Texas Wired: Discover ClearWorks,a company that is introducing a whole new world to homeowners in Houston.
(from Corning's GuideLines Magazine, Winter 2000)
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In the suburbs around Houston, pastures are giving way to upscale neighborhoods with names like North Pointe, Stone Gate and Rock Creek. Fueled by high-tech prosperity, the new developments are springing up fast.
Employees of Houston-based companies like Compaq Computer and Texas Instruments are now in a position to build new, state-of-the-art houses, and they want their houses wired. For these homeowners, high-speed Internet access,video on-demand and multiple telephone lines are on the list of must-haves.
Priming the demand is ClearWorks.net, Inc., a provider of voice, data and video services via fiber optic residential networks. ClearWorks, founded in Houston in 1998, is determined to solve the "last mile" problem by installing fiber-to-the-home and is offering high-speed digital connections to homeowners in the new developments. Homeowners are going for it in a big way.
Within two years of operation, ClearWorks had 6o,ooo homes in 15 developments under contract and had begun to expand their operations to other cities. "Consumers want the service," said John Diaz, ClearWorks president. "They're always calling us, asking 'Where are you going next?" Diazs biggest problem now is implementing the network construction, and his crews are working at breakneck speed to get fiber in the ground and into the walls of under-construction homes.
THE VISION
Michael T. McClere, ClearWorks' CEO, is a man with a vision. "Voice, video and data are all converging," he said. "We're starting to see telephone companies and cableTV companies becoming ISPs. We think we know where the market's headed, so we've elected to provide all services in a convergent model to our consumers." Thanks to the Telecommunications Act of 1996, deregulation of the industry has facilitated market entry for players like ClearWorks.
According to McClere, the idea was to devise a sole method for delivering dial tone, cable TV, high-speed Internet connectivity and other services. "We designed a fiber-to-the-home network to deliver all these services in a convergent model," he said. "That means we've got much less infrastructure to deal with because we're doing everything on one 100 percent fiber optics-based system.
We're running fiber up to and inside homes for the delivery of all services, unlike anybody else in the market right now. We're part telephone company, part ISP, part video rental store, part cable TV company -all rolled together."
One of the reasons ClearWorks chose fiber, McClere said, is that fiber has almost unlimited bandwidth. "We wanted to take advantage of that to deliver a multitude of services. We've heard a lot of industry talk --0h, fiber-to-the-home is not a viable technology, it's too expensive, etc.' We don't believe any of that talk is true. We're delivering more than dial tone. When you start delivering cable TV, video on-demand and high-speed Internet connectivity, fiber becomes feasible very quickly. We think it's the only thing we can invest in that has a long-term return on our dollar."
CIearWorks has a massive task ahead-to rebuild the nation's infrastructure with fiber all the way to the home. The company's strategy for meeting this challenge is to go after new residential development that does not have any infrastructure built yet.
"When we build the initial infrastructure as the community is built," McClere said, "we're putting in state-of-the-art technology, i.e.,fiber-to-the-home. We're concentrating on that end of the market because that's where we can begin. What we're talking about doing is rebuilding the nation's infrastructure with a l00 percent fiber solution. That's pretty exciting, because the limiting factor in getting bandwidth to the consumer is that last mile of old copper infrastructure."
How DO THEY DO IT
ClearWorks is providing l00 Mbps switched service with up to six drops per home. John Diaz makes a point: "That's not shared service. It's l00 Meg for each home." This is particularly advantageous to homeowners who use the Internet at peak usage times. According to Diaz, heaviest usage occurs on Saturday at 11:3o a.m. With switched l00 Mbps service, consumers who have a "bandwidth hog" in the neighborhood don't have to wait while he downloads a movie.
The physical plant consists of Corning Cable Systems (formerly Siecor) optical cable, carrying Corning single-mode fiber. The wiring scheme calls for four fibers terminating in a box that functions as a node located inside the master bedroom closet of each home. Two of the fibers are dedicated to Internet use and one for both video and voice.
The fourth fiber is held in reserve. From the box, copper wiring goes to data ports in each room: coax for TV, cat 5 for voice and data, cat 3 for the security system. The data ports have four outlets where home-owners can plug in their computers, telephones and TVs, and move them around from room to room as they wish. Connecting the home back to the ClearWorks distribution point is a 144-fiber count cable.
