FTTH: Fiber To The Home

Since the first installations of fiber optic networks in the late 1970s, the goal of the fiber optic industry has been to install fiber optics all the way to the home. Telecommunications systems were usually divided into long distance, metropolitan and subscriber categories. In the beginning, the challenge was well known - 10% of the cable plant was in long distance, 10% was in metro and fully 80% of the cable plant was the "last mile" - the subscriber. The issue was, and is, the economics of fiber to the home (FTTH.)

From an economic standpoint, fiber was immediately cost effective in the long-distance networks. Compared to copper or digital radio, fiber’s high bandwidth and low attenuation easily offset its higher cost. Compared to copper wire used in telephony, fiber could carry thousands of times more phone conversations hundreds of times further, making the cost of a phone connection over fiber only a few percent as much as transmitting over copper.This photo was used many times in the early days to illustrate the information carrying advantage of optical fiber:

It took only a few years before the rapidly advancing technology of fiber optics led to widespread use and fiber quickly dominated the long distance market. Crews buried cables underground or ran aerial cables on poles nonstop for a decade to upgrade long distance service. At the same time, technology was developed for submarine cables and by the late 1980s, all overseas communications expansion was done by fiber optics, replacing copper cables and satellites. Today, virtually all long distance communications is carried over the installed fiber optic network both on land and via hundreds of submarine cables as shown below.

The next step was connecting local central offices, the link between subscribers and the switched phone network. Around the time the long distance networks were being completed, consumer use of the Internet took off. It was the Internet that drove the communications revolution by connecting anyone with a PC to a worldwide source of information and communication and forced the expansion of fiber into communications networks. Metropolitan phone networks became overloaded quickly and fiber optics was ready to provide the expansion capability. The scope of metropolitan fiber optic installations was obvious to anyone driving around almost any town, as it was hard to drive anywhere without encountering roads torn up for the installation of conduit and fiber optic splicing trucks blocking the roadways.

While telecom companies were building out their backbone networks, CATV companies benefited from several technical developments. The Internet created a need for high speed "broadband" networks. A way of using CATV networks for Internet access using the frequencies from several TV channels was developed leading to the cable modem. And finally the DFB laser capable of converting CATV analog signals to optical was developed to allow companies to build a hybrid fiber coax CATV network. CATV companies ran with the idea and began offering broadband Internet service in 1997, jumping ahead of the telecom networks to become the dominant broadband providers.

Then the telecom/Internet "bubble" burst in 2001. The Internet “bubble” that caused the telecom “bubble” and thereby the fiber optic “bubble” caused the downfall of a tremendous number of companies and left the industry with a glut of both installed fiber backbone capacity and fiber optic component manufacturing capacity. In a good illustration of economics at work, the cost of fiber optic components took a nosedive as supply outstripped demand. Since the market bust, fiber and component prices became very cheap. One analyst compared fiber prices to kite string and fishing line, both of which are more expensive than the current prices of top quality optical fiber. That set the stage for the next big application for fiber optics.

Many homes today are still connected with aging, low-performance copper telephone wire that cannot support DSL connection speeds that allow the phone companies to compete with the cable modems used by CATV companies for broadband access. These aging phone lines not only cannot carry high bandwidth digital signals, they are extremely expensive to maintain just for POTS (plain old telephone service.) Savings in maintenance alone were projected by a 2005 Telcordia report to pay back the cost of installing fiber in under 20 years, irrespective of revenue from new services.

One problem with converting homes from copper to fiber was the immense size of the task. Long distance cables represent about 10% of the telecom network. Metropolitan networks represent another 10%. But the connection to the home, traditionally called the "last mile," represents about 80% of all the cabling in telecom, making conversion of copper to fiber to the home a massive task.

Besides component prices dropping as a result of oversupply, new network architectures have been developed that allow sharing components for FTTH that further reduces cost. A passive optical splitter that takes one fiber input and connects bi-directionally to as many as 32 users cuts the cost of the links substantially by sharing, one expensive laser transmitter with up to 32 homes and reducing the number of fibers needed. This is what is called a PON network, or passive optical network.

Each home needs to be connected to the local central office or head end with singlemode fiber, through a splitter generally placed close to the homes connected to it. Every home will have a singlemode fiber link placed underground or aerial to the cables running down the street and a network interface device containing fiber optic transmitters and receivers will be installed on the outside of the house. The incoming cable needs to be terminated at the house, tested, connected to the interface and the service tested.

So fiber has now gained acceptance in the final frontier of telephone networks, the “last mile”—the connection to the home. Phone companies are now realizing the only choice for upgrading the subscriber connection is fiber to the home (FTTH). Service providers have committed billions of dollars to connecting millions of home with fiber.

With FiOS in 2006-7, Verizon became the leader in the US in FTTH, but the US trails many other countries around the world in converting to FTTH. Progress requires massive capital investment and training lots of people to install FTTH, or FTTP (fiber to the premises as they call it.) Besides the telcos, several other groups are installing FTTH. National governments: Countries with a national telecom policy usually favor FTTx for their national broadband networks. In 2021, the highest percentage of users connected on FTTH was in UAE where Etisalat has connected virtually all homes (Etisalat is an FOA approved school also.) Some homes may be connected with fiber, but where FTTH is too expensive, wireless or satellite connections may be preferred. Even the CATV companies are considering fiber to replace aging coax, since the price is right and performance unlimited.

Municipalities: Some of the first FTTH systems were installed by cities - progressive ones like Palo Alto, CA did it at the request of their high-tech citizens, some did it to entice businesses to move there, like Anaheim, CA some did it (or are trying to) because they were not pleased with the service of telcos or CATV companies. The latter often found the telcos or CATV companies to be formidable opponents who did not always play fair! Most municipal FTTx projects use rights of way available to the city through city-owned utilities such as Chattanooga, Clarksville and Jackson, TN which offer 1Gb/s FTTH already.

Google Fiber made municipal FTTH popular by having a competition for a city to get Gigabit FTTH installed by them - and Kansas City won the competition but many other cities decided they wanted fiber optics anyway and they are now running their own networks. Google fiber had many successes and some notable failures but they convinced many other organizations to commit to gigabit broadband over fiber.

Utilities: Owning rights of way to the home convinced some utilities to try FTTH or FTTC. Ethernet over power lines was once considered an option for power companies ton use power lines for the final connection to the home, but the technology was inadequate. FTTx is even becoming real for many customers through electrical cooperatives. The best example of a utility-owned FTTH network is the EPB system in Chattanooga, TN.

Private companies: There are private companies that will build municipal FTTH networks under an agreement with the city, similar to CATV agreements. In addition, some contractors and real estate developers building subdivisions or apartments are installing FTTH so they can connect with telecommunications companies for services to resell.

Google Fiber is certainly the largest and best known of the private FTTH networks. Google started in Kansas City, then added Austin and Provo, Utah and began adding up to 34 other cites to their service areas. What Google appears to have learned from Kansas City was when the city is cooperative, FTTH is relatively cheap to install (KC numbers have been quoted as low as <$500 per customer) and provides a constant stream of high margin income.

As of 2021, there are thousands of FTTH projects around the world. Many are being done by telecom companies like Etisalat. Cities, counties and even states are building fiber optic networks to serve citizens. Real estate developers are building FTTH networks because the cost is lower than a upgraded kitchen, helps sell houses faster and brings much more profit. Even venture capital has begun investing in FTTH networks for the potential return on investment.