Baby Bells’ fiber optic deal could crank up trenchless industry

An agreement among the nation’s three largest regional phone companies to standardize technical requirements for fiber-optic systems could create a lot more work for trenchless contractors in the near future.

Verizon, SBC Communications and BellSouth published a set of common standards last week for vendors trying to sell them fiber optics equipment that would provide ultra-fast Internet connections to homes and businesses. Having one standard should lower the cost of buying and installing the systems, says Ells Edwards, a spokesman for Verizon.

“It’s finally going to make economical sense to put fiber right into the home, right into the apartment or business, where before we couldn’t quite get it to work economically,” he says.

Ed Savage, trenchless product manager for Vermeer, says the standardization agreement will benefit the underground industry, but the timeframe depends on when the phone companies start investing in new fiber-optic systems. “I think this is one big hurdle we’ve gotten over,” he says.

The Baby Bells made the announcement in May, as they were pressing the Federal Communications Commission to make regulatory changes limiting the extent to which they will have to share their networks with competitors. The FCC will decide the issue in the final order under its Triennial Review of network interconnection regulations, which it is expected to publish soon.

The three carriers are promising widespread fiber optic deployment if the FCC adopts policies to their liking. Installation of the new fiber optic equipment could begin in early 2004, the companies say.

“We are willing to invest if there are no regulatory barriers,” Edwards says. “We see fiber as the ultimate solution for the home as well as small and large businesses. If the regulators get out of the way, we’ll be able to do it.”

Such an investment would be welcomed by the trenchless industry, which has been struggling against a 2-1/2-year industry slowdown. In late 2000 and early 2001, 80 to 90 percent of Vermeer’s drills were performing fiber optic work, Savage says. Since then, many of the company’s customers have diversified and spend the majority of their time on water, sewer and gas line projects.

Thousands of miles of fiber optics that were put in the ground during the telecom boom aren’t even being used. Most of that glut is in the form of massive trunk lines that cross the country and lines between and around cities. “I think it got overbuilt quick,” Savage says. “You ended up with more product in the ground than there was demand for. And when investors saw that, they pulled away funding.”

Edwards points out those long-haul lines that aren’t being used are not connected to homes or businesses. The SBC-Verizon-BellSouth agreement only affects equipment that brings fiber optics from neighborhood boxes directly to houses and buildings. The new trenchless work would be in bringing fiber optics from those boxes to new and existing structures.

For more information on the agreement, click the link to the right.