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MDU Developments: FTTH (Fiber To The Home) adds about $5,000 to the price of a home.

The ability to carry information is called bandwidth. Lots of bandwidth allows lots of information to be carried. Fiber has a lot of advantages over copper wire or coaxial cable, as it is easier to maintain and delivers far more bandwidth. Below discusses one of the biggest advantages.

Once installed, fiber is upgraded by changing the electronics that creates the light pulses, and not by replacing the cable itself. The fiber is amazingly reliable. Nothing hurts it except a physical cut, or the destruction of the building it is in.

Passive optical networks, or PONs, are the most common type of network. They use a minimum of electronics. In fact, there are no electronics at all between the provider’s central office and users. This improves network reliability and cuts deployment costs. But optical networks that do require electronics in the field have some advantages as well, especially when a network is built to carry content from multiple providers on the same fiber. Either way, the amount of power needed to run a fiber network is far less than that needed to run a coax or other copper network. This aids reliability and contributes to sustainability as well.

As we noted, bandwidth providers are increasingly bringing fiber optics all the way to customer premises. That technology, FTTH or fiber to the home (also called FTTP, for fiber to the premises) is the “gold standard.” Almost as good – at least for the short term – is bringing fiber to the basement of a building (FTTB) and distributing it over copper wires to the apartments or business premises within the building. Where the population density is low, or where high-quality coaxial cable or copper networks exist, it may make sense under some circumstances to bring fiber only partway to the customer. The fiber is then connected to the existing copper for the last jump to users’ premises.

As time goes on, fiber is moved closer and closer to the customers, to provide more bandwidth. That approach is called FTTN for fiber to the “neighborhood” or “node” or (for greater bandwidth) fiber to the curb (FTTC).

Today, the looming bandwidth needs are so large, and FTTH construction prices so reasonable, that going straight to FTTH makes more economic sense in most situations. Even in rural areas, hundreds of network builds have chosen FTTH over FTTN and copper. In rural settings, FTTH usually costs more to build, but the builders can expect much higher revenue from customers.

In the US until recently, single-family homes have been the easiest to equip with FTTH. Apartment buildings and other multiple-dwelling-unit (MDU) structures in the US started to be served with FTTH in really large numbers only in 2006.

MDU fiber service is already common in Europe and Asia, however. Thus, there is no “technology risk” in specifying FTTH now, in any circumstance.

Virtually every large developer of single-family homes, condominiums and rental properties has an active program to add FTTH to new properties. Most are working on retrofitting older properties as well. That work has expanded as new home sales have fallen.

What do the major players know that not all smaller developers realize? Before the boom ended, Michael Render of RVA LLC estimated, on the basis of surveying home buyers and developers, that FTTH adds about $5,000 to the price of a home. The size of the increase is less certain now, but it is clear that FTTH homes sell faster.

Nevertheless, some smaller developers were on the sidelines until recently. That’s now changing. By mid-2006 it was clear that FTTH was economically viable in new developments with as few as 80 MDU living units or 100 single-family homes. That number has continued to fall due to improvements in deployment technology.

As fiber and fiber deployment costs have continued to come down and copper costs have increased, fiber has achieved cost parity with copper in nearly all new construction – even without taking the added home value into account.

--Broadband Properties Mag


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