1. Fiber:
Not Just for Breakfast Anymore
Heather Burnett Gold, President FTTH Council Americas

2. The world is going all-fiber
Google gets over 1000 applicants
C Spire announces build out of Mississippi
CenturyLink announces Omaha, Las Vegas
VTel, Smithville Digital announce upgrades to
gigabit speeds
Minnesota already has over 50 operators

3. North American FTTH Growth
Homes Passed
Homes Marketed
Homes Connected
30
25
20
2013 Homes Passed: 27.7M
2013 Homes Marketed: 25.5M
2013 Homes Connected: 10.7M
15
10
5
0
Sep' 13
Mar '13
Sep '12
Mar '12
Sep '11
Mar '11
Sep '10
Mar '10
Sep '09
Mar '09
Sep '08
Mar '08
Sep '07
Mar '07
Sep '06
Mar '06
Sep '05
Mar '05
Sep '04
Mar '04
Sep '03
Mar '03
Sep '02
Mar '02
Sep '01
Source: RVA annual Provider & Consumer Studies

4. Number Of U.S. FTTH Communities
Based on the 2012 Consumer Study,
approximately 8.5% of U.S.
municipalities had FTTH – or about
1,759
Source: RVA 2012 Consumer Study

5. FTTH Take Rates
U.S. Take-Rates Versus Homes Marketed Reach 45.8%
Verizon Build Starts
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Sep '13
Mar '13
Sep '12
Mar '12
Sep '11
Mar '11
Sep '10
Mar '10
Sep '09
Mar '09
Sep '08
Mar '08
Sep '07
Mar '07
Sep '06
Mar '06
Sep '05
Mar '05
Sep '04
Mar '04
Sep '03
Mar '03
Sep '02
Mar '02
Sep '01
Source: RVA annual Provider & Consumer Studies

6. FTTH Take-Rates Are Even Higher In Many Cases
Take-Rates Vary From 25% To 81%
Real Estate Dev (Greenfield)
81%
Cable TV/ MSO (Greenfield)
62%
Competitive Prov/ CLEC Rural
52%
ILEC Tier 2 & 3
51%
Muni Retail Rural
48%
Tier 1 ILEC Overbuild
38%
Competitive Prov/ CLEC…
Muni Retail Urban/Suburban
31%
30%
Muni Wholesale
25%
0%
20%
40%
60%
80%
100%

7. FTTH is already strong in rural areas
With over 500 FTTH providers in Tier 2 / Tier 3 markets
Primary
driver in area:
Tier 3s
There are over 500 FTTH
providers in Tier 2 / Tier 3
markets
Verizon
Munis
Source: RVA 2013 Provider & Consumer Studies
U.S. FTTH State Penetration
State Households Connected Ranges From 1% to 33%

8. FTTH in rural areas benefited from the ARRA stimulus
In 2009, major funding opportunities were made
available through the stimulus.
Broadband Initiatives Program provided $3.5 billion to
expand and improve connectivity in rural areas and
small towns/cities
Broadband Technology Opportunities Program gave
$3.7 billion focusing on middle mile
infrastructure, “community anchor institutions,”
broadband adoption and mapping

9. And the market is still ripe
According to RVA, LLC, 73.7 million homes in
suburban and rural areas are not yet passed by FTTH
Take rates in Tier 2 and 3 markets exceed 50 percent
And FTTH results in higher ARPU over other types of
broadband builds in the same areas0o

10. Why Is the World is Changing?
In the past 15 years, we’ve seen…
The Internet
iPods
HDTVs
DVRs
Smartphones (Blackberry, iPhone, etc.)
Tablet computers
All of these revolutionary technologies require
higher speed networks
We must expect and plan for more and faster
changes in the future!

