providers moving forward.

Transcription

1

2 Over the past decade, fiber optic cable, once used only for long-haul communications, has been extended all the way to end users premises. Today, fiber to the home (FTTH) is a mature, proven technology, and with costs that are comparable to and even below those of old copper technologies, it is certain to be the technology of choice for service providers moving forward. In the United States, FTTH is available to about one home in five. In countries such as Japan, Korea, Denmark and Sweden, the figure is closer to four out of five. Due to vast gains in available bandwidth, reliability and security gains that spur economic growth and enable new services for telehealth, distance learning, cloud computing and more these nations have committed to deploying fiber on a broad scale. In 2010 alone, fiber-fed home businesses sustained 700,000 jobs mostly new jobs in a poor U.S. economy. Fiber deployments stimulated investment and economic growth in communities across the country, and stimulus funding established the promise of further expansion in the coming years. The details are in this publication, which gives network builders, real estate developers and managers, and government officials an overview of the power of fiber optics and the benefits it delivers to communities. It makes the business and environmental case for fiber to the home, as well. For more information, please visit We call fiber the Light Fantastic. When you ve read this primer, you ll see the light! Daniel O Connell President FTTH Council North America 2 The Advantages of Optical Access FTTH Council

3 Contents Reliability... Bandwidth... Affordability... Future-Proofing... Standards... Security... Economic Development... Sustainability... New Broadband Content & Services... Higher Revenue... Fiber to the Home: Pathway to Ultra-Broadband Fiber and Bandwidth Applications for FTTH Providers: Beyond The Triple Play Fiber: The Light Fantastic Telehealth: The Time is Now FTTH Aids Sustainability Builders, Real Estate Developers and FTTH Questions Real Estate Developers Ask About FTTH Beating the Recession with Fiber: Three Case Studies Focus on Municipal Priorities Key Questions Municipal Officials Ask FTTH Success Stories Introducing 1 Gbps to the Home Understanding Fiber Network Architectures FTTH Council Certification Program This primer was originally written by Steven S. Ross and updated by him and by Masha Zager, both of the Broadband Properties staff. It summarizes research commissioned by the FTTH Council as well as independent reporting by the authors and by BBP contributing editor Joe Bousquin. Local Economic Impact of FTTH Noted by FTTH Providers Large business development Work from home/soho expansion Business efficiency Rural growth/agricultural efficiency Quality of life (services, home education ) Construction stimulus Residential growth 8% 6% 5% 3% 3% 22% 42% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% FTTH providers notice significant economic impacts borne by fiber; 42 percent specifically cited expansions or establishment of large businesses. Source: RVA LLC. FTTH Council The Advantages of Optical Access 3

4 Fiber to the home: Pathway to Ultra-Broadband The number of Internet-connected devices in the home will grow from 2 billion today to 10 billion in 2015, says Pyramid Research. Only FTTH can meet this demand for in-home bandwidth. Fiber to the home (FTTH) has become the leading technology for next-generation communications networks worldwide. On every continent, telecom providers are building FTTH networks to replace legacy copper networks that are running out of headroom to support the demand for communications services. Because governments view fiber as critical national infrastructure, many have developed national broadband plans to encourage the buildout of fiber. Already, fiber reaches at least 200 million homes globally a tenth of all the households in the world and an estimated 62 million households subscribe to fiber-based services, including voice, video, data and more. In the United States, fiber reaches 20 million homes; half of those now have direct fiber optic connections, as do 17 million homes in Japan, more than 12 million in Korea and 8 million more in Europe. These numbers continue to grow exponentially. China alone expects to have 100 million fiber subscribers by Providers and governments around the world all agree fiber to the home is the endgame for communications infrastructure. No alternative infrastructure is even a contender (although wireless networks are being integrated with FTTH more on that later), and everyone agrees that fiber will meet the world s needs for the foreseeable future. The only debates involve the speed of the transition. Why Fiber? The reason for this striking degree of unanimity is simple: FTTH offers far more bandwidth, reliability, flexibility, security and longer economic life than alternative technologies, even though its price is comparable. It is also less expensive to operate and maintain than copper. Because of these advantages, FTTH can support many more communications services than legacy infrastructures, including newly emerging services such as health care and cloud computing. Fiber s reliability and security are particularly critical for such new services as telehealth and telepresence. FTTH also allows network operators to derive more revenues from today s communications services. FTTH subscribers today often spend 30 to 40 percent more per month than DSL subscribers not because basic services are more expensive (they aren t), but because more and better premium services are available. For example, multiple simultaneous HD channels are difficult to implement well over any medium but fiber; 3D TV and high-definition video communications are even more challenging. At the end of 2010, Verizon, thanks to its all-fiber FiOS network, was within 4 The Advantages of Optical Access FTTH Council

