A Managerial Analysis of Fiber Optic Communications

A Managerial Analysis of Fiber Optic Communications

Mahesh S. Raisinghani (TWU School of Management, USA) and Hassan Ghanem (University of Dallas, USA)
DOI: 10.4018/978-1-60566-014-1.ch118
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Abstract

A form of fiber-optic communication delivery in which an optical fiber is run directly onto the customers’ premises is called Fiber to the Premises (FTTP). This contrasts with other fiber-optic communication delivery strategies such as Fiber to the Node (FTTN), Fiber to the Curb (FTTC), or Hybrid Fiber-Coaxial (HFC), all of which depend upon more traditional methods such as copper wires or coaxial cable for “last mile” delivery (Fiber to the Premises, 2007). While high-speed fiber-optic cables are more often used to provide the primary links, the “last mile” to each home still plays an important role in the quality of service and bringing high-speed broadband to an area that is largely dependent on this last-mile connection. FTTP involves laying optical fiber from a central location (switch) to a termination point (the home or business), and could potentially deliver broadband at speeds of up to 100Mbps. The actual speed is determined by the size of the Passive Optical Network (PON). The technology is capable of transmitting data at speeds of up to 2.5Gbps; this amount is divided by the number of termination points on the PON to determine the actual bandwidth to each end point. Replacing copper infrastructures with fiber to every home in an area is an expensive proposition, but the rewards could be great for telecom providers. An FTTP infrastructure would enable those providers to not only provide high-speed broadband; they could also expand into other areas such as cable programming. The Baby Bells have another incentive to roll out FTTP as well; the FCC requires them to share their copper wires with their competitors, but that requirement would not apply to new FTTP infrastructures. This ruling gives providers a major incentive to roll out FTTP, despite the large initial investment that is required. Copper, the predominant connection to the home used today, has inherent limitations both in terms of length from home to switch, and amount of bandwidth that is provided. FTTP also has a great advantage over Digital Subscriber Line (DSL), which provides broadband over existing copper, because DSL infrastructures must have more central relay points due to distance limitations. DSL is limited to only a few thousand feet between the switch and the home; FTTP allows for up to 49.6 miles (80 kilometers) between the home and the central switch. Cable broadband already has a head start, but FTTP offers some advantages, in that cable has a limited upstream bandwidth. FTTP, while still very new, holds great promise. It will enable providers to easily provide customers with a single bundle of services that comprise voice, data, and video. Ultimately, FTTP will deliver higher bandwidth to the home, and a wider range of services at an affordable price. While some FTTP projects focus on replacing existing copper cable, new “greenfield” areas such as new housing developments are likely to see FTTP from the very beginning (WiseGeek, 2007).
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Introduction

A form of fiber-optic communication delivery in which an optical fiber is run directly onto the customers’ premises is called Fiber to the Premises (FTTP). This contrasts with other fiber-optic communication delivery strategies such as Fiber to the Node (FTTN), Fiber to the Curb (FTTC), or Hybrid Fiber-Coaxial (HFC), all of which depend upon more traditional methods such as copper wires or coaxial cable for “last mile” delivery (Fiber to the Premises, 2007).

While high-speed fiber-optic cables are more often used to provide the primary links, the “last mile” to each home still plays an important role in the quality of service and bringing high-speed broadband to an area that is largely dependent on this last-mile connection.

FTTP involves laying optical fiber from a central location (switch) to a termination point (the home or business), and could potentially deliver broadband at speeds of up to 100Mbps. The actual speed is determined by the size of the Passive Optical Network (PON). The technology is capable of transmitting data at speeds of up to 2.5Gbps; this amount is divided by the number of termination points on the PON to determine the actual bandwidth to each end point.

