Although service providers have to pay the city for use of the network, they're able to offer high-bandwidth services without having to foot the bill for risky, expensive fiber deployments.

“I'm sure telecoms see all this as a threat, but we're not excluding anybody,” Cheney's Schmidt said. “I'd love to have CenturyTel run [services] over our pipes.”

With continued publicity, municipal fiber buildouts may also serve as catalysts for further fiber deployment and poster children for broadband. At the moment, PON vendors are all salivating over an RFP to be issued this month from Dynamic City, a group coordinating the largest fiber-to-the-user project in the world in central Utah — one with a budget of almost $350 million. The project, dubbed Utopia, would string fiber through 17 Utah towns, starting with little-known front-runners Murray, Orem and Layton. It would ultimately serve some 170,000 homes and 20,000 businesses.

Utopia is entertaining PON vendors but isn't limiting itself strictly to PON. An equipment provider should be chosen in about two months, said Joel Sybrowsky, executive vice president of Dynamic City. If the project is successful, its planners expect the model to spread rapidly to copycat towns, especially ones that are frustrated by incumbent carriers and want to own their own networks for a change.

“[Other] cities here in Utah are looking at Utopia,” Sybrowsky said. “Once it's successful, we anticipate other cities will want to join. We also anticipate other communities across the country looking at Utopia and wanting to establish their own.”

For PON vendors, utopia is the perfect word to describe that scenario.