5 Fiber duct being laid in Chennai, India. a few cents per month of the highest average monthly customer revenue of any large network provider on Earth. Because other media have inherently limited capacity, tweaking more bandwidth from them becomes increasingly difficult and expensive as time goes on. This isn t true of optical fiber, whose capacity is effectively unlimited. Fiber can handle any bandwidth demand with ease. In fact, one bundle of fiber cable not much thicker than a pencil can carry all of the world s current communications traffic. The technologies for transmitting data over fiber are well understood, and the upgrade path for the electronic components that send and receive signals has been defined for years into the future. If anything, increasing fiber bandwidth will become less expensive rather than more expensive. grading existing properties. Larger telcos are deploying fiber in cities and suburbs, and smaller telcos in rural areas. Cable providers use fiber to compete for lucrative commercial-services business. Even some small electric companies have extended the fiber networks they use to manage their own facilities to serve their customers as well. Who s Building FTTH? By our count, well over 700 network operators have already deployed FTTH in the United States. Even in a down economy, most developers put fiber into new properties and many are upand municipal buildings. In 2010, when Google announced that it planned to build one or more community fiber networks, more than 1,100 local governments proposed their communities as suitable locations. (In March 2011, Google selected Kansas City, Kan., for its initial fiber deployment.) Adding Value to Properties Access to utilities makes private property more valuable. A house is worth much more if it has access to a public Telepresence is one of the advanced applications that depends on a high-bandwidth, high-reliability network. In this photo, the people on the far side of the table are actually sitting in a remote office, but can interact with the local group as if they were physically present. Municipalities are attracted to FTTH because it positions their communities for tomorrow s jobs and economic growth. Nearly 100 localities have built or are building fiber networks to serve residents or businesses; hundreds more have fiber to schools street, water and sewer services, public schools and other utilities than if it does not. In the same way, FTTH adds value to properties. Fiber connections make single-family homes easier to sell and multiple dwelling units easier to rent. Renters and buyers know they can get the most attractive services available on the market today and that if an exciting new service is introduced in a few years, they ll be prepared for that as well. This publication explores these issues, and more, in detail. It s written in nontechnical language so you can understand the value of next-generation infrastructure and what it means to you without a degree in optical engineering. We want to communicate... The Advantages of Fiber to the Home. FTTH Council The Advantages of Optical Access 5

6 Fiber and Bandwidth Q: What is bandwidth? A: In a network, bandwidth (what engineers call bitrate) is the ability to carry information. The more bandwidth a network has, the more information it can carry in a given amount of time. Networks with high bandwidth also tend to be more reliable because fewer bottlenecks disturb the flow of information. Q: How much bandwidth or information delivered by bandwidth do we need? A: A standard-definition television signal requires a bandwidth of about 2 Mbps two million bits (zeros and ones) per second. HDTV requires as little as 2.5 Mbps if the image is rather static a person being interviewed, for instance. But fast action, such as in some sporting events, requires more as much as 8 Mbps, even with new compression technology such as MPEG-4. Now, full-frame 3D is hot. While it can be delivered at 2.5 to 3 Mbps, a high-quality experience requires closer to 5 Mbps. 3D immersive HDTV a technology already being used in some academic and industrial settings will require between 50 and 300 Mbps. Q: What about data? A: Bandwidth requirements for many kinds of data are exploding. For example, the digital cameras that consumers buy can create larger and larger images. In health care, the medical images produced by equipment such as CT scanners are orders of magnitude larger than camera images a hundred times larger, and more. The biggest growth in data transmission has been for video, and this trend is expected to continue at least for the rest of this decade. Video requires not only extra bandwidth but also extra reliability. The smallest delay in data transmission can result in distorted views. Q: Can t copper carry high bandwidth? A: Yes, copper can support high bandwidth, but only for a few hundred yards. The longer the signal travels on copper, the lower the bandwidth. Optical fiber is unique in that it can carry high-bandwidth signals over enormous distances. Fiber uses laser light to carry signals. Under some circumstances, a signal can travel 40 miles (60 kilometers) without degrading enough to keep it from being received. Another difference is that fiber is better able to support upstream bandwidth that is, from the user out to the network. High upstream bandwidth is important for video communication and for many business applications. Q: What exactly makes fiber future proof? A: The equipment necessary to send light signals keeps getting better. So equipping an existing fiber network with newer electronics and with lasers that pulse light faster, or lasers using different wavelengths of light, can vastly increase available bandwidth without changing the fiber itself. The new electronics are very cheap compared with the original cost of laying the fiber. Therefore, once fiber has been deployed, network operators can keep increasing bandwidth at very little cost. Q: How long has fiber optic technology been in use? A: Fiber optic cable has actually been used in communications networks for more than 30 years. Fiber first delivered a signal directly to an American home (in Hunter s Creek, Fla.) more than 20 years ago. Before that, fiber was and still is relied upon to carry communications traffic from city to city or country to country. The first trans-atlantic fiber cable was laid in Almost every country on earth has some fiber, delivering services reliably and inexpensively. Q: All providers seem to claim they have fiber networks. What s different about fiber to the home? A: Don t be fooled! It is true that most cable and DSL networks use fiber. In these networks, the fiber carries the signal close enough to a home so that copper can carry it the rest of the way. However, this approach requires expensive, difficult-tomaintain electronics at the point where the fiber meets the copper. The available bandwidth is far less than an all-fiber network. And these halfway approaches do not allow symmetrical bandwidth existing cable and DSL systems can download much faster than they can upload information. Q: Isn t that good enough? A: That depends on what you want to use your bandwidth for. If all you want is to send s, download songs or share family photos, the bandwidth provided by today s cable modems and DSL lines may be good enough. If you want to log on to the corporate LAN from home and work effectively, you ll need more. And what about uploading a high-def video of the school play, or sitting down to dinner with family members a thousand miles away? Q: Why does it matter how close to the home fiber comes in DSL and cable systems? A: With copper cable, there is a marked relationship between distance and available bandwidth. For example, the latest commercial versions of DSL can carry a signal of more than 200 Mbps for about 750 feet. Over a distance of a mile, DSL can deliver only about 30 Mbps. That s the theoretical limit. In practice, the real bandwidth is less. Q: With cable and DSL, there s often a difference between advertised 6 The Advantages of Optical Access FTTH Council