Replacing copper infrastructures with fiber to every home in an area is an expensive proposition, but the rewards could be great for telecom providers. An FTTP infrastructure would enable those providers to not only provide high-speed broadband; they could also expand into other areas such as cable programming. The Baby Bells have another incentive to roll out FTTP as well; the FCC requires them to share their copper wires with their competitors, but that requirement would not apply to new FTTP infrastructures. This ruling gives providers a major incentive to roll out FTTP, despite the large initial investment that is required.

Copper, the predominant connection to the home used today, has inherent limitations both in terms of length from home to switch, and amount of bandwidth that is provided. FTTP also has a great advantage over Digital Subscriber Line (DSL), which provides broadband over existing copper, because DSL infrastructures must have more central relay points due to distance limitations. DSL is limited to only a few thousand feet between the switch and the home; FTTP allows for up to 49.6 miles (80 kilometers) between the home and the central switch.

Cable broadband already has a head start, but FTTP offers some advantages, in that cable has a limited upstream bandwidth. FTTP, while still very new, holds great promise. It will enable providers to easily provide customers with a single bundle of services that comprise voice, data, and video. Ultimately, FTTP will deliver higher bandwidth to the home, and a wider range of services at an affordable price. While some FTTP projects focus on replacing existing copper cable, new “greenfield” areas such as new housing developments are likely to see FTTP from the very beginning (WiseGeek, 2007).

Fiber to the premises can be further categorized according to where the optical fiber ends:

  • FTTH (Fiber to the Home) is a form of fiber-optic communication delivery in which the optical signal reaches the end user’s living or office space; or

  • An optical signal is distributed from the central office over an optical distribution network (ODN). At the endpoints of this network, devices called optical network terminals (ONTs) convert the optical signal into an electrical signal. For FTTP architectures, these ONTs are located on private property. The signal usually travels electrically between the ONT and the end-users’ devices (Fiber to the Premises, 2007).

The Regional Bell Operating Carriers (RBOCs), AT&T/BellSouth and Verizon, that serve 123,000,000 of the 180,000,000 access lines (68%) in the U.S., to greater or lesser extents, are now in the process of rolling out FTTP (FTTP Equipment & Fiber Cable Requirements, 2007).

Key Terms in this Chapter

Asynchronous Transfer Mode (ATM): A high-speed transmission protocol in which data blocks are broken into cells that are transmitted individually and possibly via different routes in a manner similar to packet-switching technology

Digital Subscriber Line (DSL): A switched telephone service that provides high data rates, typically more than 1 Mbps

Multiple Service Operators (MSOs): Synonymous with cable provider; a cable company that operates more than one TV cable system

Asynchronous Digital Subscriber Line (ADSL): A digital switched technology that provides very high data transmission speeds over telephone system wires; the speed of the transmission is asynchronous, meaning that the transmission speeds for uploading and downloading data are different. For example, upstream transmissions may vary from 16 Kbps to 640 Kbps, and downstream rates may vary from 1.5Mbps to 9Mbps. Within a given implementation, the upstream and downstream speeds remain constant.

Regional Bell Operating Company (RBOC): One of the seven Bell operating companies formed during the divestiture of AT&T; an RBOC is responsible for local telephone services within a region of the United States.

Fiber-Optic Cable: A transmission medium that provides high data rates and low errors; glass or plastic fibers are woven together to form the core of the cable. The core is surrounded by a glass or plastic layer, called the cladding. The cladding is covered with plastic or other material for protection. The cable requires a light source, most commonly laser or light-emitting diodes.

Bandwidth: The difference between the minimum and the maximum frequencies allowed; bandwidth is a measure of the amount of data that can be transmitted per unit of time, which means that the greater the bandwidth, the higher the possible data transmission rate.

Internet Protocol (IP): The network layer protocol used on the Internet and many private networks; different versions of IP include IPv4, IPv6 and IPng (next generation).

Voice Over IP (VoIP): This is the practice of using an Internet connection to pass voice data using IP instead of the standard public switched telephone network. This can avoid long-distance telephone charges, as the only connection is through the Internet.

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