Las Vegas–If the fiber-to-the-home (FTTH) crowd is looking to hit the jackpot, at least they know how to pick an appropriate venue for their annual confab.

Mirroring what was the largest group of exhibitors and registrants in this show's history, the number of FTTH network deployments and the subscribers who tap into them is also on the rise.

RVA Market Research, on behalf of the FTTH Council and Telecommunica-tions Industry Association (TIA), presented its annual FTTH deployment study, finding such networks passed more than 6 million homes in North America as of March 2006, up 50 percent from the previous year. RVA also found that more than 300,000 additional homes are being passed with fiber every month.

Figure 1
Figure 1: FTTH homes passed (cumulative–North America).

The number of "connected" homes and businesses, meanwhile, exceeded the 1 million mark (see charts for more detail).

In line with subscribers, the technologies that drive FTTH are also on a similar growth spurt. According to Infonetics Research, global equipment sales for EPON, GPON and BPON, which doubled between 2004 and 2005, are expected to jump to $3 billion in 2009, versus $565 million in 2005.

Infonetics also forecasts that the number of worldwide PON subs will leap from 4.1 million in 2005, to 38 million in 2009.

While PON-based technologies took center stage at this year's show, there was much less attention given to active Ethernet technologies, as well as one of its best examples–the muni-funded UTOPIA (Utah Telecommunications Open Infrastructure Agency) project.

Despite little to no fanfare about UTOPIA at the show, the project, interestingly enough, was covered the same week by Salt Lake City Weekly. The paper noted that UTOPIA's network reaches about 44,000 homes, but supports just 5,100 subscribers. Two years in, one-third of UTOPIA's network is built, the paper said. UTOPIA organizers, which are competing with incumbents Comcast and Qwest, are also trying to secure a new loan. The story's subhead ("Municipally funded fiber-optic network UTOPIA may be struggling, but its impact is growing") neatly summed up the situation for that project.

Japan FTTH powder keg is exploding

While Verizon has since usurped the FTTH throne here in the U.S., deployment of the technology is also surging in countries such as Japan.

Demand for higher levels of capacity for apps such as IP video has caused FTTH growth to far outstrip that of DSL in that market, said Hiromichi Shinohara, NTT's director of access network service systems labs, who keynoted the conference.

Shinohara said the Japanese market is presently comprised of roughly 14.5 million ADSL users and 6.31 million customers who get services from FTTH networks.

While there remains a wide gap between those groups, the latter is on a fast track to catch up. FTTH in Japan, he said, grew 85 percent in the last year, versus just 3 percent for ADSL. ADSL "stagnation," he said, was clearly present in Japan by the first quarter of 2005.

Much of that growth can be attributed to customer desire for the faster speeds required to handle bandwidth-intensive applications–including IP video–that are proliferating among Japanese consumers.

This request for higher speeds "opens the FTTH market," Shinohara said. Moreover, speed is driving the data side of FTTH, while competitive pricing is driving the voice side of the equation. Adding phone service to the service results in more attractive pricing to the mix, and marks the first "FTTH booster" in Japan, Shinohara explained.

Video services fed off the FTTH network will also play a key role in Japan, which is set to transition off analog broadcast signals by 2011. NTT presently uses an RF-based overlay to deliver broadcast TV channels, which deliver about 60 percent of the schedule in high definition, and uses IPTV to handle services such as video-on-demand and karaoke.

Figure 2
Figure 2: FTTH homes marketed (cumulative–North America).

FTTH with video will solve the coming "broadcast divide," Shinohara predicted.

J:COM, NTT's primary cable competitor, will also do its part to bridge that divide. J:COM presently serves north of 2.2 million subscribers and passes 8.1 million homes with service.

A panel of incumbent telcos also shed some light on how FTTH is making an impact in other parts of the world.

France Telecom, for example, is starting to invest in FTTH, starting with pilots in greenfields and then applying some attention to brownfields and MDU environments.

"The sun is rising in France in terms of FTTH," said France Telecom VP Gilles Coullon.

France Telecom, which today offers services to 11 million DSL subs and uses ADSL2+ to deliver video signals, launched a GPON-based FTTH trial in Paris that features two streams of HD video, a 100 Mbps Internet service and VoIP for about 70 euros per month (approx. US$88). Results of this trial, which will involve 1,000 customers by year-end, will largely determine how France Telecom moves forward with FTTH there in 2007, though the company expects to conduct a separate trial in Slovakia by the end of 2006, Coullon explained.

Although VDSL is an option for video, it suffers from QoS issues, Coullon said. (Note: chipmaker Ikanos Communications plans to remedy this with a new line of VDSL2 silicon.)

Verizon's busy video docket

Verizon has jotted down a lengthy video to-do list as the telco looks to enhance its FiOS product lineup in 2007.

Figure 3
Figure 3: FTTH homes connected (cumulative–North America).