7 Source: BBP LLC and actual bandwidth. Is that true for fiber? A: Cable, DSL and even wireless networks are usually more heavily oversubscribed than fiber that is, providers promise users more than the total amount of available bandwidth because they know all users aren t going full throttle most of the time. As a result, copper-based networks slow down during periods of heavy use such as when teenagers come home from school. Fiber has enough bandwidth that providers can guarantee high speeds with little or no oversubscription. If a fiber network is designed properly, users will always get the speeds that are advertised. The Federal Communications Commission now insists that carriers deliver the bandwidth they advertise. Q: Is FTTH technology expensive? A: In new construction, fiber costs about the same as copper to build, and it costs much less to operate and maintain. Building fiber to the home is expensive only when compared with not building anything that is, with adding new electronics to an existing copper network or building fiber only part of the way to the home. The problem is that these less-expensive (2011) 1+ Gbps Fiber per User, and Growing Visualizing Fiber-Borne Bandwidth Bandwidth Comparisons 64 Kbps: Phone Line 1+ Gbps Fiber per User, and Growing (2011) Today, fiber s bandwidth is orders of magnitude bigger than other technologies. As the new generation of 10 Gbps equipment is deployed, the fiber circle will move off the page. 128 Kbps: ISDN 1.5 Mbps for a T1 Line 100 Mbps: DSL maximum per user with latest technology 20 Mbps: Wireless maximum per user with latest technology Only the Beginning In a few years, even 1 Gbps will look small. Soon, most content will be 3D and ultra-high-definition. User, and Growing 1+ Gbps Fiber per (2011) 160 Mbps: Cable maximum per user with latest technology User, and Growing 1+ Gbps Fiber per (2011) FTTH Council The Advantages of Optical Access 7

8 solutions don t always meet users needs. In the last few years, the flood of video content has outrun the ability of older technologies to handle bandwidth demands. Providers are shutting off or slowing down service or imposing prohibitive fees for customers who exceed monthly bandwidth caps. Customers don t like these restrictions, and they don t appreciate being called bandwidth hogs for using services they have paid for. In addition, it s not clear that providers save money by failing to meet users needs, because limiting bandwidth means limiting revenue potential as well. The Inevitability of Bandwidth Growth Increased bandwidth lets us do familiar things faster. Send an . View a website. But its real value is that it lets us do entirely new things with our computers, cameras, televisions with our network. Today, the network is often called the cloud, which is a way of saying, I don t even have to think about where data is stored or where processing is happening. Things we talk about in everyday conversation today would have been bewildering a decade ago. In the past few years, we have seen such dazzling innovations as Tablet computers for easy access to games, ebooks, TV programs, , shopping, banking and an everexpanding suite of new apps. Smartphones that aren t just for mobility anymore but are increasingly used for personal media consumption in the home. Internet-connected televisions, radios, set-top boxes, Blu-ray Disc players, cameras and picture frames that receive or deliver movies, TV and photos via the Web. Voice over Internet Protocol telephones that direct incoming callers to any line and take messages in text and video as well as voice. Social media that keeps people continuously in touch and up to date who needs phone calls anymore? Two-way video communication whose quality is good enough to bring the illusion of being there to teleconferencing. It s called telepresence. Highdefinition video communication has even reached the home market; telecommuting workers can send telepresence robots in their offices to sit in for them at meetings while they watch from their home TVs. Easy distribution of user-created video that lets grandparents see children, musicians develop audiences and manufacturers demonstrate new products. Digital media lockers that let consumers store music, TV, videos and services in the cloud and access them from many devices. Telehealth devices and applications that bring medical services to remote areas and to the homebound elderly. YouTube appeared in February 2005 and quickly became one of the five largest users of bandwidth on earth and the largest single user of Internet bandwidth. The social networking platform Facebook, the world s most visited site, has more than 600 million active users who share photos and videos, play games and use half a million other embedded applications. The least expensive netbooks today come with 160 GB hard drives, because users need the file space. And if they need the file space, they also need to transmit large files and back them up online. Users become annoyed when network speeds lag behind local connection speeds and USB transfer rates have now reached 5 Gbps. Internet-connected TV sets and set-top boxes let viewers watch high-definition online video on the big screen as easily as they can watch video from the local cable or phone company. Users don t have to think Internet to put Internet video on the TV. They just check out what s available, using their TV remotes. Internet-capable TV models are today s standard offering. New services let people access health care and take classes from their homes. With home automation, residents can take care of their homes while they re away, using Internet- connected security cameras and remote energy monitoring devices. Telecommuting and home-based businesses are on the rise, too. In October 2010, market researcher Michael Render reported that new businesses created by fiber-connected residential users had pumped more than $40 billion into the economy in just the previous 12 months, the largest source of new jobs in Owners and managers of multifamily communities are turning social rooms into fiber-connected business centers and concierge offices. We have every reason to believe that innovation will continue, that bandwidth needs will keep on growing and that only fiber to the home, with its superior reliability and plentiful upstream capacity, will be able to keep delivering the bandwidth we need. 8 The Advantages of Optical Access FTTH Council

