The Road to UTOPIA

In the National Broadband Plan, there is hardly any mention of a wholesale or “unbundled” model of fiber-to-the-home. That’s unfortunate. There are many examples of successful deployments of fiber in which the physical part is built by the public sector (or through public-private partnerships), with private providers stepping in to resell access for voice, video, and data at the retail level. For a nitty-gritty description of one European city’s experience laying fiber under cobblestones and into canals,  you can read about Amsterdam’s CityNet project, written by the company’s CEO.

The US does have many open access projects in which municipalities in underserved areas take the lead in financing fiber’s significant sunk costs.  There’s one deployment that stands out, linking together over 16 cities in Utah and serving about 40,000 households. It’s called the Utah Telecommunications Open Infrastructure Agency, which acronymized becomes UTOPIA.

UTOPIA’s  information page boasts an  embarrassingly large number of service providers to choose from… 9!  It is completely unlike the vertically integrated models that are in force here in New Jersey, and in many other communities where there’s one cable and one phone incumbent.

Utah’s download speeds already achieve the 100 Mbps benchmark set in the NBP.  (Congrats to UTOPIA.)  Business can pay for even  higher speeds if they want.

In open-access fiber projects, costs depend on several factors, but principally on the technology used. The type of optical technology(and  fiber layout)  will determine the wholesale rates that the cities charge to providers and ultimately flows back to bondholders.

Passive optical networks (PONs) are less costly to build and maintain since this technology eats up less fiber strands by delaying the “fan-out”  until the fiber gets closer to the actual premises.  Low-cost, low-maintenance passive splitters (no electric outlets needed) split the beams of laser  that  light up the single strands that reach  households.

Passive is popular. It has the most deployments and is, by the way, the technology behind Verizon’s FiOS.  However, it does introduce failure dependencies on the long shared strands, and its passive nature means the computer intelligence isn’t there to switch data streams when a physical failure arises.

The biggest  disadvantage of PONs is the limits on bandwidth—remember lots of household are sharing access on the longer trunk strands—typically maxing out a  100 Mbs. For an optical project to be viable it has to support on-demand video  (in  a “triple-play” bundling of voice, video, and data)  for  which you need a minimum of 100 Mbps to be in the game.

Both the Amsterdam and Utah project chose a more expensive optical option with longer fiber runs to the home and active electronics, called Active Ethernet,  which regenerates the optical signal from the central offices. With  signals relayed, distance considerations are less critical, playing into  lower per subscriber costs.

A major benefit of  an active approach is that individual fiber strands can be now unbundled and wholesaled to providers, which was a regulatory consideration for the Amsterdam project.

In UTOPIA ( I like the way that sounds), there’s strict separation between the physical layers and service access: service providers don’t control the strands of fiber, and  they don’t even control the data link layer, which is non-proprietary, open standard optical Ethernet.

What this means is that  Utah charges wholesales  rates on a per service per subscriber basis, and lets voice-video-telephony service providers differentiate their digital wares.  If a particular company doesn’t work out, there are others who can be plugged into the Ethernet fabric.

You can almost consider UTOPIA a giant local area network with the service providers acting as plug-and-play components you pick up at Staples. (Not quite, but a good enough.)

There’s good news and bad news.

First the bad: the $400 million UTOPIA project has not been able to attract the 200,000 households needed to make the project viable, and it is now struggling to meet bond payments.

And the good: Google’s plan to experiment with a FTTH network could be a white knight for the project. Even Utah’s Governor is stepping in to encourage Google’s participation.

In my humble, Google and  Utah’s open-access project should be the start of a beautiful friendship.

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• UTOPIA Applauds Governor Herbert’s Support of Google High Speed Fiber Network Partnership Bid (eon.businesswire.com)
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• Voonami Launches on the UTOPIA Network (eon.businesswire.com)
• Broadband Open Access: Lessons from Municipal Case Studies