Posts Tagged ‘radio transmission

Fiber deployment by incumbents will make additional broadband overbuilds less likely

Fiber optic cable deployment by incumbent telephone and cable companies will have a significant impact on the prospects for last-mile broadband competition. Once a customer is served by fiber cable, all non-mobile communications services could be provided over the single fiber pathway: voice, super-high-speed data, and HDTV quality video. Once fiber is put in place by one provider, the business case for additional high-speed last-mile facilities weakens. This fact is readily discernable by efforts of incumbents to block fiber-to-the-home projects that have been pursued by municipalities. Both incumbent telephone companies and incumbent cable operators have taken steps to disable the attempts of municipalities to deploy fiber. Thus, fiber optic cable, either connected directly to the household, or terminated near the home (and using existing metallic cable distribution to bridge the last few hundred feet), will provide a virtually unlimited supply of bandwidth to any end-user.
 
Once fiber is deployed, its vast capacity will undermine the attractiveness of other technologies which are not capable of delivering the extremely high bandwidth (e.g., 100 Mbps) which fiber is capable of delivering to end users. It is simply not reasonable to believe that capital markets will support numerous last-mile overbuilds, using fiber optics, wireless, or broadband over power line technology, especially if incumbent telephone company and cable companies are well on their way to deploying fiber to, or close to, the home.  Alternative technologies have deployment or operational problems. For example, broadband over power line (BPL) technology, which has the potential to share existing electric company power distribution networks is currently in the trial phase, but problems have emerged with this technology, especially due to its generation of external interference which affects radio transmission of both public safety agencies and ham radio operators. The generation of radio interference has been an unresolved issue in several BPL trials, and led to the termination of at least one trial. BPL may offer some promise as an alternative last-mile facility if the interference problems can be overcome. However, expected transmission speeds from BPL (2Mbps to 6Mbps) are much lower than those available from fiber optics. Furthermore, BPL will face a market where incumbents have already gained first-mover advantage by deploying fiber. As was recently noted by one analyst: “By the time it (BPL) really arrives in the market, terrestrial broadband will be almost fully saturated”.
 
Fixed wireless services, such as WiMax service, may be deployed with lower levels of investment and sunk costs than fiber, but suffer from other limitations, including the requirement that high-frequency radio waves be utilized to provide the service. Higher frequency radio waves are more likely to require a direct line of sight between points of transmission. Constructing line-of-sight wireless networks may be useful for network transport, but it is much more costly to install as a last-mile facility. The very high frequencies in which WiMax operates, ranging between 2GHz and 11GHz for the non-line-of-sight service, and up to 66GHz for the highest speed line-of-sight transmission, indicates that the spectrum is not optimal for last-mile facilities. Finally, it is also notable that due to the pending merger of at&t and BellSouth, the resulting company will control a significant number of WiMax licenses. Regulators may require the divestiture of these licenses as a merger condition, however, if they do not, it is difficult to imagine that the licenses will be used by the merged company to compete against its fiber-based broadband offering.

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