9 Applications for FTTH Providers: Beyond The Triple Play A decade ago, cable companies introduced the triple play of voice, video and data that has now become the standard telecom offering worldwide. But fiber s greater bandwidth and reliability gives FTTH providers the option to think beyond the triple play and offer multiplay services tailored to the needs of particular communities. Fortunately, new broadband applications become available every day, and many of them create opportunities for use or resale by fiber providers. These new applications fall into several categories. Some help differentiate fiber-to-the-home communities; some generate additional revenue streams for providers or help retain customers; still others can be used by providers or property developers to manage their assets more efficiently. Many do all three. Differentiating A Community Fiber has become the norm in new developments, especially in new masterplanned communities, according to market researcher Mike Render. In order to further differentiate their communities, developers are now seeking applications to leverage their fiber infrastructure. Telehealth gives residents instant access to medical specialists via videoconferencing from the home, the fitness center or the community room. The videoconferencing may be integrated with Internet-enabled diagnostic devices (blood pressure cuffs, respiration measurement, etc.), electronic medical records systems, online prescription services and online appointment scheduling. Telehealth helps keep older adults living independently longer, and it is a boon for members of the sandwich generation, who are responsible for caring for both their children and their elders. Social applications use the fiber infrastructure to build a sense of community. They range from social networking sites focused on the community, to intranet sites featuring local news and events, to Web-based or IPTV video channels broadcasting local athletic contests, artistic productions and political discussions. Because these offerings can be interactive, they easily trump conventional public access stations on cable. Home-automation and concierge services, such as Verizon Concierge, take advantage of the fiber network within a community to make residents lives comfortable and convenient. Cameras that recognize residents cars entering the community can alert parking attendants and security personnel and then turn on lights and heating or air conditioning at home. Residents can connect with Online face-to-face healthcare Very large HDD with super resolution One device for TV, Internet, & phone Advanced online shopping Two-way video calling Remote home and pet monitoring Advanced websites/full video Business video conferencing 3D TV Advanced online college one click to community services or schedule a dry-cleaning pickup, pizza delivery or home repair. These applications can also help owners control energy use. Mobility is easier to accommodate with a robust fiber-to-the-home network. Using the backhaul afforded by FTTH, providers can offer Wi-Fi connections to residents in indoor and outdoor public spaces throughout a community. Residents can bring their laptops or tablets to the pool, check from the laundry room or listen to Internet radios in the gym. Generating New Revenue Streams Customers have become used to purchasing such over-the-top Internet Interest in Futuristic Services Current FTTH Users Over Age 55 17% 16% 31% 30% 27% 26% 25% 23% 36% 35% 0% 5% 10% 15% 20% 25% 30% 35% 40% Older FTTH customers put online face-to-face health care above other video services, but one in six say they d also use FTTH for online courses. Source: RVA LLC. Very large HDD with super resolution Business video conferencing Advanced websites/full video Remote home and pet monitoring Advanced online shopping Online face-to-face healthcare One device for TV, Internet, & phone Two-way video calling Advanced online college 3D TV Interest in Futuristic Services Current FTTH Users Under Age 40 33% 52% 52% 50% 49% 47% 47% 46% 42% 41% 0% 10% 20% 30% 40% 50% 60% Video applications are pacing broadband use by FTTH customers under age 40. Source: RVA LLC. FTTH Council The Advantages of Optical Access 9