11. Video on all Screens - HDTV
An image is built on a screen, pixel by pixel.
One HDTV program = 8 - 12 Mbps
Pixel
1 house = 48 Mbps just for video, today…
How about tomorrow?
TV
12 Mbps
1080
pixels
TV + DVR
24 Mbps
1920 pixels

12. App Uses Already Available Are Increasing
Internet Activities Completed At Least Once/Month By FTTH Users
68%
Shop online
25%
Upload large files
10%
Use VOIP for audio
Download/ stream video to…
5%
36%
24%
23%
13%
20%
Upload video content to Internet
7%
Use two-way video conferencing
0%
81%
2010
2013
19%
20%
40%
60%
80%
100%

13. Why Fiber?
Greater Bandwidth, Longer Distance, Lowest Cost / Bit
Copper
Bandwidth
Distance Cost per Bit
Fiber
2,400 Pair Copper
Cable
100 Gbps to 1KM
1 Fiber Cable
> 50 Tbps
> 5,000 KM
Bandwidth
Distance Cost per Bit

14. Why fiber?
Metal cables and wireless have significant limitations
Fewer truck rolls with fiber
Lower power consumption versus DSL/HFC
Not affected by lightning, rain, humidity
issues
No maintenance needed for amplifiers
Feature
Benefit
High bandwidth
High information carrying
capacity
Low attenuation
Long distances without
repeater, which is less
expensive
Light weight
Small size
Easier installations
Unobtrusive
No metallic
conductors
No grounding problems
No “crosstalk”
Passive
No power requirements
No circuit protection needed
Difficult to tap
Very secure
Inexpensive
Widely deployable & cost
effective

15. With An All Fiber Network
You Build It Once – Its Build to Last

16. Typical FTTH Architectures
PON (Passive Optical Network)
Incorporates a signal divider, such as
an optical power splitter
One fiber at the central office feeds
many fibers in the field
G-PON (Gigabit PON) and GE-PON
(Gigabit Ethernet-PON) are the most
common architectures
Point-to-Point (“Active Ethernet”)
One fiber in the head end = one fiber
in the field
Central office or
remote cabinet
OLT
PON
Optical Power Splitter
or wavelength filter
Central office or
remote cabinet
OLT
Point-to-point

17. Today’s Common FTTH Architectures
Curre
nt Gen
Next
Gen
Curren
t Gen
Next
Gen
Point to
Point
(Active
Ethernet)
2.4
Gbps
total
10
Gbps
total
1.2
Gbps
total
10
Gbps
total
100 -1000
Mbps per
sub
GPON
Downstream
Bandwidth
GE-PON
Upstream
Bandwidth
1.2
Gbps
total
10
Gbps
total
1.2
Gbps
total
10
Gbps
total
100 -1000
Mbps per
sub
Typical
distance
20 km
20 km
20 km
20 km
20 km
Wavelengths
(nm),
Downstream
Upstream
Central office or
remote cabinet
OLT
PON
Optical Power Splitter
or wavelength filter
Central office or
remote cabinet
OLT
1490
1310
1577
1270
1550
1310
1577
1270
1550
1310
* NG-PON 2 = 40 Gbps downstream/10 Gbps upstream
Point-to-point

18. Passive Networks +/In US – Passive Optical Networks is the predominant network
architecture (94%)
PONs have some distinct advantages.
They're efficient, each fiber optic strand can serve up to 32 users.
Have a lower building and maintenance costs
Passive optical networks also have some disadvantages.
They have less range than an active optical network,
Make it difficult to isolate a failure when they occur.
Because bandwidth in a PON is not dedicated to individual
subscribers, data transmission speed may slow down during peak
usage times in an effect known as latency.

19. Active Networks +/Active optical networks advantages
Reliance on Ethernet technology makes
interoperability among vendors easy.
Subscribers control throughput
Active optical networks disadvantages.
Require at least one switch aggregator for every 48
subscribers.
Requires power, so inherently less reliable than a
passive optical network.

20. FTTH matters for rural residents
Can erase educational inequities
Reduce health care challenges like declining
physician numbers, access problems
Can turn rural America into a "middle shore"
for high-tech job opportunities

21. So – How Do You Get There?

22. Engage the community
FIND A CHAMPION
Create a steering team
Recruit local organizations
Use their language, not yours
Establish your network as the game-changing asset
Get people thinking and talking about your network

23. Build the Business Plan
What resources are in your region? Check the FCC’s
Broadband Deployment Map as a start
Estimate Cost to Deploy
Various state groups (i.e. Blandin) have model
spreadsheets
Find experts – ask others who have deployed
Estimate what you can bring to the table
Demand
Assets

