FTTx: Three considerations for deployment planning

Fiber may be the most effective way to deliver high-speed bandwidth, but three main FTTx deployment considerations for service delivery will affect each provider's cost/benefit analysis. Find out what network operators need to consider in selecting a solution that offers the best ARPU for their population density and content choices.

Einstein supposedly said, "Everything is relative," but he never did. If he had known about the questions swirling around "FTTx," he might have been tempted to use the expression.

Fiber deployment is a trade-off driven by the cost of the service relative to the potential revenue per subscriber.
Tom Nolle
presidentCimi Corp.
Because in a strict sense, all FTTx means is "fiber to somewhere," and where that might be is, well, "relative."

Fiber is the most effective way of delivering bandwidth ever devised. A single fiber strand can carry 200 or more wavelengths of 40 gigabits each, enough to feed a whole community.

But while fiber proves quite economical for city-wide demand, it's harder to make it cost-effective when you apply it to smaller collections of users, especially down to individual households. A trunk fiber may have 200,000 people paying their share, but fiber to the home (FTTH) goes to only one residence. Obviously, fiber deployment is a trade-off driven by the cost of the service relative to the potential revenue per subscriber.

Three factors help determine fiber options

When service providers plan how far to take fiber into their geographies, the answer is largely determined by three specific factors:

  1. The economic density of the service area. A mile of fiber passes a specific number of houses and businesses, which translates to a specific number of potential revenue dollars, based on a combination of population and wealth. Geographies that are economically dense include many major Asian markets. These locations can get substantial return from any access investment and thus tend to support fiber very close to the home -- FTTH or fiber to the curb (FTTC).
  2. The extent of existing current fiber/copper wiring. Wiring junctions are fixed -- you can't move them around without pulling up all the copper and fiber again. Therefore, it is easiest to serve a given area by following the current conduits and loops and staying with the rough topology of the old installation. If you can't run fiber close to -- or directly to -- the home, the most logical place to take it is to the node where the loops currently collect (which is fiber to the node, or FTTN).
  3. The total value of the services you're offering over fiber. The more money you can make, the faster the payback on the investment. Because television is the most lucrative residential application, offering TV service is critical to creating the largest average revenue per user (ARPU).

Overall economic density is hard to change, so network operators need to understand the intrinsic limits of their own service area in their initial planning. Most countries have some form of "universal service" that will prevent providers from cherry-picking prime neighborhoods for deploying high-performance fiber-based services. While the rate of return may vary substantially by neighborhood, the overall service geography must be suitable for the service mix being considered.

Serving up video -- a complex calculation

Video is the biggest issue here because a fiber-to-the-home deployment, or even fiber-to-the-curb with a CATV/MoCA link to individual nearby homes, allows delivery of broadcast channels using RF over fiber (also called RF over Glass, or RFoG). This is a proven model in the cable industry and creates the least access bandwidth load for video -- zero for broadcast, so only VoD is carried over IP. If FTTx can mean "home" or "curb" with CATV feeder, then telecoms can plan data bandwidth for Internet and video on demand (VoD) alone to reduce metro expenditure.

For more information
PON evolution presents provider planning choices 

IPTV driving hopes for revenue, but one size doesn't fit all

Network modernization in an optically dominated era
Today, most FTTC/FTTH would probably be based on passive optical networking (PON) technology, creating an average of 32 leaves on the PON tree. This would serve 32 homes with FTTH, or four to eight times that number using a PON/CATV hybrid similar to the cable RFoG model.

As density of demand is reduced, the spread of the PON tree increases, and eventually FTTN/FTTC becomes uneconomic. The solution for that is FTTN, using some form of DSL over the copper loop for the "last mile" connection. The difficulty is that the "mile" is likely to be an optimistic assumption of the distance that needs to be supported.

First, the length of the current loops will probably set the topology of the outside plant. Newer subdivisions are provisioned with digital loop carriers fed by fiber, and for these, the typical number of homes per node is kept small and the loops kept short. If loops are less than about 3 kilofeet, downstream bandwidth of at least 50 Mbps is possible, and with lengths of less than about 12 kilofeet, 25 Mbps can be achieved.

Standard-definition channel delivery vs. HD

Video again is the issue here. There is clearly no chance of sending 300 channels over copper loop, so a slot-mapping mechanism is used, where the access DSL has multiple slots into which channels are dynamically mapped. A standard-definition channel requires about 4 Mbps, and a high-definition (HD) channel requires at least double that amount. Four or five standard-definition channels or two HD channels are the limit for longer loops, and current trends in TV viewing suggest that this would not be sufficient for many households to view the material they want to see.

The transition to HD will create a challenge for longer-loop installations, and even an Internet-only DSL connection limited to 25 Mbps will fall short of what cable competitors can offer with DOCSIS 3.0. Many operators are looking at a hybrid service that combines satellite broadcast with DSL VoD as a means of addressing video and Internet opportunities on longer copper loops. Where loop length is 3 kilofeet or less, IPTV's channel-slot model appears to be competitive.

Loop lengths beyond about 12 kilofeet are likely to be problematic for broadcast video, even in standard definition. And where a service area has a considerable percentage of the loop plant in this category, a hybrid video model with satellite may be the best solution. Competitors like cable operators are also challenged by very low population density, and so competitive pressure for higher access speeds will be reduced.

Regulatory considerations for fiber deployment

Regulatory factors also must be considered in deciding how far to take fiber. The best approach is to begin with a service plan that spans the operator's complete geography and offers reasonably comparable services but presumes no specific delivery architecture for a given area. Then the decision on FTTN/FTTC/FTTH can be made based solely on the density of each neighborhood, and there is less chance that regulatory problems will arise. Where "universal service" means the same deployment technology for everyone, the cost of supporting the service in the entire geography will have to determine which fiber choices are economically viable.

About the author: Tom Nolle is president of CIMI Corporation, a strategic consulting firm specializing in telecommunications and data communications since 1982. He is the publisher of Netwatcher, a journal addressing advanced telecommunications strategy issues. Check out his SearchTelecom networking blog Uncommon Wisdom.

This was last published in March 2009

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