Blog Post

Why Every ISP Needs a Fiber-to-the-Home Network

Even though we’re inching ever-closer towards consumption-based broadband, not all ISPs are implementing metered or tiered plans as a way to punish users who clog their pipes. For example, Verizon (S vz) plans to may one day move to a consumption-based model as a way to generate additional revenue, not because of any network constraint. Brian Whitton, executive director of access technologies at Verizon, spoke with me earlier this week about that company’s fiber network — and why he believes every other ISP is going to have to embrace a fiber to-the-home strategy, too:

  • Personalized Video: As video moves from broadcast to a time- and place-shifted model that lets consumers watch what they want, when they want, sending televisions shows out on demand in a unicast model will overwhelm cable networks.
  • 3-D TV: Depending on the technology consumers adopt (GigaOM Pro, subscription required), sending 3-D video content for games and television could consume up to 1.8 times a normal video stream for autostereoscopic delivery, while true holographic TV, which is the eventual goal, would require 100 Mbps per channel.
  • Upstream Video: “I think in this whole marketplace of video that oligopoly [of content creation] is deteriorating and HD camcorders and codec tools will lead to different TV programming coming from the masses,” Whitton said. Thanks to YouTube, anyone can create their own content and send it up, so personalized channels are not unrealistic. Whitton said the result will be a burden on the uplink that cable companies can’t current handle.

Despite the trash talk directed at cable companies by Whitton, the companies with the most to fear right now are those relying on copper networks such as Qwest (s q) and AT&T (s T), both of which have put their money behind a fiber-to-the-node strategy, which takes fiber out to the existing node and then relies on existing copper wire to get to the home. The cable providers are able to bundle their channels together to provide faster up and downstream access using DOCSIS 3.0, but extracting more performance and speeds from copper is difficult.

That’s not stopping the telcos with copper still in the ground, which is why ASSIA received $10 million in funding recently for its software that helps tweak DSL networks, and why folks are still funneling money into research that boosts copper performance. At some point the telcos are going to have to take a hard look at their aging infrastructure and decide how much longer they should poor money into copper, much like you or I might do when evaluating whether or not to fix or junk a 12-year-old car. In the meantime, I have to agree with Whitton — eventually everyone will need a fiber to their home.

11 Responses to “Why Every ISP Needs a Fiber-to-the-Home Network”

  1. Brett Glass

    Stacey, your story is filled with language that falsely ascribes malice to ISPs. ISPs are not interested in “punishing” users who consume a lot of bandwidth; we merely need to recover the cost of that bandwidth. That’s only fair. Bandwidth isn’t free, you know; in fact, in our ISP’s case it is quite expensive.

    It is also fundamentally incorrect to state that fiber to the home is necessary. Remember, fiber is nothing but wireless in a tube — a tube that’s extremely costly both to buy and to bury in the ground. Wireless can easily satisfy users’ bandwidth needs.

  2. Gregg Smith

    It’s hard for me to make a business case for FTTH for my board (rural service provider) if the FCC is seriously considering open access rules. Many didn’t apply for stimulus money for that reason. Why invest our own if we have to compete with our own network?

  3. David Garganta

    Stacey, if you believe Verizon doesn’t have potential network capacity issues you have been spun hard. All networks have choke points. Yes, FiOS has a ton of freakin’ capacity but ultimately there is a finite amount of bandwidth that is available to any given neighborhood or groups of homes.

    • Where do you see a defense of Verizon above? You’re right that bandwidth is finite, but it is far higher with fiber than coax or twisted-pair copper – no matter who owns the cabling.