FTTH is the Network of the Future; the Issue is How Far Off is "the Future?"

“Fiber is the future of networking, and always will be,” one wag from the cable TV industry said several decades ago, as the hybrid fiber coax architecture began to be installed. What he meant was essentially that what is good enough for present business purposes often is better than some other “perfect” alternative. 

The point is that business models matter. A networking platform that delivers market-leading bandwidth now, at lower cost than the other options--even the “perfect” long-term alternatives, arguably is a better choice in a competitive market. 

That does not mean the future perfect alternative will never make sense, only that alternatives offering sufficient bandwidth for the present, and near future, with higher profit margins, are a reasonable choice, especially if the platform is extensible. 

In other words, a platform with a roadmap to 10 gigabit per second speeds (hybrid fiber coax or 5G) might often be a reasonable networking choice now and for the near future, even if not perfect. 

That in no way means optical fiber to the customer premises is not “the future,” at least for many locations where fixed networks are feasible. We might all agree that, eventually, it is. 

Between now and then, though, service providers must operate businesses that face constrained revenue upside, putting a premium on platforms that can deliver market-standard bandwidth now, at lower cost than a full and complete upgrade to fiber to the home, if that is feasible. 

In a strategic sense, one might agree that “the debate over the best infrastructure to deliver fixed last-mile broadband service in the 21st century is settled, and fiber is the undisputed winner,” without agreeing that this is the best networking choice today, not later in the century, for all suppliers of internet access. 

To use an obvious example, 5G fixed wireless--not optical fiber--is a feasible way for some mobile operators to take market share in the fixed networks internet access market, at far lower cost than would otherwise be feasible for them. In an era where access revenue potential is sharply limited, and might actually be falling, lower platform costs matter. 

Likewise, cable TV operators, who have perhaps 66 percent share of U.S. consumer fixed network internet access market share, are far from the point where it makes sense, as a general rule, to replace HFC with FTTH. 

In other words, one can agree that “fiber is the superior medium for carrying fixed broadband by almost every metric: available bandwidth, SNR, theoretical capacity, real-world throughput, latency, and jitter,” without agreeing that it is the “best” platform for all contestants in competitive markets, where stranded assets stranded assets represent more than 50 percent of all consumer locations, and possibly no more than 33 percent. 

Though optical fiber to the premises networks are “the best” in a technological sense, they might not be best in terms of business model. That is especially true in competitive fixed network markets, where multiple facilities compete and financial return hinges, in part, on the percentage of revenue-generating accounts any network can hope to attract.