Verizon uses MoCA to reduce FiOS costs

An article appeared in ZDNet yesterday that provides a clear explanation about the modifications Verizon (VZ) is making to its FiOS FTTH rollout. It’s big news for MoCA and Entropic Communications, a private chip firm that I believe has this key FTTH design win.

I wrote previously that Verizon planned to use of MoCA only as a way for cable set top boxes (STB’s) to communicate with each other. A Motorola (MOT) STB made for Verizon was on display at CES2006 (shown at left) – it was using MoCA to stream video from another STB with DVR like functionality, allowing shows recorded on one STB to be shared with every other TV in the house.

Now, MoCA will be used to replace the Ethernet connection for broadband internet services as well. Verizon is planning to use MoCA as a way to eliminate the need to run CAT-5 Ethernet cabling from the outside PON ONU to PCs or WiFi Routers inside the home. This eliminates a major labor component in any FTTH install – the toughest part of my FiOS install was getting the fiber into my basement. Back then I convinced the Verizon techs to install the fugly PON ONU inside my basement. I imagine the answer going forward would be ‘no’ given the existing coax inside wiring from the cableco could be used instead.

I don’t know why the WSJ viewed this as negative in their article published two days ago. It looks like they were trying to assemble as much negative news into one article (trenching problems, electrical shorts, too much investment etc.) and this deployment change seemed to fit.

This is great news for the MoCA alliance who has been fighting a battle against the Homeplug Powerline Alliance, which proposed the Homeplug AV standard. It uses the existing electrical wiring in the home to provide wired connectivity without installing new wiring. MOCAs big advantage is speed, as coax will always have way more bandwidth than your power lines, proving yet again that one should never bet against Claude Shannon.

This is even better news for Entropic Communications, a private company that currently has leadership in MoCA silicon. According to the folks staffing the booth at CES, the Motorola STB was using Entropic silicon. Instead of only every STB/TV in a home now using a MoCA chip, every wired Ethernet connection in a home will need one too, though WiFi already plays a big role in eliminating new cabling.

I spoke with Itzhak Gurantz, CTO of Entropic while at CES 2006 and he helped me understand the differences between Homeplug AV and MoCA from a technical perspective. I came away impressed with MoCA, Itzhak, and Entropic. One STB hardly indicates a clean sweep of design wins, but having a big telco validate your technology and chipset is a dream come true for a startup.

I wonder if Verizon will share the coax with the video signals from the existing cable provider. MoCA is designed to not interfere with the spectrum used on coax for video or cable modems, but the co-existence of signals from two bitter enemies – Verizon and Comcast here in the Northeast – opens up some ugly finger pointing possibilities. I bet that Verizon won’t roll this technology out in a given area unless they have the proper franchise to offer video services.