Here's a simple competition about telecoms in Europe. In what field do Lithuania and Italy beat Germany and Spain? And Ireland have almost twice as many as the UK, but between them still have fewer than Iceland?
The answer is – the clue's in the headline to this article – the number of direct fibre connections to homes in each of those countries.
According to the figures gathered by the European division of the Fibre to the Home Council, an industry campaigning body, the UK had only 4,500 homes directly fibred in June 2011, but Ireland had 9,700 connected to fibre and Iceland 13,900. Lithuania had 343,400 and Italy 357,000, both beating Germany's 123,300 and Spain's 101,130, according to the figures, for June 2011.
Chris Holden, president of the FTTH Council Europe, refuses to be despondent about this. He sees that there is a political impetus behind broadband, led by Neelie Kroes, the European commissioner with the telecoms and media portfolio, and that putting fibre right through to the home makes sense.
"I think there's an appreciation that if you're using public money you should be spending it on a future-proof solution," says Holden. "We have a vision which is a sustainable future enabled by fibre to the home. We have a mission to accelerate the adoption. Yes we are a lobbying body, we go to see the Commission, and we provide inputs to all the consultation documents."
Leading the field
The numbers show some successes – though in some unexpected markets. In terms of highest penetration in Europe, the small Baltic state of Lithuania is leading the field, with more than 25% of homes connected by fibre. Less surprisingly, Norway and Sweden come second and third, with about 13-14%. But then come, in order, Slovenia, Russia, Bulgaria, Slovakia and Latvia – all former Soviet block countries that once had depressingly low penetration of anything.
To be strictly honest, the FTTH Council's definition includes fibre to the building, and that's why Russia scores well.
"Russia has been doing a lot lately," says Holden. "There are 5.1 million connections in Russia to the home, mainly fibre to the building, to the basement, with copper through the building."
Holden and his colleagues are happy to accept that, while they dislike intensely some operators' preference for fibre to the kerb (or curb, in the US spelling, giving the abbreviation FTTC).
With fibre to the building "the copper length is pretty short, so it's not as bad, and at least you're not putting cabinets in the street", he says. "And in Russia it works well because a lot of the buildings are multi-dwelling. But many don't have high-quality copper – so if you have to upgrade you might as well go to fibre. Modern fibres can be installed as easily as copper and as economically. It's not a cost-effective solution to replace copper [with more copper]."
And that's why he doesn't accept FTTC as a viable alternative to FTTH. Fibre to the kerb uses more energy, he warns, "because you need power to the cabinet" in the street. Worse, "that is stranded investment", because eventually the operator will decide to convert the last link to fibre and the cabinet will be wasted. "We're particularly concerned if it's public funding that it would be spent on a stranded investment," he warns.
A copper connection needs more maintenance, because the electronics in the cabinet – translating an optical signal to an electrical, and the other way round, can go wrong. "With fibre you wouldn't have to spend money on cabinets, and once they're in the ground any upgrades are done at the central office and at the customer end."
And he believes the fibre will inevitably reach all the way to the home in time – and the European Commission's own Digital Agenda says as much, he believes. In October 2011 Kroes and her colleagues put forward a plan that to spend almost €9.2 billion between 2014 and 2020 on pan-European projects to give EU citizens and businesses access to high-speed broadband networks and the services that run on them.
The Commission said that this money could generate a total of between €50 billion and €100 billion of public and private investment – a substantial proportion of the estimated €270 billion of broadband investment needed to meet its Digital Agenda targets on broadband.
The target is for 100% of homes in the EU to have at least 30 megabits, notes Holden. Above that, "the target is for more than 50% of subscribers at 100 megabits, and that means you have to pass a lot more than 50% of homes, so you can connect to more than 50%," he says. "We would estimate that 80% would need to have service available to be connected that would give them 100 megabits. We believe for 100 megabits you need fibre to the home."
Sweating the assets
Yes, a number of vendors are finding ways to push copper to its limit, he accepts. "We can understand incumbents sweating the assets of their copper as much as they can," says Holden. "We still believe fibre to the home is the proper end game because it’s future proof. If you do that once it's there [forever]. You can change the actives at each end. For copper we’re right at the end of its game, to be honest."
But why is there such a disparity between the targets of the Digital Agenda and individual national targets, which are often sadly modest? Some UK politicians, for example, still think of two megabits as "superfast broadband".