10 services as Skype or Netflix, but often they re happier to deal directly with network providers they know and trust. Broadband providers of all kinds now offer a variety of applications to their customers through Web portals or through set-top boxes, often at lower prices than the customers could obtain by purchasing these services directly. These applications reduce customer churn; they lower expenses by keeping more traffic in-network; and they create new revenue streams. Because fiber-to-the-home networks have virtually unlimited capacity and unparalleled reliability and remote service monitoring, fiber providers have a far wider choice of applications for resale. Online storage allows users to store their data files on the Internet, access them from anywhere and share them with others. Indeed, the cloud computing revolution has moved applications from the desktop to the Web. Service providers are now supplying the types of services to business customers that until recently were provided by corporate IT departments. Home security, like many other technologies, is migrating from analog to digital. Digitally based home security allows residents to control settings, receive alerts and view their homes via the Internet or cell phone. Digital security systems also support a wider range of sensors not only traditional motion detectors but cameras, Fiber-connected cameras can be used for community security applications. water detectors, smoke detectors and many others. Because digital security uses wiring that is already installed for broadband, it is inexpensive to install and makes economic sense for renters as well as homeowners. Over-the-Top Video may be offered as either an adjunct to or a substitute for a pay-tv offering, and it may be delivered either through a provider s Web portal or via a specialized set-top box or a hybrid set-top box. The business models, technologies and even legal status of provider-delivered OTT video are evolving rapidly a fact that demonstrates the enormous amount of interest in this application. If OTT video eventually displaces the traditional pay- TV model, fiber-to-the-home providers are well-positioned to benefit from this change because they can guarantee the quality of user experience. Videoconferencing or video chat is universally available through free or low-cost Web-based services, but it is cumbersome and the quality is often poor. Fiber to the home, with its high upstream bandwidth, presents opportunities for providers to make highquality videoconferencing avail able, Rural telco BEK brings local sports events to its video customers; this is the mobile studio. and several such services have been introduced in the past year. FTTH providers are generating new revenue streams not only from residential and business customers but also from advertisers, utilities and wireless providers. Targeted advertising sold to advertisers represents an important potential revenue stream. One mechanism is through IPTV, which lets providers insert ads based on nearly any criteria. IPTV ads can be sent to households with certain demographic criteria, or to households (or even individual TV sets) with certain viewing patterns. Another potential source of advertising dollars is t-commerce, in which television viewers click the remote on an ad or even a product placement in a television show to either see more information about the product or actually to order it. Automated meter reading is usually the first smart-grid application that utilities deploy because it is relatively straightforward to implement and has an immediate payback. Though most fiber deployers that have installed smart meters on FTTH networks are either public or cooperative electric utilities, a few telcos are installing and reading smart meters and charging utilities on a per-reading basis. Beyond automated meter reading, such smart-grid applications as demand-response programs, SCADA and outage investigation greatly reduce electric utilities operating costs. Smartgrid applications are major reasons that electric utilities across the country are now building fiber infrastructures. The federal government s stimulus programs have subsidized smart-grid upgrades and coordinated FTTH with smart-grid initiatives. Mobile backhaul has become an enormous revenue opportunity for fiber deployers. The exploding demands for mobile bandwidth have made clear to wireless providers that they must upgrade the connections from their cell sites to the Internet 10 The Advantages of Optical Access FTTH Council

11 Join the FTTH Council Isn t it time you enjoyed the benefits of FTTH Council membership? The Council offers several membership categories, with dues starting at only $395/year for organizations and as little as $50/year for individuals. (traditional connections are copper T1 lines with 1.5 Mbps bandwidth). FTTH deployers are already beginning to run fiber to the busiest cell sites about one cell site in five is now served by fiber. In addition, the next generation of wireless architecture will move all baseband processing from cell sites to the cloud; cell sites will have to be connected via fiber to hubs where processing takes place. Remote music lessons. Electric meter set up to transmit smart-grid information. Property Management Broadband enables property owners to control their properties and assets more efficiently than ever before. The addition of broadband especially the high-capacity, high-reliability broadband that fiber enables turns smart buildings into genius buildings, according to one expert. Internetenabled sensors and applications automate work that was once done by maintenance crews and get it done it more quickly and accurately. Broadband applications also help owners communicate with tenants and employees. Guarding construction sites can be managed through IP-based video surveillance. Asset tagging, typically with inexpensive RFID, helps prevent theft or misplacement of equipment, and tags worn by employees help make sure people are where they re authorized to be. Videoconferencing allows construction managers to make virtual site inspections more frequently than they can make physical inspections. Online work order scheduling helps property managers be more responsive to their residents while reducing operating expenses. Residents can request repairs at any time not just when the office is open or they can find the super and management personnel can deal with problems that require personal attention rather than routine requests. Residents can be automatically notified when work is completed. Energy management and water management can be broadband-enabled. Motion sensors, intelligent thermostats and automated ventilation equipment can keep public spaces and unoccupied units at appropriate temperatures; applications that monitor and analyze usage help property managers and residents find opportunities to shift loads to nonpeak times and reduce their overall usage. We are: n Independent telecom providers from across North America that are future-proofing their networks by upgrading to FTTH. n Competitive broadband providers that are differentiating their offerings with all-fiber connectivity. n A wide variety of FTTH equipment manufacturers and other broadband solutions providers showcasing their latest products. n Engineering, outside-plant, consulting and construction firms that work with telecom service providers to design and deploy North America s next-generation networks. n Municipalities and electric utilities that operate all-fiber networks as a way of enhancing prospects for local economic development. n Educational institutions, students and individuals interested in learning more about all-fiber networks and their role in communities economic growth and competitiveness. n Industry and professional groups whose missions are enhanced by the availability of ultra-broadband networks. Our areas of focus include: n Building a legislative and regulatory framework for advancing FTTH deployments. n Educating policymakers and the public about the benefits of FTTH. n Sharing information and best practices concerning: Emerging optical access technologies and FTTH industry trends. All-fiber network design, operations and optimization. Fiber-to-the-home business planning and marketing strategies. Smart-grid and green technology evolution. High-bandwidth consumer applications, content and in-home networking. For more information, please consult the membership section of the FTTH Council website, or secretariat@ftthcouncil.org. FTTH Council The Advantages of Optical Access 11

