Considered a pipe dream just a few years ago, fiber-to-the-home suddenly has wheels , and it’s finally making deliveries

While scientists and commentators are marveling at the recent success in mapping the vast complexities of the human genome, a small, but growing number of broadband service providers are taking a fresh look at the minute details of a delivery platform that was once considered pure fantasy.

Like many other broadband technological developments before it (e.g., cable TV, interactive TV, high-speed Internet access, etc.), fiber-to-the-home (FTTH) has begun its initial slow rollout onto Main Street North America, both literally and figuratively. It may not be all that long before it really picks up speed and shows up in a neighborhood near you.


"If you think about it from a network architecture point-of-view" says Paul Connolly, vice president marketing and network architectures for Scientific-Atlanta, "it's the right answer. What's the right node size? The node size of one.

"The real question is, how much bandwidth do customers need? And you get to the point where the only way to deliver enough bandwidth is fiber-to-the home. The real question is, when is that? When do the customers need it?"

Presto! Change-o?

Things are happening so fast, says John Gibbs, director of access systems product marketing for Marconi Communications, that many don't realize that FTTH has even become a viable option. While it's general knowledge that the cost of fiber components and electronics has steadily decreased, many haven't made the connection between those cost reductions and the renewed interest in the last-mile fiber solution.


Gibbs says there "really weren't any (end-to-end) systems available until six or eight months ago. Now, there are a few companies in the FTTH space that are actually able to offer a complete package." In fact, he believes strongly that FTTH has some strong parallels to a couple of other recent "breakout" broadband technologies.

"A year ago," says Gibbs, "I would have said fiber-to-the-home is where DSL was three years ago. I'm still sticking to that curve. I think we're where DSL and cable modems were two years ago."

What's brought on this renewed focus on fiber-to-the home? It depends on whom you ask.

At one end of the FTTH spectrum, the recent economic slowdown, says Chris Bonang, senior director of market development for Harmonic, seems to have dampened some fiber appetites.


"There was more momentum behind fiber-to-the home six months ago," says Bonang. But now, he says, FTTH proponents are having problems finding financing, so "they're either disappearing, or they're scaling back their aggressive plans which formerly included going to fiber-to-the home."

Bonang says there is still considerable interest among the RBOCs (Regional Bell Operating Companies), but "it's only when they have to repair or replace existing copper or do newbuilds" that they're considering deeper fiber runs.

At the other end of the FTTH spectrum, there are people like Bob Lund, chief technical officer for Optical Solutions Inc., who believe that the need to future-proof networks will outweigh temporary economic hiccups.


In the beginning, says Lund, fiber-to-the-home trials weren't really targeted well. "There have been fiber-to-the home trials and experiments for virtually all of my career," says Lund. "They came up with some interesting solutions, but unfortunately, they've been way too expensive, and they haven't really been targeted at delivering services that people are going to pay for."

Those early trials (which took place about 10 years ago), he says, while both expensive and successful, delivered 10 Mbps to the side of the house. But "the question arose, what were people going to do with all that capacity then?"

Recently, he notes that component pricing for the active transceivers, fiber construction practices and the pricing for the passives "have been coming down quite dramatically over the past couple of years."

But, even more important, "is that there are a lot of new players who aren't in a position to continue leveraging something and eking out incremental revenues. They're looking to put something new in the ground that will keep them competitive five, 10 or 15 years from now. As a result, that perspective really makes people want to lean toward a fiber-based solution."

How much is that fiber in the window?

There are some in the FTTH space who believe the falling costs of equipment and electronics in fiber optics will soon make fiber-to-the home competitive with more popular transport systems, if it hasn't done so already.

At an analyst's conference last fall, Gibbs and Rick Hoffman, director of transmission and future technology at Verizon Communications, made their case that the cost of deploying FTTH was fast approaching that of copper deployment. Hoffman said his company's decision to deploy fiber-to-the-home included advances in aerial fusion splicing, self-supporting fiber cable and fiber drops, lower fiber cable prices and Bell Atlantic's passive optical network (PON) architecture in one fiber.

Gibbs presented a cost comparison for a three-year buildout of a new residential housing development that pitted a digital loop carrier/copper with DSLAM scheme against a fiber-to-the-home plan. Hoffman did the same, says Gibbs, but his model assumed that the power company was digging the ditches for its lines, and the telephone company could piggy-back on that effort to put in its fiber. However, Gibbs' comparison (see Figure 1, page 30) tacked on an additional $100 trenching cost. Either way, the costs have gotten so competitive, that they both believe service providers owe it to themselves to fully investigate FTTH scenarios.

Home sweet home

Despite the continuing debate on deployment costs, overall practicality and the country's general economic health, FTTH is establishing a beachhead in North America. While some bigger telcos and competitive service providers like WinFirst are making headlines with their fiber overbuilding plans in major metro areas, a number of rural telephone companies and cooperatives, as well as some public utility districts, are taking FTTH very seriously indeed.

