Calix: CAF has its work cut out for it

The Federal Communications Commission (FCC) has established the Connect America Fund (CAF) to spur carriers to increase bandwidth penetration in rural areas. According to research FTTx equipment supplier Calix, Inc. (NYSE: CALX) has conducted, the FCC’s CAF customers have some catching up to do. During the first quarter of this year, more than 70 percent of rural broadband subscribers receive service slower than the 4 Mbps downstream called for in the CAF program. The news is even worse in the upstream domain, where more than 90 percent suffer with services below the CAF's target of 1 Mbps.

Calix unveiled the data in the release of its newest Calix U.S. Rural Broadband Report. Second in a series begun with a look at the fourth quarter of 2011 (see “Video drives broadband traffic confirms Calix study”), the report is based on traffic data from more than 50 U.S. communications service provider networks via the system house’s Compass Flow Analyze (formerly "Analyzer") software tool.

While some rural subscribers enjoy 100-Mbps downstream services – and 1-Gbps connections are also available in some markets – such connections tend to be more the exception than the rule. In fact, 60% of rural subscribers saw downstream speeds peak at 3 Mbps or less, according to the report.

Video remained the dominant traffic source, accounting for 64% of downstream Internet traffic. While this figure is 3% smaller than reported for 4Q11, upstream traffic in the quarter climbed dramatically, from 13% to 19%. Those taking services over FTTH networks loaded up on video, with such services accounting for 70 percent of the downstream traffic over such networks.

As was the case in the previous report, the latest edition of the Calix U.S. Rural Broadband Report highlighted the significant difference in bandwidth use between FTTH and copper-based broadband networks. FTTH-enabled subscriber endpoints generated more than 2.3X the downstream traffic and more than 2.4X the upstream traffic of copper-based subscribers. However, the traffic differences between the two broadband network approaches declined slightly in 1Q12, a fact Calix theorizes reflects the increasing use of VDSL2 technology, along with bonding and node vectoring.

Copies of the report are available on Calix’s site.