Why we need FTTH-based gigabit internet access

Streaming requires only so much bandwidth, but there remain several reasons to want gigabit FTTH.

There are really a limited number of reasons. The first and last are relevant to operators, the others to end-users.

1. Opex. FTTH brings large savings to operators.
2. Speed, bandwidth. FTTH can handle speeds of 1 or more Gb/s.
3. Downloading. It can never go too fast. And uploading is generally slow on any other infrastructure. The asymmetric nature of traffic has nothing to do with this argument.
4. Redundancy, reliability, dedicated & future-proof access.
• Only on FTTH are real-world speeds comparable to headline speeds.
• Screens are getting bigger.
• Growing video traffic.
• Quality is getting better (HD, UHD, etc.)
• Web pages are becoming heavier, with more graphics, auto-play video etc.
• There will be more devices, more users.
• New applications.
• Backhaul for (offloaded) traffic, including tethering, mobile hotspots.
• Multi-tasking, including app updates, software updates, photo/video uploading etc.
5. Latency. FTTH beats other technologies. This is especially important for critical (but low-bandwidth!) IoT services.
6. Marketing. No matter what, speed sells.

FTTH vs. HFC is about opex, capex and timing

The FTTH/HFC controversy continues. Our views are always in flux and here is an update.

1. The government should stay out. And if they wish to interfere, there's only one way to justify this: nationalize the infrastructure, and separate the network from services.
2. We assume that an all-fiber network requires 'high' capex, but saves 'considerably' on opex. Evidence is growing:
• KPN states that FTTH opex is at least 30% less than copper opex.
• FTTH capex is continuously falling, as best practices grow.
• At Ziggo, opex and capex are continuously rising. Capex is doubling over the last 3 years.
• UPC states that EBITDA (OCF in Liberty Global speak) margins will structurally head lower.
• Small cable companies in the Netherlands, that have no shareholders demanding decent quarterly returns, all do FTTH. Some even skip Docsis 3 and go straight from Docsis 2 to FTTH.
• Netflix is taking a toll. It simply must.
• Better compression and other efficiency gains are nice, but even at a 50% improvement, they only buy 1 year of delay, since data traffic grows at roughly a 50% rate.
• Stratix put out a report that calculates what the roadmap, as laid out by TNO, would cost in terms of capex. Stratix claims the TNO gigabit (!) roadmap would be more expensive than overbuilding with fiber.
3. "Cable (HFC) will serve the market well beyond 2020". This statement from TNO must be read in 2 different ways:
• To say this, is to state the obvious. Any network can last. But one network will require more work (HFC) than others (FTTH) in terms of opex.
• Most importantly, it is a responce to an earlier TNO report, covering the 2010-2020 period. It suggested to some that cable companies would cease to exist on December 31, 2020. Which is of course total nonsense.
4. What the opex/capex implications of infrastructure choices are, ...
• ... is relevant to the cable operator. "Do we upgrade our old car, or do we buy a new one?", so to speak. It's a matter of timing.
• ... is a priori irrelevant to the end user. It may translate into a slower network and/or higher tariffs, and then the end user hopefully has an alternative to go to.
• ... is also irrelevant to the government (see 1.).
• ... is not irrelevant to shareholders, which is why public cable operators claim that they have future-proof networks.

UPDATE December 3, 2013

• Supply side: is about fiber (or 5G), future-proofing, skipping interim technologies (VDSL, Docsis 3, ...) versus legacy
• Demand side: expected traffic growth and business model (scarcity or abundance)
• Customer's role is limited to becoming a subscriber or quit.
• Shareholder's role is limited to buy or sell shares.
• Government role is to regulate, facilitate and when the market fails: intervene.
• Management's role is to make a choice between scarcity/minimising capex and abundance/maximise capex; or strike a balance between customer interest (maximise capex) and shareholder interest (minimise capex).

B4RN wants to bring customer-owned Gigabit to Lancashire

Another Gigabit initiative has launched: B4RN (Broadband for Rural North), in Lancashire, England. They are currently assessing demand and at a 50 percent take-up rate, the project will go ahead. B4RN wants to know by October 2011. In Phase 1, the network is to connect 8 parishes with 1,300 properties: Arkholme, Wennington, Melling, Wray, Tatham, Roeburndale, Over Wyresdale, Quernmore and Caton with Littledale (Littledale part only). This phase will cost GBP 1.86m (this includes some of the shared costs between all phases). There will be 3 phases.

Needless to say, Lindsey Annison of Fibrevolution is involved.

The specs:

• FTTH, 1 Gb/s symmetrical (and, depending on the electronics: more in the future);
• Aimed at Britain's 'final third': rural areas;
• Cost per home: GBP 1,000 at most, based on community co-operation;
• Financing through the issuance of shares; founding members invest a minimum of GBP 1,500; the Industrial and Provident Society (IPS), a non-profit, will own the network, shareholders are members; you can also earn a share by doing work for B4RN;
• Interested individuals outside the reach of the network can buy shares for a sum anywhere between GBP 100 and GBP 20,000;
• First year of service comes free (worth GBP 510);
• Normal price: GBP 150 connection fee plus a GBP 25 (excl. VAT) monthly fee;
• Femtocells may be added;
• B4RN will be the ISP, providing Ethernet IP; they are considering to provide access to other ISPs (using VLANs), but what's the point?

Some thoughts:

• Another Gigabit initiative, even in rural areas. Customer-owned is getting hot.
• Anyone can be a share owner.
• Will there be some form of co-operation with the Fujitsu initiative, that involves Virgin Media UK and TalkTalk?
• Just broadband + Internet access, no triple play. Over-the-top (OTT) services are recommended: a Gmail address, VoIP, YouView.
• Third-party ISPs could sign up to sell their well-known triple plays, it remains to be seen if this will be part of the plans.
• I wonder if they would be interested in speaking at our conference .....

To do 240 km/hr on the highway - that's why we need a gigabit

Some people try to calculate the need for bandwidth per household and arrive at 32 Mb/s, discounting x users and y connected devices. They claim that more makes no sense, because the human eye isn't even capable of digesting more information.

Pathetic.

Here's a nice analogy, drawn from the recently widened and renovated A2 highway, running all the way from Amsterdam to Maastricht and beyond. After a heist of a Brink's money storage facility near Amsterdam, the robbers were able to escape to Eindhoven and subsequently disappear altogher. According to media reports, they had been doing 240 km/hr on the A2.

We may not need to speed that much all the time, but sometimes it's nice. And that's why we need gigabit networks!