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US seek $100 billion for fibre to the home
Friday 01 February 2008 07:03:50 by John Hunt

A report published this week by EDUCAUSE, a nonprofit association trying to promote higher education in the US, estimates that delivering a 100Mbps broadband connection to homes and businesses in the US using a fibre connection could cost up to $100 billion. That may sound like a large amount of money, but when put next to the £15 billion (approximately $30 billion at current exchange rates) estimated to fibre up the UK, it's comparatively a bargain.

Deploying fibre to the home (FTTH) to over 300 million people will be no easy task, particularly with the size of the country in hand. It is thus surprising that the cost per person in the UK ($500) is that much higher than the cost per person in the US ($333).

It is a pleasure to see the report is mindful of the future, considering what applications may be available today, but not forgetting that in 10 years things could be very different and much more bandwidth intensive. Currently, television is broaching on high definition (HDTV) with some content broadcast in this format. The future holds even higher resolution television such as Super Hi-Vision, being developed in Japan, which gives a pixel resolution of 7680 x 4320 (compared with the common 1280x720 for 720p/i), and comes in at 24Gbps uncompressed. Networks built now need to plan for the future when technology like this will be available to the masses rather than at the current, experimental stage.

100Mbps over a FTTH technology is just the beginning. The fibre being used can handle much faster speeds, and in the future, by upgrading the hardware at either end, could allow for necessary upgrades. This is where existing stop-gap technologies such as ADSL2+ being deployed here in the UK as part of BT's 21CN start to run into issues. The copper cable phone line being used are close to the limits of the bandwidth you can actually use them for at the distances being used. It is more cost efficient in the long term to deploy fibre sooner rather than investing in temporary technology. The problem is convincing the people who need to put forward the money.

For this, the report proposes the creation of a federal fund to put up money that would be matched by funds from individual states, the public and/or the private sector to pay for the costs. Spreading the burden of the cost is a wise plan, but the current US market, without a requirement for unbundling could see the creation of a monopoly on the network if regulation isn't imposed and private sector backing is solely employed. Whether this government aided approach would work in the UK is unknown. Previous public-private partnerships have been faced with a lot of opposition.

Unfortunately for the US, the Bush administration does not believe it should be intervening in pushing the market towards any particular technology, and this will no doubt mean that they won't be stumping up the cash to help get new networks deployed. Their view is in fact quite the opposite. Withdraw regulation that requires unbundling as they believe this is more likely to encourage local operators to upgrade their networks. This leaves little hope for a wide-spread FTTH roll-out within the US any time soon.

This is perhaps one aspect where the UK has been lucky. Stephen Timms has done a sterling job at promoting the need for high-speed broadband, and encouraging industry to work toward a solution, and we only hope his successor will strive to keep up his good work.

More details from the EDUCAUSE report, and about the US government's view can be read at ars technica.


Posted by herdwick over 9 years ago
£15 billion here would be $15 billion there, not $30bn. The Lithuanian digging a trench here would get the minimum wage of £5.52 per hour and the Mexican doing it in the USA the Federal minimum wage of $5.85.

Then there's the planning issues and red tape around doing anything here to take into account.
Posted by AndrueC over 9 years ago
I suppose one thing that might keep US costs down would be their street system and layout. Presumably their existing cable infrastructure is relatively modern and from what I've seen of it is mostly overhead as well.

In the UK you have to deal with the older properties in town and city centres. Or pulling back (?) copper then blowing fibre.

As for cheap labor (sic) the US is not short of immigrants.
Posted by Balb0wa over 9 years ago
The uk isnt short of immigrants either !
Posted by gagravarr over 9 years ago
I'm pretty sure that the US has already given their phone companies large tax breaks ($200 billion or so) to build FTTH, which has largely failed to appear:
Posted by chrysalis over 9 years ago
even if you took away the exchange rate so £1 = $1 the costings should put BT to shame as the uk is a much smaller land mass and population so should be a lot cheaper to do a rollout.
Posted by AndrueC over 9 years ago
@chrysalis:Have you ever been to America? Straight, wide streets, wires on poles, zoned housing laid out on a convenient grid and most buildings less than a hundred years old.

They don't even bother to maintain pavements and road surfaces to the standard we do. Even their interstate highways have potholes and joins in them.

By American standards the M54 prior to its recent resurfacing was a reasonable quality highway.