12 Fiber: The Light Fantastic Unlike copper cable, which carries low-voltage electrical signals, fiber optic cable carries information by transmitting pulses of light. The pulses are turned on and off very, very quickly. Multiple streams of information are carried on the same fiber at the same time by using multiple wavelengths colors of light. The pulses of light are usually created by lasers. (Some short-range fiber systems use LEDs.) The equipment that transmits signals keeps getting faster and cheaper, so the same old fiber can be used to carry ever more information. New equipment is just slipped in. Fiber has many advantages over copper wire or coaxial cable, as it is easier to maintain and delivers far more bandwidth. Three of the biggest advantages are these: 1Signals travel long distances inside fiber cable without degradation 50 miles or more in some real-world networks and 65 miles or more in the laboratory. By contrast, bandwidth decreases in copper wire or coax as the distance traveled increases. Short lengths of coax, for instance the lengths typically found in a small building can carry 1 Gbps if the coax network is well designed. That s 500 times more bandwidth than typical broadband services using DSL over copper wire, and 200 times more than typical broadband over cable TV coax. But those speeds are impossible over longer distances. The closer fiber gets to a building, the shorter the copper loop and therefore the faster the service that can be made available to the building s residents and businesses. Fiber all the way to the living unit can deliver virtually unlimited speeds. 2Fiber cable is thin. Individual fibers can, in fact, be made thinner than a human hair. Thin fibers can be carried on a narrow ribbon or inside a microduct of hollow plastic typically less than 1/8 inch in diameter. One typical fiber cable configuration with about 200 superthin strands is about the thickness of a standard coax cable. That fiber cable could theoretically carry enough bandwidth to handle all FTTH Cable Modem DSL the information being sent on earth at any one time today. The bottom line: Fiber can be hidden easily on the surfaces of walls in old construction. It is also flexible and rugged. In 2007, many vendors introduced inexpensive fiber that is tough enough to be stapled to Comparative Bitrate in Mbps, Downloads Comparative Bitrate in Mbps, Uploads Even in today s deployments, which often do not exploit the full potential of fiber, FTTH has a sizable, and growing, downstream bitrate advantage over cable and DSL. The advantage of fiber is even more apparent on the upstream side on average, FTTH connections have more than three times the upstream speed of cable or DSL connections. Source: RVA LLC. (DSL and cable data for not available.) 12 The Advantages of Optical Access FTTH Council

13 Average Number of Times Modem Rebooting Necessary Per Month Wireless Cable Modem FTTN DSL FTTH walls by installers and flexible enough to be bent around sharp corners. Though such fiber had been available for years, in the past it had been difficult and expensive to manufacture. Optical fibers made of polymers (plastics) rather than glass are now starting to be deployed for indoor networks. These cables are easy to install and close to invisible. 3Once installed, fiber is upgraded by changing the electronics that create and receive the light pulses, not by replacing the cable itself. Fiber cable deployed in the access network is considerably longer lived than copper. It has a recommended depreciation life of 20 to 25 years, according to consulting company Technology Futures Inc. in a study commissioned by several Tier 1 telephone companies. The actual physical life expectancy of fiber is even longer; its economic life is limited by the prospect of competition. 4Fiber networks are far less expensive to maintain and operate than copper networks. The fiber is amazingly reliable. Nothing hurts it except a physical cut or the destruction of the building it is in. Passive optical networks, or PONs, are the most Another measure of FTTH reliability: Customers report only about 1.5 reboots necessary per month better than twice the reliability of cable. Source: RVA LLC common type of fiber network. They use a minimum of electronics. In fact, there are no electronics at all between the provider s central office and users. This improves network reliability and cuts deployment costs. But optical networks that do require electronics in the field have some advantages as well, especially when a network is built to carry content from multiple providers on the same fiber. Either way, the amount of power needed to run a fiber network is far less than that needed to run a coax or other copper network. This aids reliability and contributes to sustainability as well. Very Satisfied with Specific Internet Aspects, FTTH Versus Cable Modem Provider s customer service Consistency of speed Installation process Broadband speed Reliability service uptime 43% 58% 42% 61% 52% 63% 46% 64% 49% 69% 0% 10% 20% 30% 40% 50% 60% 70% 80% Telcos generally outperform cable operators on service, but telcos offering FTTH widen the gap even further. Source: RVA LLC. Most Important Advantages of FTTH As Reported by Customers Speed/ faster/ better Internet/ bandwidth Picture clarity/ video clarity Reliability/consistency/ no hassles Bundle of several services on one bill Cost Quality Fewer weather disruptions Number of channels/ entertainment choice Better customer service General positives - pleased to have it DVR Convenience Other Better than previous cable company Video-on-demand/ movie downloads No satellite dish Better technology/ up to date Lines are buried/ not overhead Easy installation Can run two computers at once 20.2% 15.8% 10.7% 9.8% 5.8% 5.8% 5.4% 5.2% 3.0% 2.7% 2.5% 2.3% 1.4% 1.1% 1.0% 0.8% 0.6% 0.5% 0.5% 44.8% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Bandwidth and reliability were cited most often by customers as FTTH advantages. Source: RVA LLC FTTH Council The Advantages of Optical Access 13

