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.

Chris Bonang
Despite FTTH's relatively minor appeal among incumbent cable operators, the technology is finding ways to grow in other areas. In-Stat MDR, a CED sister company, estimates that 2002 ended with 400,000 FTTH subscribers worldwide and about 50,000 in North America. While that might seem like chump change, it's a figure that's expected to rise considerably in the years to come. "Going outward from 2003 to 2006, we see a compound annual growth rate of 54 percent or so," says In-Stat MDR research analyst Melissa Phillips.

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.

Darryl Ponder
RBOCs, he predicts, will start to cozy up to FTTH technologies as cable operators achieve more success with their video, voice and data bundling strategies. "RBOCs lost lines last year...a third coming from the cable guys," Ponder says. "You'll see phone companies respond to that."

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., 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'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.


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.

FTTH showfloor
The first trade show dedicated to FTTH drew about 445 people, exceeding expectations.
That conference "was the first to be specifically designed with a fiber-to-the-home program," says Donna Keegan, executive director for the FTTH Council, which headed up the event. The show consisted of exhibits, general sessions, track sessions for technology and operations and case studies. The idea to create an FTTH-focused show was spawned last year as an element of the Council's intention to serve as the industry's beacon of education and promotion.

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."


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,"'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.


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).

DriTube Ribbon Cable
Sumitomo’s gel-free DriTube Ribbon Cable
Salt Lake City, home to the 2002 Winter Olympics, is currently investigating whether to participate in UTOPIA. "We're having discussions, and they may join in a few months," says Joel Sybrowsky, executive vice president for Dynamic City, the project's managing entity.

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.


Serving up water, electric...and broadband

Reedsburg, a historic town of 8,000 nestled just 50 miles outside of Madison, Wis., will be making some more history this month when its water and electric utility company begins offering broadband services off of a new fiber-to-the-home network.

The Reedsburg Utility Commission, which will use FTTH gear from Optical Solutions, expects to test services with about 25 to 50 customers by early this month, then follow with a commercial launch in March. If all goes as planned, the water and electric provider hopes to have the entire city built out with FTTH by the end of 2003.

Though Verizon is a stout voice competitor, "I'm not as nervous with them as I am with Charter [Communications]," the area's incumbent cable company, notes Reedsburg Utility Manager Dave Mikonowicz. "Charter's waiting for me to stumble just once coming out of the gate. That's why we want to make sure we've got our ducks in a row."

Like Charter, the Reedsburg Utility Commission doesn't have money to burn (as an enterprise fund, it's the city's largest taxpayer), so it's taking a success-based capital approach. In addition to the requisite pulling of fiber, the utility has "been putting in the NIDs (network interface devices) without the electronics to keep the costs down until we actually start to roll," Mikonowicz says.

The utility is planning to complement data and voice offerings with an IP-based video service. Getting that portion up and running has been more difficult than the voice and data, Mikonowicz says. To help out, the utility hired Cable Systems Services Inc. to design and build the headend and has joined the National Cable Television Cooperative to get palatable rates on programming and content.

SureWest: One thing at a time

One of the highest profile FTTH deployments today is in Sacramento, Calif. SureWest Communications acquired the assets of that system last year from bankrupt overbuilder WINfirst for cents on the dollar.

Today, that triple play network serves 5,660 customers and passes well over 45,000 homes. Tomorrow, the company intends to grow that network with additional fiber and extend it to cities within Sacramento County.

Because some of the network was under construction when it was purchased, SureWest officials aren't ready to disclose specifically what goals are expected to be met this year. But they do plan to "about double" what it has for both customers and homes passed.

Still, "part of the challenge since the [WINfirst] acquisition is trying to figure out what the real costs are," says Fred Arcuri, SureWest Broadband's senior vice president and COO.

Though SureWest plans to build out more areas of Sacramento with FTTH architecture, the company's Roseville Telephone sister company will likely look at VDSL and ADSL technologies for future IP-based video services offered via existing copper networks.

Primelink: Taking FTTH upstate

Primelink, a CLEC subsidiary of upstate New York-based Champlain Telephony Company, turned its first customers on to Optical Solutions' FTTH equipment last month, offering voice and data services to businesses in Plattsburgh, N.Y. The company hopes to extend those services to the residential sector in short order.

Primelink's service area includes a 5,000-home area that once served as an Air Force base. The entire area is undergoing a revitalization project designed to attract more commercial interest and tech-savvy residents.

Primelink, which competes with Verizon and Charter in Plattsburgh, is also mulling whether to add a video component to its fiber network over the next two or three years, says Trent Trahan, president and CEO of Primelink and Champlain Telephone.

"We think that fiber will give us a marketing edge and an advantage over the competition once they start offering some high-speed services," he says.