FTTH News

High-speed broadband has become so ubiquitous in the United States that the baseline for broadband could become as high as 10 Mbps downstream, suggests a new White House report. Meanwhile, fiber-based broadband access continues to lag other media in terms of reach, even at 100-Mbps levels.

The report, “Four Years of Broadband Growth,” represents the White House’s assessment of how broadband access in the United States has improved as the result of the Obama Administration’ policies as well as significant investment from the private sector. Report authors the Office of Science and Technology Policy and The National Economic Council note that the government defines “broadband” services as 3 Mbps downstream and 768 kbps upstream – although the Federal Communications Administration uses at least 4 Mbps downstream and upstream speeds of at least 1 Mbps. However, thanks to greater penetration of wired and wireless broadband access networks, 91.4% of Americans have access to wired broadband networks that are advertised as capable of offering 10 Mbps downstream, the report authors assert. Wireless networks capable of such downstream speeds reach 81% of the U.S. population, the report adds.

“Nonetheless, we acknowledge that the country is rapidly reaching the point at which baseline broadband evaluations should increase, and might instead begin at 10 Mbps downstream. This evolving baseline reflects a growing need for increased bandwidth as more Americans use the Internet for work and to build career skills,” the authors suggest.

While the government has helped fund broadband expansion through such programs as the American Reinvestment and Recovery Act, private industry has footed most of the bill for broadband access network improvements. The report says that the private sector has invested nearly $250 billion to improve wired and wireless broadband infrastructure since President Obama took office in January 2009.

The report also notes that more fiber cables have been deployed in the United States over the last two years than in any similar period since 2000, according to the FCC. That said, fiber to the home (FTTH) has a ways to go before it becomes the primary means of broadband services access. According to the report, only 19.86% of the population has access to 10-Mbps downstream services available to them via FTTH. This compares to just over 86% offered this speed via cable operators, just over 43% via DSL, and 78% via wireless.

Fiber’s support of 100 Mbps by percentage is even worse comparatively. Fiber-fed 100-Mbps services are available to only 6.79% of the U.S. population, compared with 44.22% of the population via hybrid fiber/coax (HFC) networks. The only data rate that FTTH dominates is 1-Gbps services, which the report says are only available via fiber cable. However, a mere 3.1% of the U.S. population has access to such services, according to the report.

BTOpenreach has today officially made its new 220Mbps (20Mbps upload) capable Fibre-to-the-Premises (FTTP) based ultrafast broadband service, which will eventually replace its old 110Mbps/100Mbps products, available to UK ISPs and their customers.

The new product is intended to help Openreach “streamline” their portfolio of Fibre-to-the-Premises (FTTP) products (here). It’s also intended to act as a more attractive alternative to the operators top-end 330Mbps (30Mbps uploads) service, which few ISPs have adopted due to the high cost of data capacity and less attractive pricing.

The 220Mbps service, which also supports a prioritised rate of 20Mbps, costs £92 +vat to install (engineer visit and the necessary connection kit) and its annual rental price ranges from £187.32 +vat per year if you take the Transition Product (only available in conjunction with a phone line) to £288 +vat for the standalone solution. ISPs will charge more than this as they also need to account for additional costs (e.g. value-added features) and a profit margin.

By comparison the standalone price for BT’s 110Mbps (15Mbps upload) product is £258.48 per year, which rises to £396 for their 330Mbps (20Mbps upload) solution. Unfortunately only a small number of UK premises currently have access to a native FTTP service but BT are currently rolling out a new FTTP-on-Demand (FTTPoD / FoD) product to solve that.

FoD essentially makes FTTP available to all existing FTTC (up to 80Mbps) lines, which is currently on course to cover about 66% of the UK by spring 2014. The only downside, which is sadly rather significant, is that you could end up paying thousands of pounds to have it installed (details). Suffice to say that many ISPs find this to be a confusing proposition (here).

But anybody that does have deep enough pockets could perhaps consider it to be a worthy long-term investment in the value of their home.

