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San Francisco May Take FTTH With Its WiFi

The City of San Francisco says the municipal fiber-to-the-home (FTTH) network it's considering building would work in concert with the muni WiFi network that EarthLink Inc. (Nasdaq: ELNK) and Google (Nasdaq: GOOG) plan to build. (See SF Net to Go Public?)

The Mayor's office last year allocated $300,000 to study the feasibility and costs of building an FTTH network. The resulting study, conducted by the consulting firm Columbia Telecommunications Corp. , was delivered in late January. "In the long term this is something that is feasible, based on what the study says," notes Ron Vincent, a spokesman for the City's Department of Telecommunications and Information Services (DTIS).

According to the report, the cost of building a muni fiber network in San Francisco could range from $500 million to $1 billion. Vincent estimates it would be about three times that when all is said and done. By contrast, EarthLink has said the planned WiFi network will cost $15 million over the next ten years.

Vincent makes clear that a new FTTH network would compliment, not supercede, the city's controversial WiFi network. Several activist groups have called on the city to scrap the WiFi plan in favor of a fiber network owned entirely by the city. This, they say, would deliver a lot more bandwidth for the buck, and would do more to connect the "have-nots" on the other side of the Digital Divide. (See SF's Muni Mesh Mess.)

The Mayor's office believes a combo network might be best, Vincent says. "Even if you had fiber-to-the-home today, you still don't have the mobility of WiFi, so WiFi compliments such an initiative," he says. "You can't put fiber in a police car; you're still going to need some type of WiFi in order to be mobile."

FTTH would certainly be better than WiFi for in-home applications. According to the Google/EarthLink proposal, the San Francisco WiFi service would offer users a top speed of around 1 Mbit/s downstream and upstream (for $22 a month). FTTH networks, on the other hand, are capable of delivering up to 100 Mbit/s of bandwidth to the home. (See FTTH Hits Mainstream.)

Vincent says Amsterdam is being used as a model for a possible San Francisco network. Amsterdam is just getting underway with a muni fiber build, which the city expects will take ten years to complete.

Vincent says a special body comprised of three city supervisors and one member of the public is now considering the idea. One of the three city supervisors is Tom Ammiano, who initially proposed studying the muni fiber idea.

Naturally, the FTTH idea isn't getting good reviews from the local utilities.

AT&T Inc. (NYSE: T) spokesman Gordon Diamond had no comment for Light Reading, but AT&T external affairs area manager Kenneth Mintz was interviewed by the authors of the feasibility report. "The circumstances that would justify a municipal broadband project simply do not exist in San Francisco," Mintz says in the report. Mintz says that "service gaps" in San Francisco are "perceived, not real," and that AT&T does not recognize a need for San Francisco to consider either wireless or FTTP infrastructure.

"If the City deploys fiber, why should AT&T bother with any investments in the community?" Mintz asks.

Comcast Corp. (Nasdaq: CMCSA, CMCSK) spokesman Andrew Johnson tells Light Reading that San Francisco need look no further than across the Bay to the City of Alameda to see why muni FTTH is a bad idea. Alameda passed a ballot initiative in 1998 to become a fiber-based TV and Internet services provider, going head-to-head with Comcast in the East Bay. Johnson points to local news reports saying that the six-year-old Alameda muni FTTH project has already received $43 million in bailouts and is still losing money.

— Mark Sullivan, Reporter, Light Reading

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alcaseltzer 12/5/2012 | 3:15:01 PM
re: San Francisco May Take FTTH With Its WiFi Mark - if you want more detail on the Alameda fiber fiasco, please let me know how to contact you.

The debt figure is actually more like $80M, and the best proposal so far is to add voice, and perhaps throw off $2-$3M per year. So that debt will be paid-off in, oh, 40 years or so.
paolo.franzoi 12/5/2012 | 3:15:00 PM
re: San Francisco May Take FTTH With Its WiFi
Gee rj, Tellabs announced they shipped their 1 Millionth (is that a word) ONT earlier this year. Verizon is the primary customer. NTT is about double that, but has about double the number of subs.

seven
rjmcmahon 12/5/2012 | 3:15:00 PM
re: San Francisco May Take FTTH With Its WiFi The debt figure is actually more like $80M, and the best proposal so far is to add voice, and perhaps throw off $2-$3M per year. So that debt will be paid-off in, oh, 40 years or so.

So the answer is to turn to the incumbents whose cost of capital is much, much higher? That's silly as they won't ever invest.

I guess it's ok to say that nobody can afford it so the US won't get it. The problem with that is Asia is solving the problem. If we don't get after real solutions we'll be leaving a legacy to next generations of not only the burdens of supporting unsustainable medicaire promises but in turn give them uncompetitive infrastructure too work from. Not too smart in my opinion.
paolo.franzoi 12/5/2012 | 3:14:58 PM
re: San Francisco May Take FTTH With Its WiFi
July 04 was the Keller rollout of FiOS. Verizon announced their Q306 numbers at 552K active subs.

Verizon has 30M subs. NTT has about 60M. So on a percentage basis, the rollout is about as complete. There is no other significant rollout in Asia. There is just Verizon and NTT. There are trials in Korea and China, but none of those are planned to be even as big as FT.

So, your concept that Asia has solved this and everybody should be doing it is wrong. Two carriers have made a commitment to doing extensive FTTH buildouts. Both of them have stated that they will not do this to 100% of their lines, but only about 50%. AT&T has said similar things about their FTTN network.

