Knowing what physical media is used by an access network does not necessarily tell one much about actual capacity or expected customer speed experiences, on any access network. Nor does physical media necessarily drive customer choices in an exclusive way.
Personally, I’d buy a gigabit service provided by any network compared to an FTTH network supplying less capacity than that. Media does not matter, in that regard. Of course, price, upstream capacity and other issues play a part in such decisions.
The point is that we sometimes fetishize FTTH, when we should be looking also at speed and other elements of the customer experience. Before FTTH became available, I’d assumed most people would prefer to buy it. In the abstract, that makes a good deal of sense: it’s the better network, right?
But price-value relationships matter. FTTH availability is one matter; buying decisions are driven by a much-wider set of considerations.
Even though we conventionally assume fiber to home is much faster than copper access, with other platforms such as geostationary satellite, low earth orbit satellite, fixed wireless or hybrid fiber coax somewhere between copper and fiber home broadband platforms, FTTH networks can be activated at a range of speeds. In some cases, FTTH might not represent the fastest-available home broadband choice.
So comparisons and targets are, in one sense, better evaluated in terms of speed capabilities and price-value relationships, matched by consumer buying behavior. What a policymaker wants is gigabit speeds or multi-gigabit per second speeds, not access media as such.
There always seems a gap between customer preferences and internet service provider offers. In markets with strong cable operator competition, for example, FTTH tends to get between 40 percent penetration and 45 percent adoption after about three years of marketing. Some FTTH ISPs hope to reach a terminal adoption rate of 50 percent, but that is about the extent of expectations.
Data from other European markets shows similar gaps between facilities deployment and take rates, where take rates hover between 45 percent and 47 percent. And that is a view of physical media choices, not necessarily speed tiers chosen by customers.
In the U.S. markets, as well, many consumers choose not to buy the “fastest” tiers, but rather tiers someplace in the middle between fastest and slowest.
The point is that enabling fast home broadband networks is one matter; customer demand is another matter. At any given point in time, it is likely that a majority of customers buy services in the middle ranges of capability; not the fastest and not the slowest.
Consider U.K. fiber to premises networks, where “superfast” networks, by definition, operate at a minimum of 24 Mbps to 30 Mbps. Perhaps 42 percent of U.K. premises can buy FTTH-supplied home broadband.
Project Gigabit is a UK Government program aimed to bring £5 billion worth of investment to the country’s home broadband infrastructure. The aim is to bring gigabit-capable coverage to 85 percent of the U.K., and maximize coverage in the 20 percent of hardest-to-reach locations by 2025.
Based on past experience, it is safe to predict that, at some point, most customers will buy services at the gigabit per second level, just as most now buy services operating at about 30 Mbps. Just as safely, we can predict that, at some point, most customers will buy multi-gigabit per second services as well.
We sometimes forget that during the dial-up era, people bought services topping out at perhaps 56 kbps in 1997. By 2000, typical speeds had climbed to 256 kbps; by 2002 reaching 2.544 Mbps.
By 2005, typical speeds were in the 8 Mbps range; by 2007 speeds had climbed to about 16 Mbps. By about 2015 we began seeing advertised speeds of 1 Gbps.
In all those eras save the dial-up period, the top speeds were not purchased by most people. Capabilities are important, to be sure. But consumer demand also matters.
It is not necessarily a policy failure if most customers choose not to buy a particular product.
In competitive markets where gigabit alternatives are available on other platforms, FTTH take rates often hover around 40 percent of locations passed. If FTTH were clearly the superior choice, in terms of price-value, take rates would be higher.
How that changes in the future is a reasonable question, especially in markets with facilities-based competition. In markets with but a single network provider, but multiple retail competitors using one network, FTTH take rates could be much higher, even if market share held by any single contestant
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