Light Reading
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OCTOBER 06, 2003 |
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TULSA,
Okla. -- As of October 2003, fiber-to-the-home is now available to 180,300
homes and has been connected to 64,700, according to Render, Vanderslice &
Associates, a market research firm that conducts an annual study of FTTH
deployments in North America using a census approach. Growth in those connected
with FTTH (fiber direct to the individual living unit) has been very strong,
even during a severe recession for the communications industry.
Historic
context illustrates the rapid pace of FTTH deployment. The first network to the
home, copper (telephone) began connecting homes in 1876, and took about 90
years to reach 90 percent of Americans. The highest year-to-year subscriber
growth rate was 75 percent in 1900. The second network, coax (cable TV), began
connecting homes in 1948, and took around 50 years to pass 90 percent of
Americans. The highest year-to-year subscriber growth was 130 percent in 1955.
The third network, optical fiber, became commercially viable in 1998. Growth in
subscribers has averaged 249 percent a year for the past two years. (For all
three networks, data for the first three years was excluded from comparison due
to the start-up small base values.)
Despite
strong growth, FTTH has expanded slower than was forecast last year due to the
delay of several large municipal builds. Growth, however, has been accelerating
in the latter part of 2003, and there appears to be an increasing number of
projects in feasibility and engineering stages.
According
to the research, FTTH projects are increasingly being selected after an
economic review of all “triple play” delivery options. Other FTTH deployments
have been driven by local visionaries who reported battling obstacles to get
them built. When interviewed, many of these pioneers spoke of their belief in a
future with FTTH handling ever-increasing bandwidth needs complete with
converged voice, video and data services, high definition television, more
robust Web sites, and various new applications. Besides entertainment, they
forecast new uses including more digital commuting, digital medicine, automated
meter reading, and video security. In fact, several unique applications have
been implemented in a few FTTH communities, including more video-based and
interactive on-line education from area colleges, and localized narrow-cast
video on demand such as local high school plays and sporting events.
The
current bandwidth capacity of FTTH systems depends on the architecture used.
Some of the FTTH communities already deliver as much as a gigabit of capacity
to the home. The majority of deployments might be described as being more
evolutionary in approach with current capacity exceeding hybrid fiber coax
systems and upgrades likely in the future. A vast majority of systems already
offer a triple play of voice, video, and data for one monthly price.
The
appeal of fiber, combined with higher Internet speeds and triple play
convenience, appears to be a marketable combination, with some competitive
providers reporting consumer take rates exceeding 90 percent. Take rates vary
significantly, however, based on service offerings, the degree of local
competition, and other factors.
Early
FTTH builds have been constructed by overbuilders, municipalities, public
utility districts, independent telephone companies, and new home developers.
Some of the large incumbent telephone companies are now planning deployments
and will likely become a significant factor in the next few years. While many
are building FTTH to deliver a full bundle of services, a few deployments use
fiber even when only one service is offered. Because of its long distance
carrying capacity, FTTH has also been used to connect homeowners in at least
one low-density area that had never before had landline telephone service.
Contrary
to popular opinion, there are far more homes passed by FTTH overbuilds than new
home “greenfields.” Though greenfields developers report the lowest
construction costs, they note that build outs take several years to complete.
Those building overbuilds report much lower construction costs than many
expect, with costs for underground drops usually well below $4 per foot.
While
passive architectures (PON) dominate in terms of the number of deployments,
active deployments have been larger on average, and the number of homes
connected via active systems nearly equals those connected via PON.
Render
Vanderslice & Associates