Showing posts with label 1 Gigabit fiber. Show all posts
Showing posts with label 1 Gigabit fiber. Show all posts

Tuesday, August 26, 2014

U.S. FTTP infrastructure projects falling into 2 categories


The construction of fiber to the premise (FTTP) Internet infrastructure in the United States is falling into two main categories:
  1. Projects in large and midsize metro centers such as those started or planned by Google Fiber, AT&T and Century Link as well as some cable companies. An article in the July 2014 issue of Broadband Communities magazine lists these deployments.
  2. Community or regional projects by local governments, utility cooperatives and public-private partnerships serving less densely populated areas not containing large cities such as those tracked by the Institute for Local Self Reliance.

The bifurcation of these infrastructure projects is distinguished by the economic health of their respective markets. Those in the first category undertaken by investor-owned providers that need a rapid return on investment are targeted to markets undergoing rapid economic growth, Broadband Communities editor Masha Zager writes in her article on large metro projects, citing the FTTP deployment strategy of Cox Communications:

Cox explicitly named rapid growth as one of its criteria for selecting cities for gigabit deployments. In contrast to municipalities, which often deploy fiber in an effort to jump-start lagging economies, large players favor localities that are healthier to begin with.

For the second category of projects, FTTP is clearly an economic development strategy to a far greater extent than the first. Unlike those in the first category financed by the impatient capital of telcos and cablecos burdened with high debt loads and large shareholder dividend obligations, community or regional projects will rely on patient capital. Sources include long term public bonds and creative public-private partnerships that blend public and private funding such as the Utah Telecommunications Open Infrastructure Agency (UTOPIA).

The second category is also distinguished from the first by the ownership and business models of the network infrastructure. In the first category of investor-owned projects, the network is a proprietary, closed access property. The telcos and cablecos that own the networks charge a retail monthly subscription fee to connecting premises.

By contrast, the second category is more likely to utilize an open access business model (such as UTOPIA) where fiber infrastructure is like a public works project such as a road or highway. Instead of selling individual subscriptions to customer premises, an open access model operates as a wholesaler selling network access to Internet service providers who provide services to customer premises. This model is a better option for the second category of projects because it removes the business risk of getting sufficient numbers of premises to sign up for service in order for the network deployment to be economically viable.

Sunday, December 22, 2013

Possible alternative to capitalize U.S. FTTP build out emerges in Utah

Building infrastructure of any kind is a costly undertaking, including fiber optic to the premise (FTTP) telecommunications networks. Those high capital costs have crimped FTTP build out in the United States, challenging existing telephone and cable companies as well as newcomers like Google Fiber.

In Utah, a new strategy is emerging involving a global firm that with patient capital that specializes in big dollar infrastructure projects. The Salt Lake City Tribune reports Macquarie Capital Group, an Australian firm that advises and invests in public projects around the world, will launch an engineering and feasibility study to operate Utah's 11-city UTOPIA FTTP network in a public-private partnership: 

Macquarie’s investors — including pension funds, large insurance firms and private endowments — were seeking to develop stable, long-term investment opportunities and were drawn to technology-based projects, Hann said. 

If the feasibility study proves fruitful and Macquarie agrees to take over the network, it likely will entail a deal in which the firm would assume management of the network for 30 years and invest in building out and upgrading the rest of the lines to neighborhood homes, Hann said. 

The network would remain an open-access network and Macquarie would partner with third-party Internet service providers, he said.

Monday, October 28, 2013

Who needs a Gig at home? Half of U.S. businesses | Technology Futures

Who needs a Gig at home? Half of U.S. businesses | Technology Futures

Andrew Cohill makes the excellent point that with the emergence of Fiber to the Home (FTTH) telecommunications infrastructure, the past focus on Internet throughput speeds that was relevant to legacy telephone and cable companies is becoming increasingly less so. Since incumbent telephone and cable companies have to compress data to transport it over metal wire cable plant not originally designed to carry Internet protocol-based signals, from their perspective bandwidth is a limited commodity. This also limits their ability to serve all premises in their service areas. Even more so in the case of mobile wireless technology which provides far less capacity and range. Hence, their business and pricing models treat bandwidth like a metered utility such as water or electricity.

With FTTH, that entire paradigm of bandwidth as a finite commodity goes out the window and with it the incumbents' outmoded business models. This also has implications for now outdated government subsidy programs based on rules written nearly a decade ago when DSL deployed by telephone companies was state of the art Internet technology. Those programs now need to be updated to scrap obsolete references to the speed of available Internet technology and treat any area lacking FTTH infrastructure as eligible for subsidies if incumbent or other providers aren't constructing it or opt not to.

