FTTH
In the U.S., there are increasing numbers of organizations trying to do just that, driven by competitive forces or dreams of economic development. However, so far hardly one percent of American households have the service available.
The service is called fiber-to-the-home (FTTH), although some call it fiber-to-the-premises (FTTP) since businesses can get it as well. The idea is that the optical fiber used in backbone networks is extended all the way to the final customer, where it terminates in a device that converts the optical signals to conventional electronic signals. The fiber is no costlier to buy and install than copper, but lasts much longer than copper wire, promising lower maintenance costs.
The fiber, meanwhile, is basically a passive pipe through which light flows. Its maximum theoretical capacity is usually taken to be 100 terabits, but current backbone networks rarely go faster than two terabits. The speed available with FTTH is determined by the electronics at either end of the fiber, and is usually in the megabit range-but that speed could be increased simply by upgrading the electronics. That makes FTTH ‘future proof’.
The cost of installing FTTH, as compared to installing copper, became roughly equal around the end of 2003, thanks to falling prices for the customer terminals. Mike Render, head of Render Vanderslice & Associates, a market research firm, estimated that the average cost of provisioning a house with FTTH will be about $1,500 in 2005, compared to $7,500 back in 1993.
Data, voice & IP-TV
The price is still ten to 30 percent more than a copper installation, with most of the difference being in the cost of the customer terminal. But having a fiber network would allow a carrier to charge for three services - voice, data and TV - so the premium looks small compared to the possibility of tripling the revenue from each customer.
The result: a sudden rush in 2004 of carriers announcing FTTH plans. For instance, Verizon Communications, a huge carrier with 140 million access lines in 29 states, announced plans to have FTTH available to one million customers in 2004 and two million in 2005, and hopes to have it generally available in about six years.
Via FTTH, Verizon currently offers a data service called FiOS, with download speeds of five, 15, or 30 megabits, costing $34.95, $44.94, or $199.95 per month. Installation is free, and the customers can use their existing phones and keep their previous phone numbers. Verizon will begin offering a broadband TV service over its FTTH lines later in 2005, but details are not available yet.
The other major carrier involved in FTTH is SBC Communications, with 52 million subscriber lines in 13 states. It has announced a combined FTTH and fiber-to-the-node (FTTN) program called Project Lightspeed. FTTN will be used in existing neighborhoods, with the ‘last mile’ apparently being handled by a form of DSL. FTTH will be used in new ‘green field’ developments. SBC announced that it expects to have FTTN available to 17 million households by the end of 2007, and FTTH to another one million. Project Lightspeed will cost SBC about $5 billion, but the project will replace a lot of spending on its current network. Actual services and pricing have not been announced.
But for the last several years, a lot of FTTH activity has been the result of small, isolated cities seizing on FTTH as a way to promote economic development (and ease their isolation.) The Fiber To The Home Council of North American listed 214 communities that had their own FTTH system installed and running in 2004. There were 125 in 2003 and 68 in 2002. Usually they have given up on getting FTTH through their local phone company, and install the fiber themselves, paying for it various ways. But they often encounter hostile lobbying by the local phone companies, who may imply that FTTH is an unproven and unreliable technology - even while installing it in their own networks.
As for the total number of users in the US, Render’s latest figures were for October 2004, before a lot of the Verizon installations took place. At that point there were 146,000 homes in the U.S. with FTTH service. Another 970,000 had FTTH available to them. In neighborhoods where the service is actively promoted, about a quarter of the residents subscribe.
Many American FTTH services use a passive optical network (PON) with a passive splitter in the node and active electronics in the customer terminal. The most common version of PON called BPON, offering 622 megabits outbound to the subscribers and 155 megabits inbound. If the outbound channel is split by a prism among 32 subscribers, each subscriber gets almost 20 megabits, which is enough for voice, data, and a six-megabit HDTV channel using MPEG4 compression. (Standard IP-TV usually takes 3.5 megabits.) The gigabit version of PON, called GPON, involves 2.5 gigabits outbound and 1.5 gigabits inbound, but it won’t appear in the US market for a couple more years.
Lamont Wood