Holden agrees: "Two megabits is a bit of a joke when you're working from home transferring files. And then we have the vision of cloud computing. The final version of that is where all your data is somewhere on the network. When you download a file you expect it to be at least as fast as with your desktop machine. That will put a big demand on the network as well."
But he accepts that maybe the industry hasn't really got out the message about the benefits of fibre to the home. "We used to lobby most on why fibre, but now it's how fibre. Most people will recognise you will need fibre – it's a business case," he says. "What can we do to improve the demand, which improves the business case?"
He highlights as a great example of how to do it the action of Verizon in the US, which ran a campaign in towns and cities across the US to build up interest in its FiOS-branded fibre service. “They had roadshows that went into the communities ahead of the fibre, and noting the interest. It was a logical marketing campaign, to see where to go.”
That's missing in many European countries, he suggests, where operators install fibre only when there's a competitive threat from cable. "The cable people with Docsis 3 [technology] can move up to 100 megabits and the telecoms people move in with fibre."
He warns that operators shouldn't deliver 40 megabits and then expect customers to pay substantially more for an upgrade to 100 megabits. "Until you use up your 40 megabits you won't want 100," he says. "But some of our own council members in France were in a trial where they got 100 megabits, but when it was taken away after the trial they missed it because they were homeworkers. They went and asked for it. There's a lot of lack of marketing, which would help drive fibre to the home."
And it's easy to see how 100 megabits would be useful, he adds. "When we see new technologies come on line we see families with video, 3D, high definition, proper video conferencing so you can really work from home. When a family has all of this you can easily get up to 100 megabits. And then as you get technology improved you get the services improved that go with it. It's difficult to have the services improved if there's no capability of using them."
Meanwhile operators in other parts of the world are looking at even more than 100 megs. Australia and Hong Kong are both looking at a gigabit. "If you take America, there is a lot of talk about university gigabit cities, and we've heard about Google building networks. In Korea, the government has virtually mandated a gigabit target. In Europe we have a 100 megabit target which we were really pleased with, when that target was announced, because it gave people something to drive towards, but we still see people struggling towards 100 megabits."
As a result, much of Europe has a long way to go. Meanwhile "the Far East does it, the Middle East does it, America is doing it, then you get Australia, New Zealand, Singapore, before long you'll be disadvantaged if you don't have an infrastructure."
The FTTH Council Europe represents 150 companies, all of which are vendors rather than operators. Holden himself is a marketing manager for cable systems at Corning in his day job, promoting optical fibre cables to operators.
The organisation is one of a widening family of FTTH lobbying groups. "We have a number of councils now – a European council and an American council, which picks up Latin America. There's also an Asia-Pacific council and there's now a Middle East and North Africa council." That was part of the European council but it separated into a separate unit in 2011. "There's also a southern African council, for sub-Saharan Africa," says Holden.
"All these councils get together in an international advisory group to discuss common practices so that we all have the same message – as fibre-to-the-home councils not broadband councils."
And who are his heroes, in Europe at least? Not UK operators such as BT, which is promoting BT Infinity as fire but "is 98% fibre to the kerb, not fibre to the home", he says, nor its cable rival Virgin Media, which "is mostly fibre to the kerb".
Holden points to Portugal, where the council held its annual meeting in 2010, opened by José Socrates, who was then prime minister. His government had agreed with three of the country's main operators on the deployment of FTTH, backed by a line of credit to help support their investment plans. His goal was fibre to every home.
By the end of 2009 1.2 million Portuguese homes had been passed with fibre networks, and 13,500 subscribers had taken services by then. By June 2011 the number of homes available to fibre had risen to 1.9 million, and 231,000 families had taken up the offer – a penetration of 12%.
In Portugal, says Holden, "they differentiate their fibre services from their other services – and they market that strongly and they've been successful".
Today, according to the same FTTH Council figures, fibre is available to 9.5 million homes in North America, 4.6 million in Europe plus 5.6 million in Russia, 0.3 million in the Middle East but 46 million in the Asia Pacific region. "Europe is still lagging behind the rest," says Holden, trying to be cheerful.
But in the European Commission, "Neelie Kroes is very passionate. She is trying to drive those targets. She's spoken to national governments, to CEOs, to see what can be done."
What can she do more? "The Commission in the past has tried to be neutral on technology," he says. And its targets have been for download speed only. Add an upload target – to make broadband suitable for high-quality video when working from home – and fibre would stand out as the best way forward. "If you're doing true homeworking that's what you need," he says. "You should put an upload target in and that will make a difference."