Guest commentary: FTTH or wireless, which is more cost-effective?

Recently, I spoke to the communities of Western Tennessee at their Summit on Economic Development and Broadband. Not unlike other communities, the need for economic growth in the new age is paramount in their plans. I explained our ideas on how to capitalize on the broadband super highway. Attending the event were many communities who find that they are wrestling with the activity of sorting through their technical choices. One such question came after the event and I felt that sharing our technical answers to this query would benefit other communities who may also have the same questions.

The Question: Should I Deploy Fiber to the Home or is Wireless a More Cost-Effective Solution?

The Answer:
FttH (Fiber to the Home) is a fabulous high bandwidth solution for the consumer and business alike.  In the perfect world, that is the solution we should all adopt.  Unfortunately, FttH is expensive and time consuming to deliver. Covering large geographical areas with FttH requires lots of cap-ex in labor, fiber and electronics.

Wireless can be designed and engineered for any kind of bandwidth requirements you may have.  Higher performance equals more money, so it is always a balancing act of viability. Performance vs. $, simply put, bang for the buck.

Wireless broadband comes in several flavors, licensed and unlicensed.  Licensed means you own the spectrum for your geographical area.  For broadband, this is typically 2.5 GHz. This spectrum is being commercialized, as we speak, by outfits like Clearwire and Sprint.  They will commercialize it using fixed and mobile solutions, and using WiMax- type technologies (WiMax is currently commercially available, though rather expensive at the time of this article, especially for the centralized cell equipment required.)   There is an IEEE standards body currently overseeing WiMax technologies to ensure interoperability between vendors. The standards body is the IEEE 802.16 series, and is currently standardizing on 802.16E standards.

802.16E WiMax is also attracting competing technologies like LTE (Long Term Evolution) and HSPDA (High speed Packet Downlink Access).  Intel, by the way, is backing both technologies, thereby ensuring that they back a winner however the cards fall.

Evdo (Evolution Data Optimized) is typically used for PC air cards like the VZW offering.  This operates typically, but not exclusively, in the 400-900 MHz mobile phone spectrum and is good for up to 1mb download speeds, not really commercially viable for high throughput commercial operations.   There are other licensed technologies giving high speed point-to-point and point-to-multi-point operations capable of achieving speeds of up to 1GB, but these are very expensive and require specialized engineering.

On the unlicensed side, one can operate in the 900 MHz, 2.4 GHz, 5.2 GHz, 5.4 GHz, 5.7 GHz and 5.8 GHz spectrum. This is where the real bang for buck comes into play.  Equipment, in the unlicensed spectrum, is capable of delivering a very low latency 10mb/s to businesses.  Compare that to a 1.5mbps T1 costing $400-$700 per month from the local phone company. A rule of thumb when deploying these networks is that longer distances require lower frequencies and thus can carry less data.  Shorter distances allow higher frequencies and carry more data. Lower frequencies can punch through trees and buildings, higher frequencies can not. I typically use nominal, two-mile coverage from a 200’ tower in reasonably flat terrain.  Long point-to-point backhaul links of up to 40 miles carrying 50mb/s are not unheard of, but again, this depends on engineering design, terrain obstacles and existing RF noise.

Mountainous terrain is often not a bad thing, as a broadcast point can sit on an unpopulated side of a valley and easily cover the populated side of the valley.  In addition, rural areas, unlike cities, tend to have a much diminished level of RF interference, thus greater distances and throughputs can be attained.

In brief, wireless is most certainly capable of expanding your coverage beyond your existing footprint, and can expand in to other cities.  Literally hundreds of communities have already found this to be the case.

As our Chief Technology Officer John Herraghty points out, the wireless world is rapidly expanding and may offer communities a cost-effective means to connecting the last mile. The corporations engaged in the market are not small players and, for certain, their investments will drive both the growth and cost of these future networks.

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Founder, Beta Group

Cathy Horton is the founder of Beta Strategy Group. Before founding Beta Strategy, Cathy was a lawyer with the firm Thompson Hine. She has spent more than 20 years cultivating a global mergers and acquisitions and venture finance practice. Cathy spent 15 years in London, where she worked with global enterprises, governments and start-ups to foster and capture the value of strategic innovation. She developed a flair for bringing strategic partners together to form valuable market exchanges, shared product offerings and bundled services provision amongst partners. Also, while in London, Cathy consulted as a trusted advisor with the Cabinet Office of the Prime Minister on e-government, and with the Northern Ireland government, to help determine ways in which technology development could drive economic outcomes for Britain.

Comments

  1. There are several inaccuracies in this document.

    1) Although 2.5GHz is a high-bandwidth band, so is 3.6GHz and the new 700MHz band of which companies just spent 19 billion dollars acquiring (Verizon being the biggest player).

    2) EV-DO is turning in numbers of 2Mbps or more on download. However, it’s in the same frequencies as cell phones, not the 400-900MHz range.

    On the positive side, innovative RF engineering ideas are coming forth now that the big municipal Wi_Fi companies have now thrown in the towel. Smaller companies such as ours have designed systems that cost 1/10 as much as the older municipal Wi-Fi designs with better performance. It’s these kinds of ideas that will move wireless back into the limelight in a positive manner rather than just getting headlines for the spectacular failures of two extremely poor business models.

  2. Good start and you should also look at what some cities are doing with high bandwidth wireless, e.g. Chicago looking to deploy to deploy 1Gbps 2 to 5km links as a logical ring backed into fibre POPs.

    In our own work we are looking at using 200 to 600Mbps FDX rings (at 18GHz, up to 20km) as a tier 2 network to support an underlying WiMAX network @ 3.5GHz and 2.5GHz.

    There are many options and a combo FTTS (to the street) plus local WiMAX is also a winner as is CTTS (cable to the street) plus WiMAX – where it is no possible to do a dig because of terrain.

    Peter

  3. Some statements about FTTH are not correct.
    Yes cost is high but when done correctly it should not cost the users any more than WIMAX yet provide a much better service.
    FTTH with Wimax on top – a dream come true
    communitynetworks@live.com