All of these carriers have challenges around business cases. So none of this is assured anywhere, but I love your positive view. It fits with your thought patterns, but has little to do with actual facts of what is actually occuring in the world today.

By the way, in the same presentation (Q306) stated that they had 3.8M homes that are being marketed to for those 522K customers. They have announced plans to pass about another 3 Million homes this year, which should bring their homes passed to about 9M or 50% of their proposed buildout of 18M homes. Needless to say there is lag in opening those home up for sale and then actually connecting the customers. But the buildout continues apace.

seven
rjmcmahon 12/5/2012 | 3:14:58 PM
re: San Francisco May Take FTTH With Its WiFi Gee rj, Tellabs announced they shipped their 1 Millionth (is that a word) ONT earlier this year.

Seven (even if this is accurate) how many years to 1M? How many sold in 2006?

To put it in perspective the US has 1.7M housing starts per year and over 110M existing units.

Also, GPON is probably going to fail anyway making this a bridge to nowhere.
paolo.franzoi 12/5/2012 | 3:14:57 PM
re: San Francisco May Take FTTH With Its WiFi
NTT deploys EPON - the 100Mb/s lasts between the PC and the ONT. It is not symmetric 100 Mb/s. You best learn the technology. It is shared PON just like Verizon. The bandwidth is about the same.

Most of the counts you have included are VDSL subscribers in apartment buildings. I am quoting real FTTH numbers and the numbers are about the same.

Sorry to disappoint you.

seven

rjmcmahon 12/5/2012 | 3:14:57 PM
re: San Francisco May Take FTTH With Its WiFi Verizon has 30M subs. NTT has about 60M. So on a percentage basis, the rollout is about as complete.

Seven, I don't think this is a correct or a complete conclusion. Japan has something like 7.2M fiber subscribers with 100Mbs full duplex with 60M premises. That's 11.7% You're saying VZ is reaching 550K for 30M subs which is 1.8%. Also, you're ignoring the pricing. I don't have the details in front of me but I believe Japan is an order of magnitude cheaper per bit delivered too.
rjmcmahon 12/5/2012 | 3:14:49 PM
re: San Francisco May Take FTTH With Its WiFi NTT deploys EPON - the 100Mb/s lasts between the PC and the ONT. It is not symmetric 100 Mb/s. You best learn the technology. It is shared PON just like Verizon. The bandwidth is about the same.

I haven't been to Japan so I don't really know. But fair enough that it's not a symmetric 100 Mb/s. I'd also believe that their access links are way out of balance with the backbones and few are getting 100Mbs end to end.

My real point is that our goal is to be delivering the most bw per dollar sunk possible, instead of rationing it and creating a scarce resource out of what's not really scarce. If the US is going to put up the labor costs to lay access fiber the new links should support a minimimum of 1Gbs in order to be cost competitive in the long run.

Look at today's pricing. (a topic you continuously overlook) VZ has been protecting T1 revenues for decades. Japan has 100Mb for $39 a month.

So we get FiOS which is a dog that won't hunt. Or AT&T and their FTTP BS about U-Verse which is getting no takers. Two companies can't build out to 110M premises in any reasonable time even if the FCC gives them a nationwide franchise. It's gotta be done by many organizations who aren't on the phone companies or cable companies payrolls.

Let them roll them up and operate them when the contruction phase is over.

And if a government tries, more power to them. If it requires 40 yr bonds they are probably the only organization that can get reasonable terms.
rjmcmahon 12/5/2012 | 3:14:49 PM
re: San Francisco May Take FTTH With Its WiFi I am sorry now FiOS is going to fail because of T-1 Revenues?

It's a misallocation of capital by VZ. The first place to build fiber access networks to is 10M+ businesses. They don't want to do this because they are protecting T1 revenues.

You are ranting about things and ignoring the data. The bandwidth per sub in both networks is the same.

And you've yet again ignored the price per bit comparison.

The fiber that has been laid gets all kinds of bandwidth that nobody has any idea how to use. Now you want to scale it to unbelievable proportions.

It's not unbelievable proportions. It's the best bang for the buck. GigE is commonplace. Go to any eletronics store or buy any motherboard.

How about naming one application that a home will pay for?

Bandwidth as utility - sorry no killer app.

Seven; I understand the need to keep milking VZ until this whole charade is over. I know, we've all got mortgages to pay. This VZ FiOS gig will probably last for you. Check out "Thank you for Smoking" after you're done. It's a worthwhile movie.
paolo.franzoi 12/5/2012 | 3:14:49 PM
re: San Francisco May Take FTTH With Its WiFi I am sorry now FiOS is going to fail because of T-1 Revenues?

No, now I got it this 100Mb/s service which at the uplink of the OLT has the same bandwidth per sub as FiOS is suddenly better because the port on the ONT is 100Mb/s? Then, you know what FiOS is a 100Mb/s service - It has a 100BT port on the ONT.

You are ranting about things and ignoring the data. The bandwidth per sub in both networks is the same. FiOS and the NTT EPON network offer different services and that is an interesting debate. Both are looking to find ways to reduce their costs and raise their prices/add services.

The fiber that has been laid gets all kinds of bandwidth that nobody has any idea how to use. Now you want to scale it to unbelievable proportions. I propose that my PC be connected to every other Host on the Internet with a 1Gb/s pipe. Everything else is fraudband! Sheesh come on. How about naming one application that a home will pay for? Remember the car came first then the roads. So, show me the car.

seven
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