Fiber:
Not Just for Breakfast Anymore
Heather Burnett Gold, President FTTH Council Americas
The world is going all-fiber
Google gets over 1000 applicants
C Spire announces build out of Mississippi
CenturyLink annou...
North American FTTH Growth
Homes Passed

Homes Marketed

Homes Connected

30
25
20

2013 Homes Passed: 27.7M
2013 Homes Ma...
Number Of U.S. FTTH Communities

Based on the 2012 Consumer Study,
approximately 8.5% of U.S.
municipalities had FTTH – or...
FTTH Take Rates

U.S. Take-Rates Versus Homes Marketed Reach 45.8%

Verizon Build Starts

50%
45%
40%
35%
30%
25%
20%
15%
...
FTTH Take-Rates Are Even Higher In Many Cases

Take-Rates Vary From 25% To 81%

Real Estate Dev (Greenfield)

81%

Cable T...
FTTH is already strong in rural areas
With over 500 FTTH providers in Tier 2 / Tier 3 markets

Primary
driver in area:

Ti...
FTTH in rural areas benefited from the ARRA stimulus

In 2009, major funding opportunities were made
available through the...
And the market is still ripe

According to RVA, LLC, 73.7 million homes in
suburban and rural areas are not yet passed by ...
Why Is the World is Changing?

In the past 15 years, we’ve seen…
The Internet
iPods
HDTVs
DVRs
Smartphones (Blackberry, iP...
Video on all Screens - HDTV
An image is built on a screen, pixel by pixel.
One HDTV program = 8 - 12 Mbps
Pixel
1 house = ...
App Uses Already Available Are Increasing

Internet Activities Completed At Least Once/Month By FTTH Users
68%

Shop onlin...
Why Fiber?
Greater Bandwidth, Longer Distance, Lowest Cost / Bit
Copper

Bandwidth

Distance Cost per Bit

Fiber
2,400 Pai...
Why fiber?
Metal cables and wireless have significant limitations
Fewer truck rolls with fiber

Lower power consumption ve...
With An All Fiber Network
You Build It Once – Its Build to Last
Typical FTTH Architectures
PON (Passive Optical Network)
Incorporates a signal divider, such as
an optical power splitter
...
Today’s Common FTTH Architectures

Curre
nt Gen

Next
Gen

Curren
t Gen

Next
Gen

Point to
Point
(Active
Ethernet)

2.4
G...
Passive Networks +/In US – Passive Optical Networks is the predominant network
architecture (94%)
PONs have some distinct ...
Active Networks +/Active optical networks advantages
Reliance on Ethernet technology makes
interoperability among vendors ...
FTTH matters for rural residents

Can erase educational inequities
Reduce health care challenges like declining
physician ...
So – How Do You Get There?
Engage the community

FIND A CHAMPION
Create a steering team
Recruit local organizations
Use their language, not yours
Est...
Build the Business Plan
What resources are in your region? Check the FCC’s
Broadband Deployment Map as a start
Estimate Co...
Basic math blocks deployments

Benefits Accruing To:
Investor in the network
Content and applications
Equipment and device...
Initial Equation May Not Appeal
to Investors.
For the Investor, the equation usually looks like this:

C + O > (1-r)R + SB...
Communities can change the math.

But how do we do that?

C + O < (1-r)R + SB + (-CL)

Use existing assets, partnerships a...
Communities have Resources
Reduce Cap Ex
Reduce Op Ex
Reduce Risk
Increase Revenues
Increase Ecosystem
Benefits

•Build to...
Lowering costs:
Reducing CapEx and OpEx
Decreasing Costs
Granting a provider access to existing physical assets ahead of t...
Reduce Risk, Increase Revenue
Increasing Potential Revenue
Marketing services to the community
Effort to increase uptake o...
Funding
Exhaust all Federal, State and Local options
Federal
CAF – new experimental dollars for all types of entities
Scho...
Implement/Build
Issue an RFP to determine what kind of
ownership/network will work
Find a technical expert to assist in RF...
Many paths you can follow
A private entity completely owns the network and
there is no public ownership
Private
Third Part...
Lots of Resources to Assist…
But You Can’t Afford to Wait
Blandin Foundation Toolkit -http://broadband.blandinfoundation.o...
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Fiber not Just for bREAKFAST

