All-fiber networks: lowering costs and increasing revenues to accelerate broadband penetration
What's standing in the way of accelerating the deployment of all-fiber networks? In most cases, it's high costs and low opportunities for revenue.
The solution to this issue has eluded broadband service providers for years. That said, I foresee great improvements in all-fiber network economics. This is mostly due to the work done by the Gig.U initiative, and the advancements of Optical LAN technology.
Gig.U's mission is to accelerate broadband deployment in the United States. I'm most impressed with its free-market approach. First, Gig.U members identify U.S. communities where fiber access has highest adoption and greatest ecosystem benefits. Then, they encourage economies of scale through consortiums and partnerships. The net outcome is an open forum between stakeholders to cultivate creative solutions to deploy broadband where it's needed.
Gig.U free-market approach
Gig.U founder Blair Levin simplifies the broadband business case down to the following equation:
CapEx + OpEx < Revenue + Ecosystem benefits factored by an element of risk (i.e., adoption rate)
We all can agree that all-fiber networks have tremendous ecosystem benefits. That leaves 3 critical moving parts to this equation - the need to lower capital expenses (CapEx), lower operating expenses (OpEx) and increase revenue to accelerate the deployment of all-fiber networks.
Optical LAN is one creative solution to lower costs and increase revenues.
Optical LAN lowers CapEx and OpEx
Optical LAN is a highly efficient Layer-2 transport medium built using PON technology. Its inherent benefits come from PON's ability to converge video, data and voice services at gigabit speeds over a single strand of fiber. It offers superior CapEx and OpEx savings compared to a traditional Active Ethernet LAN: 70% less capital, up to 80% less power and up to 90% less space. With the Optical LAN savings, Gig.U members can shift investment into broadband access initiatives.
Gig.U believes that you can achieve better economics by bundling the broadband needs of universities and surrounding communities. This holds true for Optical LAN, too. Similar to how cloud architecture converges networks and services, Optical LAN blurs the separation between WAN, access and LAN networks. So, the same Passive Optical Network (PON) service providers use can provide fiber access to LAN end-points. And, the same PON infrastructure enterprises or universities use for LAN infrastructure can serve surrounding campus and community anchor institutes (such as dorms, libraries or health centers).
Optical LAN increases revenue
In addition, Optical LAN helps service providers expand their business services portfolio. They can offer to consult, engineer, design, install and network management. They already possess this expertise, since they've deployed PON for many years. Additionally, service providers can gain new revenue by offering Optical LAN as a service. This compliments and differentiates existing hosted, managed and cloud-based business services. The PON can be managed remotely, decreasing churn with long-term leased fiber agreements.
Optical LAN can help Gig.U positively affect the economics of broadband penetration by reducing expenses and increasing revenue. With Optical LAN's recent traction in federal government deployments, I believe the time is right to factor it into the all-fiber network debate.
