Richard Kendall: FTTH and a country’s overall high speed
broadband strategy is increasingly becoming a major political
issue
                                 
                              
Creating a viable network with enough bandwidth to enable community organisations to provide services such as telemedicine, e-Government and e-Education, is only one side of today’s broadband equation. For the general public to be able to make full use of these services in their own homes, however, the industry needs to bring greater bandwidth closer to them. And these applications are just the tip of the iceberg. In our increasingly app-obsessed lifestyles, home-based internet usage is burgeoning, from home entertainment, to online banking, social networking and remotely managed home security and energy management.
Businesses too, are using more and more bandwidth as they migrate some or many of their operations to cloud-based services, either externally or by centralising their own processes, into an internal, private, cloud. Bandwidth-hungry business applications, such as videoconferencing, file sharing and online storage and archiving, are becoming more and more prevalent. In addition, bringing the home and business worlds together, there is the rapidly growing popularity of teleworking. Individuals working from home and the businesses they work for both expect a high performance from the network that links them.
However it’s an inescapable fact that the demand for bandwidth is growing across all sectors of society. We can debate how much will be required and how fast this will happen for ever and a day, my personal view is that based on recent trends in take up of new technology and the way newer generations drive demand FTTH is the only viable solution.
FTTH and a country’s overall high speed broadband strategy is increasingly becoming a major political issue, perhaps the most extreme example of this is in Australia where FTTH was a major topic of the election campaign. It is hardly surprising that the political importance of FTTH is coming to the fore, when it is estimated that having an FTTH network can increase a countries GDP by over 2% pa and the ever pressing issue of the rural divide and how to resolve it is a hot potato governments need to address.
How governments approach the issue of implementing or facilitating an FTTH network is a subject in its own right, suffice to say there are many variations being seen, ranging from direct government intervention and funding, such as in Australia with government spending A$37 billion on a national network, to the UK where the government is putting aside £530m primarily to fund rural broadband and then leaving the rest to the private sector. An example of which is Fujitsu’s announcement of £2 billion investment to create a superfast broadband network that should reach five million homes within three to five years with network speeds of more than 1Gbps.
However it is done, by whom and when, building an FTTH infrastructure is one of the key issues a country will face over the next few years.
                          
                   
Home is where the apps are
                                        
The growing momentum of demand for in home entertainment and interactive use of services based on IPTV and video applications, with their demand for higher speed, better performance, and broadband is one of the key drivers for the deployment of FTTH. IPTV, HDTV and 3D entertainment services are all increasing rapidly and their widespread distribution will only become possible as and when FTTH is deployed for many people.
Conversely, lack of speed is seen as a major inhibitor for wider usage of such products and services. If the time to upload home video or high resolution digital photographs is still typically taking many minutes or even hours, it is unacceptable. Skype’s HD video calling, for example, requires at least 800 kbps of bandwidth in both directions, thereby putting it beyond the reach of users with a standard ADSL+ connection. In fact, providing decent quality, low-resolution video conferencing with accurate lip-synch is still a challenge over many residential broadband connections.
Key to this, as service providers gear up for the demand, is the question of how much bandwidth is truly enough. Nielsen’s Law of internet bandwidth suggests that a high-end user's connection speed grows by 50% per year, and this law appears to have been proven over the last 25 years. On this basis Nielsen’s data point for 2010 is a connection speed of 31Mbps. Applications are already envisaged that will consume more than 200Mbps of access capacity.
The marketing of broadband has typically focused on downstream bandwidth, but upstream bandwidth will become increasingly important as applications that require two-way video sharing become commonplace, and cloud-based services proliferate. Not only does FTTH offer the highest upstream data rates, it also opens the way to symmetrical services.
For operators there are some clear economic advantages in this: since customers who have access to better performance services through FTTH tend to subscribe to more services, significantly increasing operator revenues. A 2008 study on next generation service portfolios commissioned by the FTTH Council Europe showed that FTTH operators collected 30% more revenues per user because of this effect.
Utilities are also looking at how they can use communication networks to provide smart grids, using FTTH to overlay the power distribution network in order to collect data, manage appliances and control the flow of power from privately owned generators.
Another potentially key service for FTTH is connectivity to help deliver home-security services by enabling users to remotely monitor their properties by video, this is already been deployed in several markets. With the high speed FTTH enabling multiple, real-time video cameras. 
                                           
