Ive got to be more careful about what I put in these editorials.
I`ve got to be more careful about what I put in these editorials.
Stephen M. Hardy
Editor in Chief
As some of you may recall, I used this space last month to whine about the trouble I had encountered in acquiring phone and cable-TV service at my new house. (I finally have dial tone, thank you. However, I`m still relying on rabbit ears to pick up the four television signals that reach my corner of rural New Hampshire.) In a desperate attempt to save face with my telecommunications peers, I offered both my new neighborhood and my home as a "developing market" for fiber in the local loop and within the home itself.
No sooner had the U.S. Postal Service and its compatriots overseas carried the August issue on their appointed rounds when I received the following e-mail:
Just finished your article. I`ve had successful entrepreneurial businesses and am looking to start something else. Do you really believe there`s a reasonable chance for economic justification of fiber in areas like your home or were you kidding? I would be starting from the get-go with no prior experience (but ample $ I think) which is how I got other businesses going. Please advise. Thanks.
Well, I always do my best to answer inquiries from readers (particularly those with "ample $$"). So I immediately pulsed a few sources to find out how they were handicapping fiber, both to the home and in the home, as a business proposition.
"Fiber-to-the-home we think is viable," said John Montgomery when I put the question to him. Montgomery is chairman of ElectroniCast Corp., a market research firm in San Mateo, CA. "For someone who is a new entrant into the marketplace of broadband services to the home, fiber-to- the-home makes a lot of sense," he explained.
The appellation "new entrant" is key to Montgomery`s thinking. He explains that many companies with a history of activity in the services provision market will have existing twisted-pair and coaxial-cable facilities that they`ll want to leverage. "But if you are a new entrant who has to install your own cable anyway--which isn`t as dramatic an economic undertaking as a lot of people make it out to be--then it costs you very little more to take fiber to the home than it does to take either coax or twisted pair to the home," he added.
So would he recommend that my reader jump into the fiber-to-the-home business? "I`m not too sure somebody working out of their garage hoping to make connections to a thousand homes would necessarily make a go of it," he cautioned. "But I think AT&T will make a go of it whenever they tackle it. And I expect we`ll see other interexchange carriers that now exist going in that direction, and ultimately new carriers [as well]."
Meanwhile, Traver Kennedy, who examines telecommunications issues for the Aberdeen Group of Boston, MA, responded enthusiastically to the potential of fiber-to- the-home. "Absolutely!" he exclaimed when I read him the e-mail. Like Montgomery, Kennedy said that technology advances had dramatically reduced the cost of connecting homes to fiber networks. He pointed to the work of Next Level Communications, which is wiring residences and businesses in New York and Boston under a contract from nynex, as an example of how homes could be wired to fiber networks at a cost comparable to stringing copper.
"It really is an exceptional opportunity--and this guy could actually use their technology to do it," he surmised.
Neither gentleman shared such high opinions of fiber`s promise in the home, however. "Fiber-in-the-home we don`t see as a near-term--meaning in the next two or three years--significant commercial market," said Montgomery gravely. The bandwidth demands just aren`t there, he said--and won`t arrive until fiber-to-the- home gives residential users a taste of what they might be missing.
"Fiber-in-the-home is a little bit of a different animal," Kennedy agreed. Besides demand issues, technical hurdles still need to be overcome. "The question, of course, is how you go from a photon to an electron," he explained. While such interfaces for PCs exist today, similar hardware for other residential equipment remains over the commercial horizon.
So, gentle reader, to could be a yes, in is probably a no. And if you want to send some of that ample $ my way for this service, my address is to the left. q