The case for fiber

Last month I told you the joke about how, ten years ago, 56k dial-up was the Next Big Thing in Internet connectivity. What I left out was that, in reality, everyone knew that the Next Big Thing was really broadband. The question was, how broad could you make the band‾ How broad did users want it‾ And how could you do it without building a whole new access loop‾

Which leads to the other joke about how, around the same time, most of the industry had given up on the idea of connecting every home with optical fiber.

I remember hearing grand talk in the early 90s about how fiber optics would revolutionize telecoms and how, in the not too distant future, because of the Internet, we would all have direct links to the Optical Fiber Highway. Trouble was, it was just too expensive to roll fiber all the way to the building at the time, which is why telcos and vendors alike shelved that idea in favor of alternative ways to make the local loop go faster, either by using existing plant or wireless technology.

Obviously, some have weathered the years better than others for all sorts of reasons. Some simply refuse to die despite unimaginable odds (I'm thinking of broadband over powerline here). DSL is the most widely deployed of the bunch, and somehow has managed to keep up with a world where telcos are offering IPTV. Last month, Ericsson announced it had achieved 100-megabit DSL speeds in the lab. Metro Ethernet services are delivering that now, and going up to a gigabit in Hong Kong via HKBN.

Who needs fiber to the home anymore‾

Well, South Korea does.

Look at KT, which said earlier this year that it would spend just over $1 billion to roll out fiber to every home it serves by the end of the decade. The reason: because when IPTV services (which haven't come to Korea yet mainly due to regulatory haggling over jurisdiction) start rolling out later this year, ADSL just ain't gonna cut it.

It's a fair point. IPTV ultimately won't be just straight broadcasting - it'll be interactive programs on demand and multiple high-def video streams running down the same access pipe. By most estimates, to support that, plus the high-speed data requirements you'd expect from a home with its own network, you're going to need at least 20 megs, and probably more like 40 megs.

Which is why FTTH (or, more accurately, FTTx,) seems to be making a comeback of sorts.
It never went away, technically - FTTx has been rolling out most steadily in Japan and Korea and several EU markets for the last decade. But even the US is suddenly kicking into gear as telcos get more competitive with IPTV/high-speed data services. A recent OECD report said that FTTH/FTTB accounts for around 7% of broadband subscribers in OECD countries. In Asia Pacific, says In-Stat, almost one in ten broadband subscribers are on an FTTx connection. Those may not be impressive numbers on paper, but by 2011 Japan and Korea will have swapped out all of their DSL connections for fiber access.

Beyond Asia

Okay, that's partly due to government mandates on broadband connectivity in both markets. That wouldn't explain the surge in rollouts in the US, for example.


Still, Verizon's FiOS service targets of three to four million customers by 2010 aren't exactly aggressive.

There's also the fact that fiber rollout costs have come down considerably. Infonetics Research recently pointed out that forward pricing on Ethernet PON components such as ONTs and OLTs is almost on par with VDSL.

Still, I can't help feeling that Japan and Korea, as usual, are exceptions to the rule. At least for now. To be sure, we'll be seeing a lot more FTTx as demands escalate for multimedia services, home networking and Carrier Ethernet services. The thing is, not everyone in Asia needs - or could afford - the kinds of services FTTx can support. And with so many other options still available, most telcos, left to their own devices, will roll out fiber where it makes sense, and leave the rest to DSL or wireless.

John C. Tanner Global technology editor - [email protected]