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  • A network in northwest Minnesota connects 126 schools and 43 libraries in the state, and learners to courses otherwise unavailable.Swanberg Farms in Lyford, Texas, monitors commodity prices and weather forecasts. John Deere&apos;s line of connected equipment makes precision ag possible.55%: broadband is essential to remaining in a community38%: would relocate if broadband wasn&apos;t available32%: operate a home-based business Smith County Memorial Hospital in Smith Center, Kan., uses fiber to consult with specialists at larger regional hospitals. In Minnesota, Hiawatha Broadband is participating in a project that uses fiber as a platform for home monitoring of patients with dementia.
  • Fiber not Just for bREAKFAST

    1. 1. Fiber: Not Just for Breakfast Anymore Heather Burnett Gold, President FTTH Council Americas
    2. 2. The world is going all-fiber Google gets over 1000 applicants C Spire announces build out of Mississippi CenturyLink announces Omaha, Las Vegas VTel, Smithville Digital announce upgrades to gigabit speeds Minnesota already has over 50 operators
    3. 3. North American FTTH Growth Homes Passed Homes Marketed Homes Connected 30 25 20 2013 Homes Passed: 27.7M 2013 Homes Marketed: 25.5M 2013 Homes Connected: 10.7M 15 10 5 0 Sep' 13 Mar '13 Sep '12 Mar '12 Sep '11 Mar '11 Sep '10 Mar '10 Sep '09 Mar '09 Sep '08 Mar '08 Sep '07 Mar '07 Sep '06 Mar '06 Sep '05 Mar '05 Sep '04 Mar '04 Sep '03 Mar '03 Sep '02 Mar '02 Sep '01 Source: RVA annual Provider & Consumer Studies
    4. 4. Number Of U.S. FTTH Communities Based on the 2012 Consumer Study, approximately 8.5% of U.S. municipalities had FTTH – or about 1,759 Source: RVA 2012 Consumer Study
    5. 5. FTTH Take Rates U.S. Take-Rates Versus Homes Marketed Reach 45.8% Verizon Build Starts 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Sep '13 Mar '13 Sep '12 Mar '12 Sep '11 Mar '11 Sep '10 Mar '10 Sep '09 Mar '09 Sep '08 Mar '08 Sep '07 Mar '07 Sep '06 Mar '06 Sep '05 Mar '05 Sep '04 Mar '04 Sep '03 Mar '03 Sep '02 Mar '02 Sep '01 Source: RVA annual Provider & Consumer Studies
    6. 6. FTTH Take-Rates Are Even Higher In Many Cases Take-Rates Vary From 25% To 81% Real Estate Dev (Greenfield) 81% Cable TV/ MSO (Greenfield) 62% Competitive Prov/ CLEC Rural 52% ILEC Tier 2 & 3 51% Muni Retail Rural 48% Tier 1 ILEC Overbuild 38% Competitive Prov/ CLEC… Muni Retail Urban/Suburban 31% 30% Muni Wholesale 25% 0% 20% 40% 60% 80% 100%
    7. 7. FTTH is already strong in rural areas With over 500 FTTH providers in Tier 2 / Tier 3 markets Primary driver in area: Tier 3s There are over 500 FTTH providers in Tier 2 / Tier 3 markets Verizon Munis Source: RVA 2013 Provider & Consumer Studies U.S. FTTH State Penetration State Households Connected Ranges From 1% to 33%
    8. 8. FTTH in rural areas benefited from the ARRA stimulus In 2009, major funding opportunities were made available through the stimulus. Broadband Initiatives Program provided $3.5 billion to expand and improve connectivity in rural areas and small towns/cities Broadband Technology Opportunities Program gave $3.7 billion focusing on middle mile infrastructure, “community anchor institutions,” broadband adoption and mapping
    9. 9. And the market is still ripe According to RVA, LLC, 73.7 million homes in suburban and rural areas are not yet passed by FTTH Take rates in Tier 2 and 3 markets exceed 50 percent And FTTH results in higher ARPU over other types of broadband builds in the same areas0o
    10. 10. Why Is the World is Changing? In the past 15 years, we’ve seen… The Internet iPods HDTVs DVRs Smartphones (Blackberry, iPhone, etc.) Tablet computers All of these revolutionary technologies require higher speed networks We must expect and plan for more and faster changes in the future!
    11. 11. Video on all Screens - HDTV An image is built on a screen, pixel by pixel. One HDTV program = 8 - 12 Mbps Pixel 1 house = 48 Mbps just for video, today… How about tomorrow? TV 12 Mbps 1080 pixels TV + DVR 24 Mbps 1920 pixels
    12. 12. App Uses Already Available Are Increasing Internet Activities Completed At Least Once/Month By FTTH Users 68% Shop online 25% Upload large files 10% Use VOIP for audio Download/ stream video to… 5% 36% 24% 23% 13% 20% Upload video content to Internet 7% Use two-way video conferencing 0% 81% 2010 2013 19% 20% 40% 60% 80% 100%