Figure 1: Residential cost comparison.

Money to fund an FTTH buildout hasn't been a very big problem for the Utility District of Grant County in eastern Washington state. Controlling a couple of big dams on the Columbia River does have its advantages, says John Moore, senior telecommunications engineer for the district. "We make so much money off selling surplus power to California, that it's funding our fiber project," says Moore.

He says he had a "customer groundswell of enthusiasm about doing some kind of high-speed data service to homes in Grant County." With that kind of customer support, the district started looking at the various solutions for broadband access and services.

"We finally came to the conclusion that we didn't want to stop somewhere in the middle," says Moore. "We'd rather go to what we think is the long-term, best deal for the customer, which is high-speed fiber to the house."

After considerable work, Moore says the company came up with a business plan for the non-profit, public organization that predicts it will take 18 years to recover the investment. "We are used to making 30-year investments in power plants, and 40- and 50-year investments in transformers and poles and things like that. So that didn't seem beyond the pale," says Moore. The plan includes the replacement of electronics every seven years or so, and roughly a 20-year life on the fiber.

The plan takes 800 Mbps ports to each house via World Wide Packets' electronics box, which presently has a price tag of about $1,200 per box. With expectations of serving 20,000 customers out of a base of 40,000 customers, Moore believes those costs will decline eventually.

The District charges a one-time $300 connection fee and $40 a month for access to the fiber. That can be a difficult sell, says Moore. "The idea is that you get a package deal here that is really quite good. For instance, our Internet service on the system is $9. That's 100 Mbps for $9, once you pay the $40 a month charge. It's much better than DSL or ISDN. But in rural America, people don't know what that is, because they've never seen it. They have nothing to compare it with."

Optical Solutions’ Universal Demarcation Point (UPD) delivers up to six POTS lines, two-way 
analog/digital video, and scalable high-speed data.

At this point, says Moore, the system has passed roughly 600 to 800 homes, with a target of going by 10,000 homes and businesses and having 2,000 customers on the system by the end of this year. High-speed data is up and running, with voice-over-IP telephony slated for a start at the end of February, and video launching in mid-spring.

Meanwhile, two rural telephone companies are forging ahead with their FTTH systems as well. The Huxley Cooperative Telephone Company in central Iowa has just launched its fiber-to-the home service. Another desire for cable TV spurred this FTTH foray, says Bill Hotchkiss, general manager.

"When we started looking around," says Hotchkiss, "considering what it takes to run coax and put in all the amplifiers and all of that stuff, we decided to take a look at FTTH and see if that might be an option. The more we looked at it, the better it looked."

If the initial launch succeeds, says Hotchkiss, Huxley will do fiber-to-the- home to all new developments. Retrofits, he says, will be done on an "as needed basis, or as demand moves to the point where we're not capable of providing what people are asking for on twisted pair or coax."

A somewhat more mature deployment is taking place in nearby Minnesota. The Federated Telephone Company has been working with Optical Solutions Inc. since it first began developing a FTTH solution in 1997. The motivation for a fiber-to-the-home approach, says Kevin Beyer, general manager, centered around two things.

First, the company was in the position where it had to start replacing a lot of its buried facilities. Second, it wanted to start a CLEC in a nearby community and knew it would have to do a complete overbuild. "Plus," says Beyer, "we didn't want to have to rebuild or rip up any streets, roads or yards more than once. So, in both cases, we came to the conclusion that we wanted to put fiber in the ground."

When it's all said and done, there will be about 3,000 homes passed in three communities. The buildout is scheduled to be completed by January 1, 2005. The advantages of an FTTH system, says Beyer, come down to what's commonly called an FTTH detriment–costs.

While the U.S. market for installing new fiber in access
networks will more than double in the next four years, the
market for FTTH fiber will increase more than twenty-fold during the same period.

"First of all," says Beyer, "it's a totally passive network out there, so you've got nothing out in the field except on the side of the building, which helps reduce costs.

"Second of all, you don't have to populate or spend the money for the electronics on the side of the building unless the customer takes the service. And that helps you manage the revenue streams against your capital expenditures."

Fiber is the future

Being off of the telecommunications beaten path seems to sharpen the vision of those, like Beyer, who serve a close-knit, but often far-flung customer base. Service providers in rural America seem to have the clarity of future sight that their big city cousins don't. But both share a common foe–time.

"I think what you're seeing," says Beyer, "is a rural group of companies that are saying our communities are going to live and die based on the telecommunications services they have. And on the flip side of that, is if these communities don't survive, we'll die as well.

"So, we're working together to make sure it's all in place. That matters to us, and the bottom line matters as well. But, we're willing to go through some lean years here when we know all the services aren't going to be paid for right away. We're doing that in order to get to the point where we're not behind the eight ball five years from now.

"Our customers are asking us to give them the services they want, and don't make it too expensive. We're telling them we can do that, but they have to realize the bottom line of the company they own is not going to be as good as it's been. And they say, 'Well, just don't make it negative.' And we can do that."