Fiber Broadband Industry Group: FTTH stimulus projects now moving forward

Three-quarters of the broadband stimulus-funded projects to create or expand all-fiber networkshave now broken ground or are on the verge of doing so, according to the Fiber-to-the-Home (FTTH) Council’s survey report.

Three-quarters of the broadband stimulus-funded projects to create or expand all-fiber networks have now broken ground or are on the verge of doing so, according to the Fiber-to-the-Home (FTTH) Council’s survey report.

The report, prepared for the Council by market analyst firm RVA LLC, estimates that construction has begun on 38 percent of the FTTH projects funded by the American Recovery and Reinvestment Act, whereas another 36 percent are actively preparing for construction to begin. Most of the remaining projects are in some stage of engineering or environmental impact evaluation, says a spokesperson.

Today's report also revealed that 7.1 million North American homes are now receiving Internet, video, and/or voice services and meter reading over end-to-end fiber networks--up from 5.8 million a year ago--as telecom providers continue to upgrade their last-mile connections from copper to fiber. FTTH networks now pass nearly 21 million homes on the continent, up from 18 million a year ago.

RVA President Michael Render expected the recent increase in stimulus-funded project construction activity would lend to an overall uptick in FTTH deployments and connections in 2011, with the economic recovery and recent announcements of large FTTH projects in Canada also contributing to the rise.

The increase would come after a moderation in the growth rate of FTTH network deployment over the past two years, with the increase in the annual number of new homes passed dropping to roughly three million in 2009 and 2010 after reaching more than four million in 2008. Render attributed it to: the combined effects of the recession, a slowdown in FTTH network construction by the largest U.S. deployer Verizon as it approached its project targets, and what he called the "unintended consequences of the stimulus legislation."
"We have found in our surveys over the past two years that quite a number of FTTH builds were put on hold while the stimulus program was sorted out and the network operators got a clearer picture on whether their projects would be funded," says Render. "That is all behind us now and our latest survey results are indicating that most FTTH projects are now going full speed ahead."

RVA estimates that more than 770 entities are now providing FTTH services in North America, 61 percent of which are small and mid-sized independent telephone companies. Another 13 percent are competitive broadband providers, 11 percent are municipalities or public electric utilities, 10 percent are associated with real estate developments, and four percent are cable television providers.

In its survey, RVA also found that 70 percent of FTTH providers are "very likely" to continue to build out their FTTH networks to reach more subscribers.

The RVA report also revealed: FTTH providers are beginning to more aggressively differentiate their Internet offerings from DSL and cable modem competition with high-speed offerings that are often the same upstream and downstream. Recently, Google announced it would build an FTTH network providing 1-gigabit connectivity in Kansas City, Kansas.

"Given the enormous and widespread interest we are seeing in next-generation connectivity, it is not surprising that, as the recession fades, telecommunications providers across North America are resuming their onward march toward all-fiber access," says Daniel O'Connell, the FTTH Council's president. "With emerging HD video, 3D video, and other applications in areas like tele-health, distance learning, and cloud computing, most telecom providers recognize that they will have to upgrade to FTTH in order to keep pace with the ever-increasing consumer demand for more bandwidth."
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