14 Telehealth: The Time is Now Fiber s bandwidth, reliability, safety and security have made it the technology of choice for in-hospital networks, and health care providers increasingly depend on fiber for exchanging huge image files and even for remote consultations and surgery. Until recently, regulatory requirements have limited the opportunities for using broadband to substitute live-at-home options for costly nursing home care. A recent study in Philadelphia, however, suggests that these savings are too large to ignore. Moreover, the situation studied could be copied by many local network providers under current regulations. NewCourtland, a senior services provider in Philadelphia, operates the LIFE program, modeled on the Medicare/Medicaid Program of All-Inclusive Care for the Elderly (PACE) initiative. PACE serves individuals who are Housing with Technology saves medical costs Number of patients 33 in 26 housing units or rooms Annual technology cost $39,000 Annual home care cost $249,600 Total nursing home cost avoided $2,135,250 Annual savings $1,846,650 age 55 or older, certified by their state to need nursing home care, able to live safely in the community at the time of enrollment and in a PACE service area. A total of 75 providers in 29 states have received Medicare and Medicaid waivers to operate PACE programs. Although all PACE participants are certified to need nursing home care, the program keeps 93 percent of participants living safely in the community. PACE providers deliver all needed medical and supportive services, including adult day care, medical care, drugs, social services, medical specialists, and hospital and nursing home care when they become necessary. By employing remote monitoring technology, NewCourtland enabled 33 residents to move from traditional nursing home care, realizing an annual savings of more than $1.8 million. Essentially, the technology helped substitute a $125 per month technology Become a CFHP! Certified Fiber to the Home Professional Program The rapid growth in FTTH is creating significant demand for technical staff trained in FTTH technology and installation techniques. Many service providers are struggling to find enough trained staff. In response to this need, the FTTH Council has embarked on a training and certification program in cooperation with professional training organizations, educational institutions and other third-party training programs offered by major vendors and service providers. This program benefits the fiber industry and develops in-demand job skills for people dislocated during the current recession. Certification as a CFHP indicates a professional level of technical competence in fiber-to-the-home technologies. Certification requires demonstrating knowledge of and familiarity with FTTH architecture, network design, deployment technology and operational skills, not a specific vendor s products. Candidates for CFHP certification include management and supervisory staff, technical support managers and administrators, design specialists, telephony and network engineers and administrators, and advanced network engineers and administrators. Individuals participating in or graduating from community and technical college programs in telecommunications can also be candidates even if they have little or no experience in telecommunications. The Council recommends participating in a training course before taking the certification exam. The current CFHP course consists of two days of classroom instruction and is structured to provide competence in overall FTTH theory, terminology, topology, equipment and system cost estimation. CFHP COURSE DATES for 2011 Dallas, TX (at the Broadband Summit) April 28-29, 2011 Spartanburg, SC June 1-2, 2011 St. Louis, MO June 9-10, 2011 Seattle, WA July 6-7, 2011 Minneapolis, MN September 7-8, 2011 Orlando, FL (at the FTTH Conference) September 26-27, 2011 Austin, TX December 8-9, 2011 The first two-day CFHP training course has been developed by The Light Brigade with assistance from FTTH Council member companies and organizations. For more information, go to After completing the course, candidates can take the online examination to confirm certification on the FTTH Council s website. Those who successfully demonstrate knowledge of the course matter through this online examination by achieving a passing percentage of 80 percent or higher will receive the CFHP designation and a certification diploma valid for three years. The CFHP exam and certification fee is $150 for the three-year period. After that time, another exam will be required to maintain certification. For further information, please contact cfhpinfo@ftthcouncil.org. 14 The Advantages of Optical Access FTTH Council