Friday, October 25, 2013

Cheaper equipment to give fast copper broadband a boost | PCWorld

Cheaper equipment to give fast copper broadband a boost | PCWorld: G.fast promises up to 1G bps over existing copper telephone wires, but only over distances up to about 100 meters. The technology is now being designed to work at distances up to 250 meters, and it looks like ITU will have a full set of standards by early next year, according to Johnson.
Here we go again with the nutty idea that copper isn't obsolete for IP-based telecommunications. No matter how much throughput one can achieve with this decades-old POTS (Plain Old Telephone Service) infrastructure, as this story shows it will always be limited by distance.  The faster the speed, the shorter the distance -- not a good trend as customers expect faster connections.  With such short distances of 1 gigabit connections over copper, it has to be fed by fiber connections so close to customer premises that it makes more sense simply to run fiber all the way to the premise. 

Saturday, October 12, 2013

Poor internet connections in the countryside are hitting rural property market, estate agents warn - Telegraph

One agent who helps customers buy homes worth more than £1 million told The Daily Telegraph yesterday he was advising all of his clients against looking at properties that have slow internet speeds.
It came as reports in Scotland claimed people dubbed "digital refugees" were now moving from the countryside in search of faster internet speeds in the country's towns and cities. Frank Speir, director at Prime Purchase said: "Slow broadband speeds are having a definite effect on the market. It's becoming a much bigger issue." 

This is bound to become a much bigger issue in America as well.  Notwithstanding some high profile limited 1 Gigabit closed fiber to the premise networks in metro areas, much of the countryside remains without modern Internet connectivity, still served with dial up technology that was state of the art when Bill Clinton was beginning his first term as US president.

Conversely, a property having a fast fiber Internet pipe is more desirable, according to a 2009 study of U.S. broadband consumers, finding 82 percent of homebuyers with fiber to the home ranked it as the leading real estate development amenity.

Friday, April 19, 2013

Google's Fiber Takeover Plan Expands: Will Kill Cable & Carriers

Google's Fiber Takeover Plan Expands: Will Kill Cable & Carriers - Google is going to kill AT&T, Verizon, Sprint, T-Mobile and the cable companies. Kids don’t talk on the phone and they don’t have a ton of money. If they can be reasonably sure they’ll have a wifi network, then they are simply not going to sign up for AT&T or Verizon.

It’s game over... in five short years.
This hyped up prediction calls for a reality check.  In 2009, the U.S. Federal Communications Commission projected it would cost $350 billion to universally deliver 100 Mbps or faster Internet connections to all American homes and businesses, which would like Google's 1 Gigabit service would require fiber to the premise infrastructure. (Consider when the FCC issued this cost projection in September 2009, 100 Mbps was considered the gold standard for Internet throughput -- just one tenth of what Google fiber delivers.)

Assuming minimal change in the cost of deployment -- about 70 percent being labor -- that sizable sum would require Google to expend an average of $70 billion each of the five years -- $20 billion more than Google's reported revenues for 2012.  If this article's prediction were to become reality, Google would have to joint venture with other deep pocketed players since it alone could not hope to singlehandedly render the nation's cable and telephone companies obsolete in the span of just half a decade.

Thursday, April 18, 2013

Google chooses Provo, Utah, as next city to receive search giant's ultra-fast Internet service | Fox News

Google chooses Provo, Utah, as next city to receive search giant's ultra-fast Internet service | Fox News: The rollout is an expensive undertaking and gamble for Google, which hopes it will drive innovation and pressure phone and cable companies to improve their networks. Google benefits when people spend more time online.

The "pressure phone and cable companies to improve their networks" rationale is  repeatedly made in media accounts to explain Google's fiber to the premise (FTTP) builds in some metro areas of the United States.  But is it really true, notwithstanding AT&T's pyrrhic posturing in Austin, Texas?  It implies the incumbent cable providers and telcos are somehow reluctant to improve their networks.  But upgrading their networks is how they can capture more customers and sell more services.  If doing so generated sufficient revenues and profits, they would do it without hesitation, Google or no.  The issue is their business models don't have sufficient funding for large scale capital expenditures on new plant and equipment.  And no one has yet devised a way to more cheaply deploy fiber to the premise Internet infrastructure -- of which an estimated 70 percent of the cost is labor.

