by Geoff Daily
September 8, 2004

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Streaming via dialup can be done, but what use is blurry, jerky, thumbnail-sized video? Broadband is a step up, but still doesn’t provide the bandwidth needed to deliver high-quality, full-screen streaming video. For that, you need a fat pipeline, and, thanks to the cable-laying fever of the Dot Com Boom, there’s plenty of fiber optic backbone to support large-scale "ultrabroadband," say fiber optic advocates. Those advocates have a "chicken in every pot" vision of universal ultrabroadband implementation in the U.S., and the beginnings of a roadmap to getting there. But even those fiber optics proponents most closely allied with the technology itself agree that traversing the "last mile"—getting from the backbone into users’ homes—has proven to be a challenge without a quick and easy solution. "The backbone was terribly overbuilt," says Fiber Optic Association (FOA) president Jim Hayes. "Ninety-three percent of all the fiber that’s been installed is still unused."

The term "ultrabroadband" doesn’t have a definite meaning—except perhaps among the fiber optic set—nor is there a standard agreement as to how much bandwidth the average home user needs to experience what Internet streaming can do. In a 2003 BusinessWeek interview, tech entrepreneur Mark Cuban was quoted as saying, "If there's a disrupting technology I could envision 20 years out into the future it would be ultrabroadband to the home. Once we hit 500Mbps, 1Gbps, then we'll see our lives change." Others say such speeds aren’t necessary, suggesting that to stream standard-resolution video to a television on a shared household Internet connection would require 20Mbps, while hi-def could need 50Mbps or more.

Successful business models that take advantage of broadband’s capabilities have only begun to take hold in the last year or two, which is why much of the technological innovation in solving the last-mile bottleneck of Internet connectivity has been focused on methods that compete with DSL or cable. These include ADSL, BPL, satellite, and WiMAX (see sidebar, "Broad but not Ultrabroad" ). Another technology, free space optics (FSO), offers a wireless laser-based system for data transfer and may supplement fiber optic delivery, but it’s still expensive and has limitations of its own (see sidebar, "Free Space Optics" ).

To achieve even the lower ultrabroadband speeds (up to 50Mbps), the only currently viable technological solution is laying fiber optic cable. Fiber-to-the-home advocates envision a fiber optic cable going directly into homes and offices. But even that’s easier said than done due to a potent political cocktail of land rights issues, cable ownership, territorial cable and phone companies, and just generally too much "lawyering," as Hayes puts it. Some of the carriers actually laying the cable hope instead to just get fiber close to the buildings and then allow VDSL to provide the 20 to 50Mbps into the home. VDSL, known as very high bit-rate DSL, enables 52Mbps downstream and 16Mbps upstream over copper cables, but its range is limited to only about 4,000 feet. Fiber-to-the-curb proponents envision fiber optic cables running near, but not to, homes and offices, with VDSL bridging the last hundred yards rather than the last mile.

The future viability of full-screen, high-quality streaming media hinges upon the widespread availability of sufficient bandwidth, as well as the business models necessary to make it all profitable.

Laying Cable
To solve the last-mile bottleneck and take consumer Internet access speeds to the next level, fiber optic cable needs to be installed to or near the majority of homes in the United States, ultrabroadband proponents say. But even the technology’s most avid supporters acknowledge that trying to do so is a logistical nightmare. Simply getting permission to dig the trenches necessary to put the cable in the ground may prove an impossible task, especially in established and/or urban neighborhoods, which is why most homes with a fiber optic connection are new builds.

Verizon has begun a cable-laying campaign in Texas and is currently offering up to 30Mbps service. According to Hayes, Verizon’s current plans call for reaching 500,000 to a million homes by the end of the first year. Verizon’s president has made known his intentions to roll out fiber optic connections to every home and business in its 29-state territory over the next 10-15 years.

But Hayes isn’t sure if a mad dash to lay cable is the best way for telecommunications companies to try and catch up with cable providers, who have built an impressive lead over DSL in bringing broadband to the home. He believes that they need to change their state of mind. "The telcos were the railroad companies of the 21st century," says Hayes. Some of what led to the demise of the railroad companies, he argues, was their obsession with laying track, rather than focusing on the idea that they were transportation companies. "Telcos have the same problem; they focus on their infrastructure," says Hayes. "To be in the world market 20 years from now, they have to understand communications."

That said, recent FCC rulings could encourage this emphasis on infrastructure. The Telecommunications Act of 1996 forced companies that owned copper telephone cables to provide access to their lines at discounted rates to competing companies. This led to a marked increase in telephone services competition, eventually resulting in lower prices for consumers. In a recent review of this legislation, the FCC decided that companies that lay fiber optic cable will not be required to give access to other firms that want to offer services on their fiber optic networks.