                                    
Bandwidth for business makes economic sense 
                                    
For businesses, the ability to bring fibre closer is becoming ever more pressing, as the applications – from videoconferencing to cloud computing - that need the broadband speeds that only fibre can provide continue to grow.
For businesses, and also for individuals, videoconferencing is developing as rapidly as additional services and bandwidth can become available. Many vendors are investing in new systems and applications to enable customers to use videoconferencing to interact with friends and family – as they already do on Skype and similar services, albeit with varying degrees of quality. These are also creating significant commercial possibilities across a range of fields.
Videoconferencing within the business environment reduces the need for travel and face to face meetings and is therefore attractive to businesses for a range of situations, from meetings and briefings to training sessions and seminars. Videoconferencing in hotels is also a growing market.
A recent US study highlighted 50% more FTTH users have worked from home than those with DSL and that they are working two days per month more their DSL counterparts. The further benefits of this can be seen in times of bad weather, in the UK in 2010 it is estimated that the cost of workers not being able to travel was £600m an FTTH network would have reduced this substantially.
Many operators are beginning to offer packages of services around video conferencing and video on demand. Cisco for example has a suite of solutions called Videoscape - a service provider solution that allows consumers to bring together content from pay TV, online, and on-demand sources. They can then combine content with social media, communications, and mobility to create a truly immersive TV experience.
As businesses look to control and optimise both their capital and their operating expenditure using a combination of internal and external or cloud-based services for their IT and communications, many new applications are evolving, based on new ways of working and interacting with each other. Examples include file and application sharing, especially amongst communities, and common interest groups, on a peer-to-peer basis and sling box (place shifting), which allows the individual to control access to media wherever they are.
Another area is in the use of online storage and back-up, ensuring business continuity and disaster recovery for businesses. As businesses generate more and more data, a 100 GB hard drive would be considered small by today’s standards and centralised storage and archiving gives greater scale and security of data. However, uploading just half that amount of data could take over 200 hours using a high-end ADSL connection, whereas fibre connectivity allows this to be done in a fraction of the time. 
                                    
                                    
Socio-economic benefits 
                                    
An FTTH network brings many other benefits and is an enabler for considerable social and environmental enhancements. These benefits are already being seen in action in early adopter countries, such as Holland and Sweden. Some of the most clearly identifiable economic benefits include the boosting of economic growth and increasing the competitiveness of businesses in the community. Added to this is the ability to attract new high value businesses, especially in rural areas, together with increased efficiency in the delivery of public services, including education, local Government and healthcare. This enhances the overall quality of life of the community’s citizens, by increasing the opportunities for communication and reducing traffic congestion and pollution, offering substantial environmental benefits, notably through teleworking, with fewer miles travelled and reduced air travel.
A number of studies have observed a statistical connection between higher broadband adoption and an increase in economic prosperity, both locally and nationally. The Columbia Institute for Tele-Information (CITI)’s quantitative analysis of the macroeconomic impact of investment in broadband infrastructure in Germany, for example, has estimated – amongst other things – that the impact on GDP will amount to some €171 billion between 2010 and 2020, that is 0.6% of annual GDP.
FTTH networks are undoubtedly becoming a fundamental foundation of all modern societies, bringing benefits across all aspects of life and for all ages. New ways of working and living will continue to evolve, with enhanced healthcare and education, environmental benefits. Businesses, in particular, will benefit by being able to offer new services and the faster broadband that it enables will allow businesses and individuals, communities and Governments to interact in new ways.
Operators and service providers have the opportunity to shape how these trends are realised and, in so doing, create new revenue streams for themselves. GTB
                                    
Richard Kendall is managing director of Nova Incepta