    13. 13. Why Fiber? Greater Bandwidth, Longer Distance, Lowest Cost / Bit Copper Bandwidth Distance Cost per Bit Fiber 2,400 Pair Copper Cable 100 Gbps to 1KM 1 Fiber Cable > 50 Tbps > 5,000 KM Bandwidth Distance Cost per Bit
    14. 14. Why fiber? Metal cables and wireless have significant limitations Fewer truck rolls with fiber Lower power consumption versus DSL/HFC Not affected by lightning, rain, humidity issues No maintenance needed for amplifiers Feature Benefit High bandwidth High information carrying capacity Low attenuation Long distances without repeater, which is less expensive Light weight Small size Easier installations Unobtrusive No metallic conductors No grounding problems No “crosstalk” Passive No power requirements No circuit protection needed Difficult to tap Very secure Inexpensive Widely deployable & cost effective
    15. 15. With An All Fiber Network You Build It Once – Its Build to Last
    16. 16. Typical FTTH Architectures PON (Passive Optical Network) Incorporates a signal divider, such as an optical power splitter One fiber at the central office feeds many fibers in the field G-PON (Gigabit PON) and GE-PON (Gigabit Ethernet-PON) are the most common architectures Point-to-Point (“Active Ethernet”) One fiber in the head end = one fiber in the field Central office or remote cabinet OLT PON Optical Power Splitter or wavelength filter Central office or remote cabinet OLT Point-to-point
    17. 17. Today’s Common FTTH Architectures Curre nt Gen Next Gen Curren t Gen Next Gen Point to Point (Active Ethernet) 2.4 Gbps total 10 Gbps total 1.2 Gbps total 10 Gbps total 100 -1000 Mbps per sub GPON Downstream Bandwidth GE-PON Upstream Bandwidth 1.2 Gbps total 10 Gbps total 1.2 Gbps total 10 Gbps total 100 -1000 Mbps per sub Typical distance 20 km 20 km 20 km 20 km 20 km Wavelengths (nm), Downstream Upstream Central office or remote cabinet OLT PON Optical Power Splitter or wavelength filter Central office or remote cabinet OLT 1490 1310 1577 1270 1550 1310 1577 1270 1550 1310 * NG-PON 2 = 40 Gbps downstream/10 Gbps upstream Point-to-point
    18. 18. Passive Networks +/In US – Passive Optical Networks is the predominant network architecture (94%) PONs have some distinct advantages. They're efficient, each fiber optic strand can serve up to 32 users. Have a lower building and maintenance costs Passive optical networks also have some disadvantages. They have less range than an active optical network, Make it difficult to isolate a failure when they occur. Because bandwidth in a PON is not dedicated to individual subscribers, data transmission speed may slow down during peak usage times in an effect known as latency.
    19. 19. Active Networks +/Active optical networks advantages Reliance on Ethernet technology makes interoperability among vendors easy. Subscribers control throughput Active optical networks disadvantages. Require at least one switch aggregator for every 48 subscribers. Requires power, so inherently less reliable than a passive optical network.
    20. 20. FTTH matters for rural residents Can erase educational inequities Reduce health care challenges like declining physician numbers, access problems Can turn rural America into a "middle shore" for high-tech job opportunities
    21. 21. So – How Do You Get There?
    22. 22. Engage the community FIND A CHAMPION Create a steering team Recruit local organizations Use their language, not yours Establish your network as the game-changing asset Get people thinking and talking about your network
    23. 23. Build the Business Plan What resources are in your region? Check the FCC’s Broadband Deployment Map as a start Estimate Cost to Deploy Various state groups (i.e. Blandin) have model spreadsheets Find experts – ask others who have deployed Estimate what you can bring to the table Demand Assets
    24. 24. Basic math blocks deployments Benefits Accruing To: Investor in the network Content and applications Equipment and devices Local community The region The country Total benefits of high speed networks But the only benefits that matter for the investment case are the benefits that matter to the investor… and as to those…