The FCC’s justification for this relies on the perception that the growing variety of broadband solutions will provide sufficient competition to fiber optics. What it doesn’t account for is the quantum leap in speed that fiber optics represent, arguably, and how that bandwidth could become the foundation for lucrative media distribution networks that may not be possible via slower connections. This ruling could conceivably create a series of local monopolies, especially if, as Hayes claims, "whoever puts fiber to the home first will be the last."

The battle over who gets to be the gatekeeper has been fought vigorously by cable and telcos alike, Hayes recounts. Rockford, Illinois "tried last year to pass a referendum to lay fiber to the home," says Hayes. "The cable TV company spent $600,000 to get this killed." According to Hayes, cable and telecommunications companies, who would be shut out of infrastructure ownership as a result of local government’s taking the initiative in setting up their own fiber optic networks, have launched public relations campaigns against some cities’ fiber optic projects. Or they just bring the issue to court (what Hayes calls "excessive lawyering") by raising the specter of potential cost overruns and questioning the ability of cities to manage such large-scale projects. Another example of Hayes’ reference to excessive lawyering comes from Hollywood, where copyright owners are still wary of how ultrabroadband might feed what they see as the rampant piracy of their content.

With cities across the country looking into sponsoring fiber initiatives, a handful of companies, including the Merton Group and Wave7 Optics, Inc., are assisting these cities in a way that’s akin to the early days of cable. "They’ll finance [fiber optic initiatives], put it in, and then pay the city," says Hayes. While the city won’t own the network, he also says it won’t cost them anything. "Plus they get the advantages [of fiber] without having to deal with the local phone or cable companies."

Even though only the government has the power to embark on a nationwide fiber optic campaign, Hayes strongly speaks out against much, if any, federal government involvement in getting cable into the ground. "There’s virtually no technical knowledge in the government," he argues. "Secondly, it’ll be politicized. The [federal] government is the absolute worst group you could have doing this. Leave it to local governments. The best possible way to do it is take it to the lowest possible level of the government."

The South Korean Model
On the other hand, in countries like South Korea, national government has played an integral role in dramatically increasing the number of homes with access to fiber optics. In the mid-1990s, Korean regulators set goals for broadband adoption: all big office and apartment buildings had to have a fiber connection by 1997, 30% of all households would have access to broadband through DSL or cable lines, and by 2005 more than 80% of households would have access to 20Mbps connections or faster, according to CNET.

Nowadays, the average South Korean residential user has ready access to 8-10Mbps Internet connections for the same relative cost as DSL or cable. The government has also spearheaded a $24 billion initiative to link all government facilities and public institutions with a national high-speed fiber backbone. Internet training was made available to those who may have been left behind in the digital age, CNET reported, including stay-at-home moms and disabled citizens. To encourage investment in bandwidth, the government set up a certification program to rate buildings based on the quality of their data lines; the more robust the connection, the more a developer can charge for rent—Internet access is increasingly being bundled into rent.

It should be noted, though, that South Korea did have a pair of significant advantages over many of the countries who wish to use their success as a model for future initiatives. First off, 70% of South Korea’s population is concentrated in seven large cities. Second, Kepco, the public power utility, had already laid miles of fiber optics years earlier for its own purposes.

In the end, it will all come down to content providers’ giving content consumers a reason to want and/or need super-fast connections to the Internet, even if those connections don’t yet exist. "Until somebody comes up with a way of offering something like pay-per-view in a cost-effective, timely manner that requires broadband, we’re going to see broadband [adoption] slow down," says Hayes. Specifically, he’s anxious to see how Apple might translate its success with music distribution into a viable method of monetizing and transmitting video via the Internet.

At the same time, contrary to popular belief, premium video content may not end up being the driving force of fiber development. For instance, in South Korea, the online gaming market has become a phenomenon that’s not only generating revenue; it’s changing the way that South Koreans interact socially. Unfortunately, the Catch-22 of ultrabroadband’s needing content to drive adoption and high-quality content needing ultrabroadband to reach consumers has become an unanswerable chicken-and-egg dilemma.

Between the lack of fiber-based business models and all of the legal and political obstacles to bringing fiber optic to the home, Hayes doesn’t foresee a mass deployment of fiber optic cable any time in the near future. "What appears to be happening is that the need and the demand are converging, and the timing is right," says Hayes. Although, "it’s going to take a long time" before fiber reaches the majority of American homes, he argues. He sees 20 years as a bare minimum, with 50 being a more realistic estimate of how long it will take to lay the necessary miles of fiber optic cable.

