Chattanooga Rocks 1-Gig FTTH Service

Municipal utility EPB makes Tennessee town first in US with 1-Gig symmetric residential service

September 13, 2010

3 Min Read
Chattanooga Rocks 1-Gig FTTH Service

LAS VEGAS -- Fiber to the home has a new rock star. His name is David Wade, he has a charming Tennessee drawl, and his company is the first in the US to deliver a symmetrical 1 Gbit/s to residential customers.

More importantly, however is the fact that Wade's company, the Chattanooga, Tenn.-based EPB Fiber Optics , is taking its fiber-based high-speed Internet access service -- along with voice, video, and smart grid electrical meters -- to all 170,000 of its customers by year's end, even though many of those customers live in remote rural parts of the nine-county area.

Wade proudly announced the 1-Gbit/s service at the FTTH Council Conference, held here this week. He and EBP have already made the front page of The New York Times and garnered attention from CNN and others.

"We are not just talking about the city proper, or one neighborhood, or the densely populated areas or the wealthy areas. We are talking about our entire service area, which is 600 square miles, 170,000 homes and businesses," Wade said. "Much of that area is very rural."

EBP, which is using Alcatel-Lucent (NYSE: ALU) GPON technology, has had its plan widely vetted in a series of public meetings, since it is a municipally owned utility company. It's projecting a strong payback on its FTTH network, even given the expense of building in areas that are not densely populated. That plan was based on an installation rate of 50 homes a day and a 30 percent take rate on voice, data, and video services within five years.

EBP is actually installing 130 to 140 homes a day and has hit the 15 percent penetration point in its first year, Wade says.

Perhaps more importantly, EBP expects to save $300 million over 10 years on wholesale electricity purchases by using the smart meters deployed on its fiber optic network to reduce consumption.

EBP's funding comes from a $227 million bond issued in 2007 and a $100 million matching grade from the Department of Energy issued in 2009 for the smart grid investment.

Wade candidly admits he has no idea what demand will be for 1 Gbit/s at $349 a month, and he has no plans to do anything to stimulate that demand. (Other available tiers are 30 Mbit/s, 50 Mbit/s, and 100 Mbit/s.) Given the ubiquity of the service, EPB will re-examine its rates for business Gigabit services, which run $1,500 to $1,800.

EPB runs its FTTH lines past all of its customers' homes and places the drop to the home when voice, data, or video service is ordered. The smart grid meters use a wireless mesh to communicate with appliances inside the home, and the FTTH network essentially operates as their backhaul network, Wade said.

Wade says EPB ran the smart meter service and communications services business cases separately and was still able to justify the FTTH buildout. But the combination created compelling economies of scale.

As for its choice of GPON, Wade says EPB pushes electronics deeper into the network than most PON operators, to provide redundancy, and EPB "felt very comfortable with this technology."

Thus far, one call center company has announced plans to come to Chattanooga, Wade says. The competitive response has consisted of Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s rollout of Xfinity and AT&T Inc. (NYSE: T)'s deployment of U-verse, with both companies offering higher broadband speeds.

"They've kept their prices low," Wade says. "This past January, Comcast didn't raise its prices for the first time that I can remember."

— Carol Wilson, Chief Editor, Events, Light Reading

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