Complementing its existing slate of MoCA-powered multi-room DVRs and "TV Widgets" applications (real-time local weather and traffic updates), Verizon has a 2007 video roadmap that will sprinkle in a "FiOS TV portal," enhanced television applications, local VOD content, on-demand advertising, and personalized play list capabilities.

On the latter, the telco will employ a new set-top-based search, according to another show keynoter, Robert Ingalls, Verizon's chief marketing officer.

On the VOD front, Verizon also expects to offer extras that are typically found on retail DVDs. SeaChange International, Verizon's primary VOD partner, has a "DVD on Demand" application, which is also available to the vendor's cable MSO customers.

While conceding Comcast Corp. is the VOD leader in terms of titles offered, Ingalls also paid the largest U.S. MSO somewhat of a backhanded compliment.

"It's not the number of titles; it's the quality of the content," he said, noting that Verizon today offers about 2,800 titles on-demand. Comcast of late has claimed to have a VOD library of more than 7,500 programs.

In a separate discussion with reporters and analysts, Ingalls addressed TV "place-shifting," a concept made popular by the Sling Media Slingbox. While it's clearly possible on a technical level, Verizon does not plan to offer such a service without proper DRM safeguards and authorization from its programming partners, Ingalls said.

In terms of high-speed data, Ingalls reiterated that Verizon's current BPON-based platform is capable of delivering high-speed Internet services on the order of 100 Mbps downstream, though the company presently markets a tier that only reaches as high as 50 Mbps. In FiOS pockets, cable operators such as Cablevision Systems Corp. have countered with 50 Mbps Internet services of their own. Competitive pressures in some of these markets could push cable operators to enlist DOCSIS channel bonding techniques to increase speeds even higher.

"We know we have to deliver a superior product," Ingalls said, adding later that Verizon, in what looks like a page from cable's PacketCable Multimedia (PCMM) playbook, is looking to offer bandwidth-on-demand services, as well, to customers who want a speed boost for activities such as movie downloads.

At the end of the second quarter of 2006, Verizon's fiber-fed FiOS network passed 4.4 million homes and businesses. The company already supplies FiOS-based Internet services to 725,000 customers. Verizon hopes to have 175,000 video subs by year-end.

Shelter from the 'IP storm'

Just piping video into an ONT port isn't as simple as it sounds, according to Stephen Davies of Titan ICT Consultants.

In fact, he recommends that providers leverage a unique port on the ONT to take in the video signal. To share video with data and other services on the same port can result in an "IP storm," causing performance problems for set-tops as well as PCs that just want to browse the Internet

Davies' suggestion? Use an ONT with four Ethernet ports–enough for each set-top in the house (in most cases), plus one left over for Internet and voice services. And in what is sure to upset some suppliers, he also suggested that these configurations not employ a gateway. If only one port is available and using a gateway is unavoidable, he suggests using a gateway that supports IGMP (Internet Group Management Protocol). While EPON networks are a "proven success" with IGMP in regions such as Asia, IGMP implementations over GPON are still unproven, and BPON networks offer little or no support for IGMP, Davies noted.

ONT vendors, however, are starting to outfit their equipment with additional Ethernet ports. Wave7 Optics, for example, offers two ports at a minimum, and products with four ports and as many as eight ports (for MDU installations) are on the horizon, said Jim Farmer, Wave7's CTO. To avoid potential IP storms, the rule-of-thumb for most providers is to use one port for IPTV, and the second port for data and VoIP, he said.

The importance of video

Given the name of the show, it's no surprise that when comparisons are made, it can be summed up as such: FTTH is good; copper-based is not as good in most situations.

But at least presenters offered some data to back up those claims.

Among them, Fujitsu offered an economic and performance analysis of FTTx vs. xDSL, concluding that xDSL technology likely won't have enough pop to handle coming HD and data demands. Even fiber-fed BPON architectures could buckle under the strain of IP-based video services.

At least 30 Mbps will be needed for the "triple play," and 100 Mbps or more will be required for emerging applications, explained William Yue of Fujitsu, who presented on the subject.

Although the initial cost for FTTH is high when compared to xDSL and fiber-to-the-curb (FTTC), FTTH stands to get a much better return on the investment, added Fujitsu's Sunan Han.

In a five-year forecast, they found that FTTP would cost $892.99 per home passed in the first year, versus $500 for FTTC, and $156 for ADSL, which leverages copper already in the ground. To actually connect customers to the service, Fujitsu, with certain assumptions and averages, estimated $745.99 per sub for FTTH, $385.94/sub for FTTC, and $117.81/sub for ADSL. Fujitsu did not evaluate VDSL2 for this particular study.

Getting a high rate of return, of course, depends on the number of services offered over those networks. With only high-speed data, the payback for FTTH is about 48 months, versus three years for FTTC, and just one year for ADSL.

But that changes substantially when video (via an overlay such as Verizon's, for example) is applied. With that added in, the payback for FTTH improves to 2.6 years, 2.3 years for FTTC and 1.5 years for ADSL.