I can well believe that upgrading US networks to fibre is cheaper and easier than upgrading UK networks.
Posted by herdwick over 9 years ago
These estimates all look like arm waving guesses in the style of "what would the Olympics cost".

The US paper says "Building a local fiber connection past each home and business will cost approximately $100 billion." note *past* every home - if this doesn't include connections then Verizon experience would suggest connection costs will double it although Verizon only get about 15% penetration ie <1m customers from 6m premises passed.
Posted by Guzzo over 9 years ago
"It is thus surprising that the cost per person in the UK ($500) is that much higher than the cost per person in the US ($333)".

Suprising to whom? Not to me.

Britain is being plundered on a scale never before seen, and it will continue at pace until we demand a fair and honest system of money and of Government.
Allowing the wealthy to dictate all the time is not a good thing. I think Social Credit looks interesting and would certainly get us a comunications industry more fair than it is now.
Posted by CARPETBURN over 9 years ago
quote".......Have you ever been to America? Straight, wide streets, wires on poles, zoned housing laid out on a convenient grid and most buildings less than a hundred years old."

LMAO If you think the whole of the USA is like that your opinion of them is even more twisted than your spread the love for BT opinion LOL... Suggestion try visiting out of the city next time LOL
Posted by CARPETBURN over 9 years ago
quote"These estimates all look like arm waving guesses in the style of "what would the Olympics cost"."

Quote for once i think herdwick and myself MAY BE in agreement... The figures mentioned for the USA i would say are nothing but guess work. I think its the same for the UK and the £15billion figure... another wild stab in the dark guess. Projects of this size either in the USA or the UK real cost will only be known once(IF) they are done.
Posted by CARPETBURN over 9 years ago
There are so many things which could happen and add or decrease the cost. They could wildly exceed the guesstimate figure or come in vastly cheaper, truth is nobody really knows to the job is done.
Posted by chrysalis over 9 years ago
carpetburn you beat me to it :) parts of usa are like that but not all of it is, alot of it has premises spread out over much larger areas than we do so on a overall scale there is longer distances to cover over there, evident by their higher number of longer lines.
Guzzo isnt wrong costs of everything is escalated here.
Posted by Dawn_Falcon over 9 years ago
$100 billion will be for the dense city areas. most of America is...well...let's just say Satelight broadband is the only viable broadband tech.
Posted by bobatbanktop over 9 years ago
How will the rural community in the UK be supplied? Surely it would be better to have a wifi type system for everyone rather than dig up the whole of the UK.
Posted by FiberForcer over 9 years ago
USA estimate obviously doesn't include rural, UK estimate does.

Wifi for rural?, no, wifi brings health problems.

Posted by ChrisRedpath over 9 years ago
I don't know about health problems, but WiFi sucks. I'd hate to have that as my only net access - coverage is patchy and interoperability is really poor for a supposed standard. HSDPA on the other hand, is much better.
Posted by herdwick over 9 years ago
"wifi brings health problems"

utter nonsense. Unless the pile of bodies from wi-fi is hidden behind the pile of bodies from vCJD or countless other fantasy problems.
Posted by CARPETBURN over 9 years ago
^^^ Have to agree with herdwick again (OMG lol) wifi and so called health problems haas never been proven and those that shout its evil are often the stupid do-gooders with nothing better to do.
Also have to agree with ChrisRedpath Wifi does suck, IMO any type of wireless connection even just sharing the connection in your home with your wireless router sucks... I wouldnt want it either.
Posted by chrysalis over 9 years ago
sorry where does it say the usa estimate excludes rural? its just assumptions ebcause you find it hard to believe?
Posted by CARPETBURN over 9 years ago
Whether the figure includes rural/out of the way areas or not i dont think matters. Like most things in a strictly convert one currency to another sense the job for the same squared area/land in the US will probably cost less than the job in the UK. Its rip off Britain again. We also dont know what methods when it comes to installing the US would use in most areas (maybe manpower, equipment used, cost of the cables etc etc will all differ in price).
Posted by CARPETBURN over 9 years ago
There are too many variables to properly compare both prices, and both figures for the US and UK are obviously guess work. As i stated previously they are likely to end up costing more or less than the original guess-timate figures for both countrys.
Posted by Dawn_Falcon over 9 years ago
chrysalis - scale factor. Wiring up the rural areas of one of the larger states would cost far, far more than the stated figure even with the most wildly opimistic numbers.
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