When it comes to fiber-to-the-home, the more things change, the more they seem to stay the same.
For starters, the same segments are deploying the technology on the same slow-but-sure path they were about 12 months ago. Most cable operators, meanwhile, still have very limited interest in FTTH because their existing hybrid fiber/coax networks are robust enough to accommodate the current lineup of digital services as well as newer, more bandwidth-intensive ones such as high-definition television and video-on-demand.
Still, the FTTH market, especially in the U.S., hasn't changed much in the last year.
"Municipalities and utilities are interested and making slow progress," says Chris Bonang, senior director of business development at Harmonic Inc. On the telco side, the smaller independent and competitive local exchange carriers remain the most apt to deploy FTTH. Bonang says he expects that to continue in 2003. "The RBOCs probably won't get into it until maybe 2004."
Most of the deployments for Optical Solutions Inc., a leading equipment provider in the FTTH category, are in North America. Though the majority of the company's 11,000 homes deployed are domestic, the company has seen some activity in Korea and China, says company Chairman and CEO Darryl Ponder. While most of those deployments involve smaller phone companies and utilities, Ponder expects one or more major telcos to issue a request for proposal for FTTH sometime this year.
For Alpharetta, Ga.-based Wave7 Optics, most FTTH transactions, as is true for most of the sector, have focused on utilities, municipalities and independent telephone companies. But that's on the residential home side of the broadband fence. On the commercial and multi-dwelling unit front, Wave7 has found that cable operators have a keen interest in plugging fiber directly into small- and medium-sized businesses and apartment buildings, says Wave7 Optics Chief Marketing Officer Emmanuel Vella.
"The strength of our architecture is that it can be applied to residential, commercial or MDU [environments]," he adds. "Cable companies are looking [at our technology] for MDU and commercial deployments."
Wave7–which touts 15 "customer applications," the majority of them actual deployments–is currently working with companies such as Indiana's Hancock Telecom and IlliCom Telecommunications subsidiary Conxxus LLC. Wave7 gear is also being deployed by three of the top five MSOs, but the company is not at liberty to disclose details about those deployments, Vella says.
C-COR.net, which traditionally supplies broadband gear, software and construction services to cable operators, is following FTTH developments very closely. "The plan is to offer equipment, construction and support services for FTTH that will evolve over time," says Bill Dawson, director of technical marketing engineering for C-COR.net's broadband communication products division. The reason for that is a pretty good one, he says. Cable operators are starting to make inquiries based on legitimate motivations rather than just to peek at what their potential FTTH competition might be up to.
Scientific-Atlanta, an FTTH Council member, represents another traditional cable equipment company keeping a close eye on FTTH activity. Because FTTH is best set for greenfield environments, "our motivation is for the international marketplace, where infrastructures are not in place," says Tony Stanley, director of advanced access architectures at Scientific-Atlanta's transmission network services group.RITE OF PASSAGE: THE FIRST TRADE SHOW
Although FTTH is not even close to hitting huge numbers, the sector did have a watershed moment last October when the first trade show dedicated to the technology was held in New Orleans.
The first trade show dedicated to FTTH drew about 445 people, exceeding expectations.
At 445 people on site, the show's attendance exceeded the FTTH Council's expectations, Keegan says. Based on a pre-registration report, seven percent were from a local exchange company and four percent represented utility companies. Perhaps surprisingly, cable television-related visitors represented 10 percent of the people on site. Based on the first year, the FTTH Council plans to make the confab an annual event, but has yet to release details on the venue or proposed dates.
"I thought [the 2002 show] was a great forum from two perspectives," Wave7's Vella says. In addition to showcasing the company's wares, "we were able to educate customers on FTTH and eliminate myths on economics."ECONOMIC IMPACT
High equipment and construction costs have long been a barrier for FTTH, running into the multiple thousands of dollars per connected home. But, thanks to higher volumes, cheaper equipment and more efficient field operations, those costs are closing fast on–or nearly on par with–advanced HFC architectures, industry experts say.
