What is FTTH?
Fiber to the home (FTTH) is the delivery of a communications signal over optical fiber from the operator’s switching equipment all the way to a home or business, thereby replacing existing copper infrastructure such as telephone wires and coaxial cable. Fiber to the home is a relatively new and fast growing method of providing vastly higher bandwidth to consumers and businesses, and thereby enabling more robust video, internet and voice services.
Connecting homes directly to fiber optic cable enables enormous improvements in the bandwidth that can be provided to consumers. Current fiber optic technology can provide two-way transmission speeds of up to 100 megabits per second. Further, as cable modem and DSL providers are struggling to squeeze increments of higher bandwidth out of their technologies, ongoing improvements in fiber optic equipment are constantly increasing available bandwidth without having to change the fiber. That’s why fiber networks are said to be “future proof."
Why use a P3(Public Private Partnership)?
P3 – Public Private Partnerships provide a collaborative approach for the RECs to provide FTTH services to their membership while mitigating the entire risk associated with such a project. The basic structure of the relationship consists of private capital (i.e., Venture Capital, Private Equity, etc.) providing a majority of the capital for the fiber infrastructure and the REC providing a minority amount of the required capital. However, the win-win comes in the form of synergies given the current electric distribution infrastructure and associated ROWs as well as the established customer base. In addition, this structure has all the elements of a sound business model: providing a requested & valuable service; sound financial model; exit strategy for the private capital group; pre-determined acquisition for the REC with start-up risk removed. P3s have become a very attractive structure for major infrastructure projects such as this. Given the REC’s membership desires/demands for FTTH coupled with the BODs limited appetite for risk this model has the potential to become the standard for FTTH projects in Rural America!
Why is Fiber-to-the-Home Future Proof?
The biggest benefit of fiber is that it can offer much faster speeds over much longer distances than traditional copper-based technologies like DSL and cable. The actual service depends on the company providing the service, but in most cases fiber is the best bang for the buck broadband and future-proof for as long as we can tell. Even if typical broadband speeds become 1000 times faster in 20 years, a single existing fiber-optic connection can still support it.