Telus (NYSE: TU) is expanding its fiber and rural broadband facilities in Calgary and Edmonton as part of a broader plan to spend $676 million throughout Alberta this year.

The telco will invest $121 million U.S. dollars in Calgary and $99.5 million in the Edmonton region. These investments are part of its three-year, $1.93 billion commitment made a year ago to expand services in the region.

A key piece of the new investments will be dedicated to expanding the reach of its GPON-based fiber to the premises (FTTP) Optik service, which currently provides 50 Mbps and supports its IPTV service, Optik TV.

By the end of the year, Telus said Optik TV will be built out to reach almost 90 percent of Alberta households. Telus currently has 712,000 Optik TV customers.

Telus’ IPTV moves continue to help drive broadband growth.

Similar to AT&T (NYSE: T) and CenturyLink (NYSE: CTL), Telus reported in Q1 2013 that the 16,000 new broadband Internet subscribers it added “reflect successful promotions and the pull-through effect of Optik TV sales.” The telco’s high-speed subscriber base of 1.3 million rose 85,000, or 6.8 percent year-over-year.

While the use of passive optical network (PON) technology for mobile backhaul isn’t new, Julie Kunstler, principal analyst at Ovum, suggests that the evolution through 3G, 4G LTE, and small cells will make the FTTx technology even more appealing for such applications. The result could be a market opportunity on the scale of $1 billion, she predicts.

“PON is an excellent fit for mobile backhaul traffic, especially for macrocells and small cells located in or near urban areas,” Kunstler says. “Significant amounts of mobile traffic are created in urban areas, such as train stations, shopping centers, and cultural and sporting events. Typically FTTx networks are deployed first in urban areas.”

Communications services providers (CSPs) who deployed PON with business customers in mind will likely make the leap first, if they haven’t already. And more fiber-optic network builders likely will follow this lead, Kunstler believes.

“Today, given the costs of building the fiber network, more and more CSPs are planning their FTTx around mixed services, including FTTH, fiber to the enterprises, and mobile data backhaul,” she says. From a technical perspective, PON is a superb fit for mobile backhaul. PON component and equipment vendors have added essential timing synchronization functions to meet the stringent timing requirements of wireless networks.”

Such PON systems vendors could see a significant return on their R&D investments, Kunstler believes. “From a total addressable market perspective, the growth in public carrier small cells could represent a $1 billion market for PON component and equipment vendors,” she explains. “Governments should welcome this market application for PON as it will accelerate network monetization, encouraging CSPs to accelerate FTTx network deployments.”

Keynote sessions for the second day of the annual FTTH Council Asia Pacific Conference focused on real-life business models and network monetization.

No debates about the need for fiber

Sometimes what's not said is more important than what is said. Day two covered FTTH rollouts in Singapore, Japan, China, Indonesia, Taiwan, South Korea, Malaysia, and New Zealand.

The words DSL, bonding, and vectoring were not mentioned. There were no debates around the need for fiber. There were discussions around FTTH pricing plans and decommissioning the copper plant.

FTTH service differentiation

In the wholesale-retail model, retail service providers must differentiate through service offerings rather than on basic FTTH network availability. Families seeking bandwidth, often referred to as bandwidth seekers, have choices regarding which service provider they choose.

Let's compare and contrast for a moment. In the US, a bandwidth seeker may have the choice between Verizon's FiOS and a cable operator such as Comcast. Or the bandwidth seeker may have a choice between a DSL-based network from AT&T and a cable operator. The evaluation of the service providers begins with evaluation of the different underlying networks.

Contrast this to the situation in Singapore, where the bandwidth seeker has a choice of services from multiple retailers where the underlying network is the same fiber. The evaluation is not around the medium but around the services running on top of the medium. Case in point: one retailer in Singapore is focusing on high-end gamers.

Planning for business services

This year, a number of presenters discussed FTTx network planning encompassing homes, enterprises, and mobile backhaul. FTTx PON has been supporting mobile traffic backhaul for many years, but this application is rapidly garnering attention with the onslaught of 3G, 4G LTE, and small cells. And while small cells will help relieve capacity constraints on macrocells, data traffic will still need to be backhauled.