24. Basic math blocks deployments
Benefits Accruing To:
Investor in the network
Content and applications
Equipment and devices
Local community
The region
The country
Total
benefits
of
high speed
networks
But the only benefits that matter for the investment case are
the benefits that matter to the investor… and as to those…

25. Initial Equation May Not Appeal
to Investors.
For the Investor, the equation usually looks like this:
C + O > (1-r)R + SB + (-CL)
Costs
C:
O:
r:
R:
SB:
CL:
Benefits
Capital Expenditures
Operating Expenditures
Risk
Revenues
System Benefits (Benefits that drive increased revenues outside the
communities where the new or incremental investments are made)
Losses due to competition
In short, the costs outweigh the benefits to the investor.

26. Communities can change the math.
But how do we do that?
C + O < (1-r)R + SB + (-CL)
Use existing assets, partnerships and
opportunities to move the arrows.

27. Communities have Resources
Reduce Cap Ex
Reduce Op Ex
Reduce Risk
Increase Revenues
Increase Ecosystem
Benefits
•Build to Demand Model
•Access to ROWs, Facilities
•Reduce Regulatory Time
•Access Payments
•Reduce Ongoing Regulatory Costs
•Utilize Existing Billing Platforms
Basic Math for
an Upgrade
•Build to Demand
•Standardize Functions Across Areas, Vendors
•Demand Acceleration/Aggregation
•Marketing Platform
•New Services
•Distributed Innovation
•Seeding Long-Term Growth

28. Lowering costs:
Reducing CapEx and OpEx
Decreasing Costs
Granting a provider access to existing physical assets ahead of time can decrease the costs of building or
upgrading a network. These include dark fiber, conduit systems, potential future fiber and light poles.
Getting institutional partners involved. University communities have access to regional optical networks / open
peering & routing to R&E networks
Expediting local permitting reduces the amount of time employees are waiting, lowers the capital expenditure
costs while being little or no cost to the community.
Lowering or providing no cost permits for aspects of construction excavation, traffic control, railroad crossing
eases capital expenditure burdens.
Assist with obtaining local rights of way or agree to obtain and assign rights of way to a potential provider
partner to lower construction costs.
Institute a Dig Once policy to ensure conduit is installed prior to street closings, lowering costs for laying fiber.
Create incentives to encourage Multi-Dwelling Unit owners to create a common telecom entrance facility
requirement, lowering barriers to entry for potential providers.
Streamline inspections for next generation network projects.
Pre-authorize use of construction methods like micro-trenching.
Ensure competitively neutral process for waivers for construction decisions regarding cabling and trenching.

29. Reduce Risk, Increase Revenue
Increasing Potential Revenue
Marketing services to the community
Effort to increase uptake of existing business services
Assist with local political support
Finding and securing local grants
Exclusive marketing rights
Named branding opportunities
Anchor institution, enterprise and residential revenue commitment through
demand aggregation
Interested community and MDU owners willing to bundle the cost of services into
rent for tenants
Over the top services

30. Funding
Exhaust all Federal, State and Local options
Federal
CAF – new experimental dollars for all types of entities
Schools and Libraries
Economic Development Agency loans
RUS – loans and grants
State
Blandin Foundation

31. Implement/Build
Issue an RFP to determine what kind of
ownership/network will work
Find a technical expert to assist in RFP review and
implementation oversight
Communicate with your constituents every step of
the way
Where do you deploy first?
What applications do they want?

32. Many paths you can follow
A private entity completely owns the network and
there is no public ownership
Private
Third Party: A service provider owns the network and
provides retail and wholesale services
Public-Private
Partnership
PPP Open: Network owned by PPP, has an open
wholesale network and may provide retail services
PPP Not Open: Network owned by PPP, not
necessarily an open wholesale network but must
provide retail services
A public entity completely owns the network
infrastructure
Public
A public entity owns or funds part of the infrastructure

33. Lots of Resources to Assist…
But You Can’t Afford to Wait
Blandin Foundation Toolkit -http://broadband.blandinfoundation.org/toolkit/
FTTH Council Community Toolkit -http://www.ftthcouncil.org/communitytoolkit
Webinar on New FCC Rural Funding Experiments -http://www.ftthcouncil.org/p/ca/vi/sid=82