    25. 25. Initial Equation May Not Appeal to Investors. For the Investor, the equation usually looks like this: C + O > (1-r)R + SB + (-CL) Costs C: O: r: R: SB: CL: Benefits Capital Expenditures Operating Expenditures Risk Revenues System Benefits (Benefits that drive increased revenues outside the communities where the new or incremental investments are made) Losses due to competition In short, the costs outweigh the benefits to the investor.
    26. 26. Communities can change the math. But how do we do that? C + O < (1-r)R + SB + (-CL) Use existing assets, partnerships and opportunities to move the arrows.
    27. 27. Communities have Resources Reduce Cap Ex Reduce Op Ex Reduce Risk Increase Revenues Increase Ecosystem Benefits •Build to Demand Model •Access to ROWs, Facilities •Reduce Regulatory Time •Access Payments •Reduce Ongoing Regulatory Costs •Utilize Existing Billing Platforms Basic Math for an Upgrade •Build to Demand •Standardize Functions Across Areas, Vendors •Demand Acceleration/Aggregation •Marketing Platform •New Services •Distributed Innovation •Seeding Long-Term Growth
    28. 28. Lowering costs: Reducing CapEx and OpEx Decreasing Costs Granting a provider access to existing physical assets ahead of time can decrease the costs of building or upgrading a network. These include dark fiber, conduit systems, potential future fiber and light poles. Getting institutional partners involved. University communities have access to regional optical networks / open peering & routing to R&E networks Expediting local permitting reduces the amount of time employees are waiting, lowers the capital expenditure costs while being little or no cost to the community. Lowering or providing no cost permits for aspects of construction excavation, traffic control, railroad crossing eases capital expenditure burdens. Assist with obtaining local rights of way or agree to obtain and assign rights of way to a potential provider partner to lower construction costs. Institute a Dig Once policy to ensure conduit is installed prior to street closings, lowering costs for laying fiber. Create incentives to encourage Multi-Dwelling Unit owners to create a common telecom entrance facility requirement, lowering barriers to entry for potential providers. Streamline inspections for next generation network projects. Pre-authorize use of construction methods like micro-trenching. Ensure competitively neutral process for waivers for construction decisions regarding cabling and trenching.
    29. 29. Reduce Risk, Increase Revenue Increasing Potential Revenue Marketing services to the community Effort to increase uptake of existing business services Assist with local political support Finding and securing local grants Exclusive marketing rights Named branding opportunities Anchor institution, enterprise and residential revenue commitment through demand aggregation Interested community and MDU owners willing to bundle the cost of services into rent for tenants Over the top services
    30. 30. Funding Exhaust all Federal, State and Local options Federal CAF – new experimental dollars for all types of entities Schools and Libraries Economic Development Agency loans RUS – loans and grants State Blandin Foundation
    31. 31. Implement/Build Issue an RFP to determine what kind of ownership/network will work Find a technical expert to assist in RFP review and implementation oversight Communicate with your constituents every step of the way Where do you deploy first? What applications do they want?
    32. 32. Many paths you can follow A private entity completely owns the network and there is no public ownership Private Third Party: A service provider owns the network and provides retail and wholesale services Public-Private Partnership PPP Open: Network owned by PPP, has an open wholesale network and may provide retail services PPP Not Open: Network owned by PPP, not necessarily an open wholesale network but must provide retail services A public entity completely owns the network infrastructure Public A public entity owns or funds part of the infrastructure
    33. 33. Lots of Resources to Assist… But You Can’t Afford to Wait Blandin Foundation Toolkit -http://broadband.blandinfoundation.org/toolkit/ FTTH Council Community Toolkit -http://www.ftthcouncil.org/communitytoolkit Webinar on New FCC Rural Funding Experiments -http://www.ftthcouncil.org/p/ca/vi/sid=82

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