15 cost per person for $225 per day in nursing home costs, starting in Seven of the patients were in a group home, and 26 lived separately. Instead of staffing the patients homes with live-in help, NewCourtland installed a Healthsense eneighbor system that includes sensors placed around the home, biometric devices as appropriate, medication dispensing, and a check-in button in each person s home. A problem or unwarranted change brings a call from the monitoring center and, if necessary, a response from nearby staff. In a group home, there is one caregiver, supplemented with regular extra support mornings and evenings. Keeping even one person out of Keeping even one person out of the hospital can pay for all systems for a PACE program for a year. The individuals we helped were motivated to leave a nursing home and move into the community, making an extra effort to participate in rehab. the hospital can pay for all systems for a PACE program for a year, said Jim Reilly, Director of Courtland Health Technology. And more important, the individuals we helped were motivated to leave a nursing home and move into the community, making the extra effort to participate in rehab. Inside the patient s living unit, all the equipment is connected by Wi-Fi to a network gateway. Fiber providers, whose networks rarely suffer outages that require on-premises gateway resets, have a huge advantage over DSL or cable providers in supporting programs like this one. FTTH Aids Sustainability For service providers concerned about the impact of their networks on the environment, there s good news about fiber. The environmental impact of FTTH is more positive than that of traditional copper networks, according to a Pricewaterhouse- Coopers study commissioned by the FTTH Council and released in October Even with conservative assumptions about take rates, the greenhouse gases produced in manufacturing equipment and deploying networks are far lower for fiber than for copper networks and are outweighed in about five years by the savings from increased telecommuting alone. Telecommuting saves more than triple the amount of greenhouse gases released by powering the network. That s an annual carbon-reduction dividend of close to 20 percent. Other environmental impacts are recouped with fiber in time periods ranging from one to six years, according to the report, which examined an average American FTTH deployment. The impact of any actual network would be slightly different from the typical case that was studied. Earlier studies have shown smaller annual savings, but almost all studies show a positive impact. Savings on gasoline (both for commutes avoided and for commuters who now enjoy less congestion on the highways) are partially offset by extra electricity use at home and by the power used to run the networks. Savings are likely to increase in the future as the uses of broadband networks expand. For example, PricewaterhouseCoopers did not consider other energy-saving applications, such as: Telepresence, which is beginning to replace a significant amount of business travel; Cloud computing, which enables data centers to be located near sources of renewable energy; Smart-grid applications, which make electricity generation and distribution far more efficient; or Distance learning, which reduces travel for educational purposes. About three-quarters of greenhouse gas emissions in the network life cycle come from the manufacture of active network equipment, Pricewaterhouse Coopers found. The researchers also examined how FTTH deployment affected such environmental issues as resource depletion, air acidification, algae growth in the oceans and the release of toxins into the environment. By every measure, FTTH had a beneficial environmental impact. A more complete presentation of the report s results can be found at ftthcouncil.org/en/knowledge-center/ documents-of-interest-to/ftth-equipment-vendor/environmental-benefits-of-ftth-deplo. FTTH Council The Advantages of Optical Access 15

16 Builders, Real Estate Developers and FTTH Virtually all large developers of single-family homes and many developers of multifamily communities add FTTH to new properties. Many are working on retrofitting older properties as well. Retrofit work has expanded as new-home sales have fallen in the recession. Before the housing boom ended, Michael Render of RVA LLC estimated, on the basis of surveying home buyers and developers, that FTTH added about $5,000 to the price of a home. The size of the increase is less certain now, but it is clear that FTTH homes sell faster. By mid-2006, FTTH was economically viable in new developments with as few as 80 MDU living units or 100 single-family homes. That number has continued to fall due to improvements in deployment technology. As fiber and fiber deployment costs have fallen and copper costs have increased, fiber has achieved cost parity with copper in most new construction. Source: RVA LLC 21,000,000 16,000,000 11,000,000 6,000,000 1,000,000-4,000,000 19,400 FTTH Homes Passed, March 2011 (Cumulative, North America) 8,003,000 6,099,000 3,625,000 4,089,000 35, ,000 72, , , ,000 1,619,500 2,696,846 11,763,000 9,552,300 18,249,900 17,227,000 15,170,900 13,825,000 20,914,476 19,966,200 Sep-01 Mar-02 Sep-02 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Source: RVA LLC FTTH is now available to almost one out of five American homes. In the six months between September 2010 and March 2011, an additional 948,000 homes were passed by fiber despite the recession and the worst winter weather in a decade. That s below the previous 6 months but in line with the same period a year earlier. Major Categories of Fiber-to-the-Home Deployers And Take Rates, Winter 2010 For single-family homes, customer-premises equipment is typically located outdoors. Developer With Competitive Overbuilder Incumbent Rural Telephone Company Competitive Overbuilder (Rural or Suburban) Municipality or Public Utility District Acting as Retail Provider Competitive Overbuilder (Urban) Regional Bell Operating Company (within MSA) Municipality or Public Utility District Acting as Wholesaler 25.0% 32.0% 30.0% 44.0% 42.0% 58.0% 85.5% Source: RVA LLC 16 The Advantages of Optical Access FTTH Council