"The economics [of FTTH] are slowly improving," Harmonic's Bonang says. But those improvements are evolutionary, rather than revolutionary, he adds. FTTH expense figures per connected home typically hit about $1,000 for gear and about the same for installation. "If you can't get below that, then forget about it," Bonang acknowledges. "Equipment costs are coming down, but it's the installation costs that are difficult to rein in."
"Current FTTH systems are being built in the $1,800 per home range, which for a video, data and voice system, is still 20 to 40 percent higher than new HFC construction projects," says S-A's Stanley.
Wave7's Ethernet-based approach is "cost-competitive" with advanced HFC, in the range of $1,500 per home connected, a figure that includes fiber, electronics and labor, Vella says.
"In selective scenarios, [FTTH and advanced HFC costs] can be on par," C-COR.net's Dawson says. "But when the equipment cost is less than the construction cost, then the increment can be acceptable."
Still, costs remain a matter of mass and architectures. "FTTH can compete with twisted pair on similar volumes," Optical Solutions' Ponder says. "Small to medium volumes are in the range of $1,500 to $3,000 per home, depending on whether the network is aerial or buried, open or urban. Most of that delta is taken out of the installation, not the cost of the electronics."
Though FTTH has yet to mature into a cash cow for vendors, that hasn't stopped makers of the fiber itself from finding ways to cut costs. In fact, the newer cable designs can reduce field deployment costs, notes Bill Beasley, director of product management for Sumitomo Electric Lightwave's communication networks group.
A line of ribbon-style cables that Sumitomo introduced in mid-2002, for example, eliminates the jelly found in a traditional buffer tube, a practice that cuts back on the clean and prep time for field technicians. Sumitomo claims that the product, dubbed the DriTube Ribbon Cable, can reduce cable prep time and labor costs by more than 50 percent.A FIBER UTOPIA?
Although there are a handful of FTTH case studies sprinkled herein, the big daddy of them all remains a case study in the making.
In Utah, an FTTH/FTTB project dubbed UTOPIA (Utah Telecommunications Open Infrastructure Agency) is presently underway. The project has the backing of 17 member cities that represent an aggregate 520,000 people, 170,000 households and more than 20,000 businesses. Population-wise, those cities range from West Valley City (109,000) and Orem (84,000) to Cedar Hills (3,094) and Perry (2,383).
Sumitomo’s gel-free DriTube Ribbon Cable
Considering that recent research indicates that fewer than 25,000 homes in the U.S. and Canada presently receive service from a fiber-to-the-home network, the UTOPIA project in Utah, where AT&T Broadband (now part of Comcast) is the primary cable MSO, is expected to become FTTH's first poster child.
UTOPIA, formed as a political subdivision of the state in March 2002, plans to construct a publicly-owned fiber network that will operate as an Open Service Provider Network, or OSPN, that grants "equal access to all private service providers interested in using the network to provide services to the community."
Instead of taking the wholesale model, UTOPIA's role will be as a wholesale transport service. In turn, each service provider that taps the network will sell, market and bill for services. Sybrowsky says discussions with potential service and content providers are well under way, but isn't at liberty to disclose them yet.
"We believe we'll have service providers under contract by March; that's the goal," he says. "Four or five months ago we were contacting the service and content providers. Now, they're calling us."
The price tag for UTOPIA is expected to approach $400 million. The first segment of that funding, between $30 million to $50 million, will be enough to build out at least the first three cities tagged for the UTOPIA network: Murray City, Orem and Layton.
That funding could be secured as early as mid-year. "We'd like to have the financing nailed down and received by June. Construction would start soon after," Sybrowsky says, noting that Dynamic City expects to issue RFPs (request for proposals) sometime this month.
Though the UTOPIA project is still in its "embryonic" stages, "we think we're on the cusp of something very, very big," Sybrowsky says.