Posted by: Neal Lachman | October 2, 2008

Introduction – 1.2. The Industry Buzz and The Tall Order

In the last few years it has become quite fashionable for politicians, lawmakers and mayors to make statements such as “we need a next-generation communications infrastructure; the solution is to extend fiber-optics to homes and businesses because it will help our nation grow economically and be a competitive force.”

Granted, Fiber-To-The-Home/Office and Broadband Wireless Access embody the future of wired and wireless communications respectively, but the hype surrounding these two industries has taken on gargantuan proportions, which has led many politicians and lawmakers, and even pragmatic businesspeople, to believe that it is an easy task that can be taken care of by merely investing a few billion dollars. As we will explain in this blog, to fully realize the promise of a “next-generation digital/communications infrastructure,” there is significantly more to FTTH/O and BWA than simply pulling a fiber-optic wire to a home or slapping a Wireless access node on a lamp post.

The FTTH/O and BWA industries are becoming increasingly fogged with vague promises and misconstrued information, whether knowingly or unknowingly, from aggressive vendors and (potential/hopeful) operators. Therefore, we deem it wise to share the fruits of eight years of research, development, and modeling through this blog.

This blog from GigaSpeed International, Inc., the pioneer in large-scale FTTH/O and BWA planning and modeling, is published to separate hype from reality, as well as to inform those interested in the future of telecommunications, digital media and digital infrastructures; whether mobile, wireless, wired, or fixed wireless about the fascinating FTTH/O and BWA industries.

For the purposes of this paper, “The Business Case Scenario” developed by GigaSpeed USA, a subsidiary of GigaSpeed International, Inc., is used as a guideline.  The Business Case Scenario is the basis of GigaSpeed’s business planning and strategy for the last few years. This scenario entails 20 million FTTH/O connections, and 18.5 million BWA subscribers in USA’s major metro markets.

The total costs of the FTTH/O and BWA projects (combined) as described in the Business Case Scenario are estimated at US$70-75 billion ($70B). If the total market size/opportunity in the United States were to be six times the size of GigaSpeed USA’s proposed projects, the industry would have to spend almost half a trillion dollars to build nationwide FTTH/O and BWA infrastructures. That is a tall order. The good news, however, is that GigaSpeed has devised a comprehensive strategy that minimizes the actual investment needed to build this expensive infrastructure. And, while we deem ourselves successful in our attempts to correctly project the anticipated costs and investments required for such a tall order, we believe that it will be very hard for others to copy us.

In March 2003, I published a 20-page report, “FiberBroadband versus PON”, in which I warned of the technological limitations of Passive Optical Network technologies compared to our FiberBroadband Strategy. In 2005, we shared our FTTH and BWA white papers with industry players such as Intel and EarthLink’s late President & CEO, Gary Betty.

In July/August 2007, we published a groundbreaking 160-page Business White Paper.

Now, late 2008/ early 2009, we publish this blog and we plan to publish and distribute a tailor-made BWP for several regions, starting with Holland.

But while we share some in-depth know-how on the FTTH/O and BWA industries, and while our papers and even this blog could be deployed as a blueprint for any hopeful company in these industries, we are (of course) not sharing our entire secret sauce recipe. We have, for example, omitted any reference to the technologies and frequencies we will use and deploy in our systems. The poor state in which these two brand-new industries currently find themselves, however, demanded that we include a lot of steak with the sizzle.

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