Broad but not Ultrabroad
ADSL, or Asynchronous Digital Subscriber Line, is not a DSL replacement, as it has the same inherent range limitations that have spurred innovators to find alternatives. The farther the user is from a central hub, the slower the connection they are capable of obtaining. ADSL service has a maximum distance of about three miles. What it does offer are connections up to 8Mbps download, although the typical home user can only realize 1.5Mbps service, which is widely, although not universally, available in urban and suburban neighborhoods. ADSL utilizes the same copper phone lines as DSL and, like its slower predecessor, allows for simultaneous phone/Internet usage.

Accessing the Internet via satellite doesn’t offer nearly as much in terms of bandwidth, with connection speeds under 1Mbps. But if you’re somewhere outside the scope of other broadband solutions, satellite might be your best—and only—option.

BPL, or "broadband over power lines," enables 3Mbps over a house’s existing electrical wiring. As a part of his call for universal, affordable access to broadband by 2007, President Bush has expressed his support of BPL as a way to bring broadband into every home. In March, Cinergy Broadband, a subsidiary of Cinergy Corp. and Current Communications Group announced that it was beginning to offer BPL in the greater Cincinnati, Ohio area. BPL raises the interesting possibility of the Internet as a public utility.

The DSL-replacement technology that seems to have the most momentum among its developers is the still nascent WiMAX standard, which allows for the wireless transfer of data via radio frequencies. WiMAX was created in an attempt to unite 802.16, the direct descendant of 802.11 (aka Wi-Fi), with ETSI HiperMAN, the European equivalent of the 802.16 standard, under one umbrella brand. WiMAX hitches users onto the Internet via towers; one especially attractive future option may involve simply retrofitting cell phone towers to transmit and receive a WiMAX signal. A sign of WiMAX’s momentum can be found in Intel’s involvement with the development process, including their plan to incorporate WiMAX technology into PCs starting in 2006 or 2007.

With a range of five miles, WiMAX has been openly referred to as a DSL replacement and primarily targets "underserved markets in developed countries and emerging markets in developing countries," according to Michael Cai, a Parks Associates senior analyst who recently compiled a comprehensive report on the state of wireless broadband. Cai sees developed countries with government mandates for 100% broadband coverage, like the U.K. and Germany, as the first markets that will fully take advantage of what WiMAX has to offer.

While WiMAX provides a solution for bridging the last mile, especially in rural areas, it’s initially only going to be able to handle 75Mbps per tower, which would be shared among any number of end users. "That number is quoted quite a lot," says Cai, "but it’s only based on certain bandwidth and certain channel size and certain modulation. It’ll probably be closer to 20Mbps and could be even less." Considering its pedigree, WiMAX will most likely continue to grow into a viable broadband alternative for rural communities, but it won’t be a serious contender to bring high quality, full-screen streaming video until it can handle a lot more bandwidth per tower.

Free Space Optics
Free space optics (FSO) technology works by transmitting wireless, point-to-point laser signals that can handle up to 10Gbps. Because of its cost, FSO is typically used by corporations for one of two tasks: connecting buildings with high-speed Internet access points or extending a company’s high-speed network between two buildings without the need for laying cable. "At one point, FSO was looked at as lasers going through every window," says Jeff Bean, director of marketing at LightPointe, a manufacturer of FSO technology. "But it’s not feasible from a cost standpoint." LightPointe’s packages start at $5,000 for a 10Mbps system, which provides the two lasers and installation but not fees to your ISP for the Internet access itself. "We’re not in the business of setting up Internet services," says Bean.

Cost isn’t the only thing keeping FSO from bridging the last mile into people’s homes. Another impediment is its somewhat limited three-mile range. Also, FSO is a line-of-sight technology, meaning that the two lasers need an unobstructed view of each other in order to transfer data. LightPointe’s top-shelf solution attempts to create enough redundancy to circumvent this limitation by simultaneously transmitting four lasers but only requiring that one laser beam be unobstructed for streaming without packet loss. Even still, FSO struggles with some weather conditions, especially fog. At the same time, LightPointe has seen its products succeed in slicing through everything from sandstorms in Kuwait to the recent Hurricane Charley in Florida.

For the short term, FSO will stay relegated to enterprise applications. "In the long term, if the need was there, you could conceivably set up point-to-point configurations in neighborhoods," says Bean. And an increase in demand could ultimately result in greatly reduced manufacturing costs for FSO technology. The most likely residential use of FSO will be to connect multi-tenant buildings, especially high-rises, to the Internet without the need to rip up streets and lay cable. "Eighty-five percent of the cost of getting fiber in the ground is labor," says Bean. "Going through the air is a lot easier than going through the ground." Bean also doesn’t see FSO as a competing technology to fiber optic cable or WiMAX, but rather a complementary one, especially in urban settings.