The high fiber count, according to Diaz, is dictated by Internet use. "Of 72 fibers," he said, "7o are for the Internet." Typically, ClearWorks installs 1,5oo homes per distribution point. For the homeowner, the cost is affordable, usually about $1,000, which is added to the price of the home and incorporated into the mortgage.
"One of the keys to our solution," McClere says, "is that we're using lnternet technology for the deployment of all services." That makes it easy for consumers to use. By using Internet mechanisms to deliver video on-demand, for example, ClearWorks can provide the consumer at home a menu for selecting from a library of video titles.
Video on-demand is sometimes regarded as a demand driver of the future, but McClere feels the only thing preventing it now is bandwidth. "Right now, there's not very much bandwidth," he said. "Ninety-six percent of the population is still behind a 56K modem, which is not very fast or user friendly.
By providing a large amount of bandwidth, we can deliver real-time video-demand. There's a whole video distribution network set up already. The infrastructure already exists for supplying movies in digital format. With our use of Internet technology, you can launch any of these videos to your television:'
NEW WORLD
As ClearWorks gains new subscribers, they are introducing them to a whole new world, according to McClere. "Bandwidth really enables a lot of new services that you couldn't consume unless you had it," he said."For example, videoconferencing from the desktop has been pretty limited because of bandwidth constraints. With a 56k modem, you don't get a very good signal. But with high bandwidth, we can real-time videoconference. That's going to be an enabler for telecommuting."
Builders and developers seem to be waking up to the fact that there is something new to consider about their communities: technology. Anticipating the need or desire for technology and building it right into the home is a priority in today's market, according to McClere. "Some builders out there are still developing on a 1940s standard for wiring and technology. They need to under-stand how technology integrates into what they do. I think it will continue to ripple through the entire industry and cause major changes. Gone are the days when you can fail to consider technology in the home."
Some builders are calling ClearWorks "fiber-to-the-home pioneers." Developers are seeing how high-bandwidth services are pumping up home sales. Johnnie Staggs, construction manager for Village Builders, is busy in the construction office trailer at the new 3,000-home Stone Gate development, located in Houston's suburban north-west sector.
Stone Gate is another ClearWorks project. Staggs said, "They're smart homes. It's really where technology's going now--it's almost a necessity. People think it's a good value, and that's a selling point. They want media rooms and home offices. Many of our buyers have their own company and work out of the home."
Presently, Staggs reports that the builder is selling 15 new homes per month, with another two years of construction anticipated. ClearWorks residential wiring crews are on the scene, pulling fiber into the homes and wiring each room as construction progresses. They are in a hurry because they are responsible for providing fiber to the home, a feature that many new homeowners desire.
In fact, in the glossy Stone Gate marketing brochure, fiber optic connectivity and high-capacity Internet access are advertised three pages before the on-site 18-hole golf course.
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When Nathan and Pam Berlin started looking for a new house in the Houston suburbs, their search led them to North Pointe, a new development wired with optical fiber. The Berlins bought one of the first 300 homes to be occupied in the 3,000-home neighborhood, which includes homes ranging in price from $90,000-$350,000.
For the Berlins, one of the convincing factors was the communications service. "We liked this deal," Nathan said. "Cable TV Internet, telephone, security --all in one package."
The Berlins are customers of ClearWorks Communications, and they are enthusiastic about the 100 Mbps service that connects their home to the world. "We moved here from Waller, Texas, 20 miles away," Nathan said. "We had no Internet connection. We didn't even want a computer at home. Now we're on it all the time."
Nathan, a Fluor Daniel employee, likes to use the Internet to participate in stock chat lines and view his portfolio via an Ameritrade account. Ten-year-old daughter Ashley has not had much computer experience at school yet, but she has quickly learned to navigate the Internet to access video games and music. For Pam, the most impressive benefit of their fiber optic connection is the telephone service.
"It's fabulous," she said. "Our phone bill alone used to be $100 a month, cable TV runs at least $40, plus another $35 for the security system - and an Internet provider on top of that. We get all that now for $139.99 per month."
Being among ClearWorks' early customers, the Berlins are on a first-name basis with ClearWorks employees. "They're really good about service," Pam said. "If we call Randy or Marsha - they can do a lot on the phone. They'll come right out if necessary. The service is right on the ball."
Nathan said, "We're shareholders, too. The neighbors really like ClearWorks, and most them have bought stock in the company." Pam and Nathan clearly enjoy being part of a small customer base. At the rate ClearWorks is expanding, that customer base will not be small for long.
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