Another major issue overlooked in media accounts of the Google FTTP builds is they don't address the large gaps in Internet access that the U.S. Federal Communications Commission in 2012 estimated leave about 19 million Americans offline.  The reason they don't is Google shares the same limitations of the investor-owned business model as the incumbent cablecos and telcos that cannot profitably serve areas that remain disconnected and still accessing the Internet via obsolete, circa 1993 dialup connections and satellite Internet.

Saturday, April 13, 2013

Deterrence: AT&T launches pyrrhic war of mutually assured diminished returns against Google

On the heels of Google's announcement it will build fiber to the premise (FTTP) Internet infrastructure serving the Austin, Texas area, AT&T announced it will build its own 1 gigabit FTTP infrastructure to match Google's.

The announcement amounts to a declaration of pyrrhic war by Ma Bell, designed to impose diminished returns on Google since the economics of competing fiber infrastructures could drive down take rates and ARPU for each player. AT&T is sending a message of deterrence to anyone that dares to invade its sovereign service territory with FTTP infrastructure faces mutually assured prolonged ROI and potential losses.

Meanwhile, as Ma Bell and the Googlers engage in a war of attrition in a select few metro battlefields, much of the United States can and should pursue a more peaceful and sane alternative in municipal and cooperatively constructed and owned open access FTTP infrastructure. 

Wednesday, January 09, 2013

It's all about infrastructure, stupid

Council wants broadband minimum speeds redefined - News - The Charleston Gazette - West Virginia News and Sports -: State law now sets 200 kilobits per second as the minimum broadband speed, one of the slowest limits in the nation.

"It's nonsensical in this day and age," said Gale Given, West Virginia state government's chief technology officer.

Several council members suggested setting the minimum broadband speed at 4 megabits per second.

The Federal Communications Commission suggested that every U.S. household have a 4-megabit Internet download speed by 2020. The FCC determined that minimum speed would be sufficient to send and receive emails, download Web pages and use videoconferencing.

The entire debate and policymaking drill over "broadband speeds" is itself becoming obsolete the with growth in fiber to the premise infrastructure capable of 1 gigabyte and faster throughput.  To paraphrase the 1992 Clinton presidential campaign slogan, it's not about speed.  It's all about infrastructure, stupid.

Saturday, September 29, 2012

Google's Kansas City fiber build doesn't change underlying infrastructure economics

This Kansas City Star article discusses the implications of Google's rollout of fiber to the premise (FTTP) infrastructure in Kansas City.

The newspaper interviewed Josh Olson, a technology industry analyst for Edward Jones & Co.  Olson sees the Google fiber deployment as a template to boost user demand for higher bandwidth and speeds.  If new applications that can run on this gigabit speed capable infrastructure emerge, it would increase pressure for incumbent cable and telephone companies in other markets to upgrade their networks. However, Olson goes on to dismiss that notion, noting incumbent telcos and cablecos can make money off their existing services.  Of course they can when these are the only wireline services available to most U.S. homes and small businesses unless their communities build their own fiber networks operated by local governments or consumer cooperatives.

And as industry analyst Dave Burstein points out, Google's fiber deployment in a single U.S. city cannot change the underlying economics for incumbent providers that must earn a rapid return on investment to keep their shareholders happy -- a business model that directly conflicts with the long term ROI associated with high cost infrastructure projects.  Plus telecommunications company shareholders are accustomed to receiving high dividends -- money that can't be directed toward CAPex.

“The problem is it costs a lot of money to climb all those poles and dig all those trenches to make it happen,” Burstein told the Star. “You don’t make money in three years, but you make money in 10 years."

Read more here: http://www.kansascity.com/2012/09/24/3832330/google-fibers-gigabit-gamble-has.html#storylink=cpy

Friday, June 04, 2010

Google 1 Gigabit fiber stimululates interest in fiber infrastucture

When Google announced early this year it would build 1 Gbs fiber in a test market somewhere in the United States, it sparked a lot of interest. One outcome and side benefit is Google's gigabit fiber project got locals thinking about fiber-based advanced telecom infrastructure and how to do it themselves knowing that Google isn't going to deploy it everywhere.

Baltimore is one place that realizes that. Baltimore Mayor Stephanie C. Rawlings-Blake wants to explore how to expand high-speed fiber-optic Internet service to city residents with or without Google's help, according to this Baltimore Sun article, and has established a panel to look into it.

"We can't sit here and wait for a gift from Google to fall on us from the sky," said Tom Loveland, the city's volunteer Google czar. "This is our future we're talking about here. Those of us involved in the conversation have seen what other cities have already accomplished. These folks managed to get themselves wired without Google. If they can do it, we can do it, too."