Operators see FTTx for business services as a way to expand revenues, leading to faster network monetization. This led to discussions about whether operators might discriminate against residential subscribers if business services offer higher revenue streams. Certainly commissions such as the ACCC (Australian Competition and Consumer Commission) will keep an eye on this.

Looking back, looking ahead

The Council's conference continues to mirror the growth of FTTH in Asia-Pacific, moving from planning to implementation to operations to subscriber services. Asia-Pacific has reason to boast, given four countries with FTTx household penetration of 40% or higher.

Vodafone Ireland is posing a challenge to incumbent telco eircom with the launch of its fiber-based broadband service, offering consumers and businesses speeds of up to 70 Mbps. Beginning at €30 ($39) a month, eligible users can opt to purchase a standalone or bundled voice/data option.

The telco is offering three main options: Vodafone Simply Broadband, a standalone fiber-based broadband for €35 ($45); Vodafone Simply Talk with only voice is priced at €30 ($39); and Vodafone Home, which bundles broadband with voice calls and unlimited broadband usage, for €55 ($71).

Existing Vodafone customers can upgrade to the new service for free, while and existing mobile customers are eligible for various discounts.

Marcel de Groot, consumer director for Vodafone Ireland said a key premise of the new service is providing easy to understand plans for its customers.

“Keeping the plans simple allows the customer to be in control, choosing a plan that fits their needs without compromising on quality or speed,” he said.

Vodafone’s service follows eircom’s rollout of its new fiber-based broadband service last Friday, which is open to competitors including Vodafone Ireland.

The fiber-enabled speeds will be available to 300,000 homes and businesses in 11 areas: Clare, Donegal, Dublin, Galway, Limerick, Louth, Mayo, Meath, Sligo, Wexford and Wicklow.

BTOpenreach has this week dispatched one of its survey teams to begin preliminary work on their previously announced £3.7m project to divert two unused submarine fibre optic cables to the Isles of Scilly (here), which will support the rollout of superfast broadband (FTTC and FTTP) ISP products on the islands.

At present the islands 2,200 residents have to suffer a slow and inadequate Microwave radio line that connects to south west England via Lands End. By comparison the new network would cut two undersea fibre optic cables (previously used to connect the UK with Ireland and Spain) and move them to link the islands via different points on St Mary's. Both cables link back to separate parts of Cornwall, which is good for redundancy.

The effort is part of the wider £132m Superfast Cornwall scheme, which is supported by £78.5 million from BT and up to £53.5 million from the European Regional Development Fund (ERDF). It primarily aims to make superfast internet connectivity available to 95% of Cornwall’s local homes and businesses by the end of 2014.

It's understood that Openreach’s survey team, which will have a very tricky job, arrived this week on the freight ship Gry Maritha (this operates out of Penzance in Cornwall). Never the less Openreach still expects to connect the first customers via the new link during H1-2014.

eircom, Ireland's incumbent telco, has officially launched its new open access fiber-based broadband network, enabling speeds of up to 70 Mbps for, initially, more than 300,000 premises.

By the end of this year, the telco says its network footprint will include more than 600,000 premises and 1.2 million, or about 60 percent, of homes and businesses in Ireland by 2015.

The telco's FTTx network will leverage a mix of fiber to the cabinet (FTTC) with a hybrid fiber/copper VDSL2 connection and fiber to the premises (FTTP).

Herb Hribar, CEO of eircom said it "will continue to actively review its plans to expand the network beyond 1.2 million premises as far and as wide as commercially possible."

Over the FTTx network, eircom will offer consumers its set of eFibre products and bundles initially priced at €40 ($51) (promotional price for 6 months) for consumers and €24.79 ($32) for businesses. Besides data services, the telco is also trialing a new IPTV service, but has not given any firm date when it would be available.

In addition to selling to consumers and businesses directly, the last mile network will be open to other competitors that want to deliver services in its FTTx footprint.