Will Google shame the big carriers into providing amazingly fast fiber-to-the-home Internet service? You bet, at least if you believe the press coverage, including a post here at InfoWorld. After all, who wouldn't want gigabit Internet at a reasonably affordable price instead of pokey old DSL or shared cable connections? But you won't get it.
In case you forgot, the big carriers are in the game to make money, and bringing fiber to the home is prohibitively expensive. How much so? According to the FCC, a typical deployment costs the provider a minimum of $2,500 and often as much as $5,000 per subscriber. Those costs are why Verizon quietly backed away from its fiber-to-the-home plans.
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Because we're getting close to Christmas, I don't want to play Grinch, so I'll deliver some good news as well. Although fiber to the home is a nonstarter, an alternative, hybrid technology that delivers speeds much faster than today's cable and DSL connections at a price the carriers can afford is gaining traction.
Fiber to the node: A cheaper way to increase speed
You've probably seen ads for AT&T's U-verse Internet service. Its top-tier package offers speeds of up to 45Mbps, which is roughly 10 times faster than the average DSL service in the United States and twice as fast as the average effective speed of most cable connections (despite what the cable companies claim).
Although AT&T's marketing folks like to call U-verse fiber to the home, it's not. Instead, it's a hybrid technology, called fiber to the node, or FTTN. It features fiber to the cabinet, a kind of a switch box you'll see in many neighborhoods, coupled with DSL over existing copper wires from the cabinet to the home or office.
Unlike cable connections, which are shared by the subscribers in a neighborhood, FTTN is not shared, so it doesn't slow down during peak usage hours. FTTN can be boosted, using a technology called vectoring, which optimizes the existing transmission capability of the copper wires that run from the cabinet to the customer by canceling radio noise and other interference. When vectoring is applied to FTTN, speeds can nearly double.
In early November, AT&T announced a $14 billion program to upgrade its wired and wireless network. The project includes plans to add vectoring technology and FTTN to its wired network. When in place, U-verse's top speeds should increase to about 75Mbps and climb even higher in the future, AT&T claims. The cost per subscriber for the upgrade is about $300 to $500, says Steve Timmerman, senior vice president of ASSIA, a performance management company that holds key patents related to vectoring. That's a lot cheaper than the $2,500 to $5,000 needed to put in a new fiber-to-the-home network like Google's deployment in Kansas City.
Here's more proof that the economics of upgrading an existing network make much more sense than launching an all-new system: In early November, Germany's Deutsche Telekom also announced plans to upgrade its network with vectoring and FTTN. According to the Wall Street Journal, Japan's Bank Nomura estimated the cost of vectoring, including the network adjustments required to do it, at about €4 billion. That compares to €80 billion to deploy a glass-fiber network across Germany.