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August 29, 2012

Rural Cable Company Adopts Fiber to Home



By Gary Kim
Contributing Editor



If you have spent some decades following rhetorical flourishes from cable TV executives and telco executives about the respective strengths of their chosen access architectures, you can remember a time when considerable debate was conducted about the “best” way to build a broadband access network.

Cable TV executives touted the lower cost of hybrid fiber coax networks, while some telco executives touted the “future proof,” virtually unlimited bandwidth capability of fiber to home networks, and others just as strenuously praised the financial wisdom of fiber to neighborhood network designs that could be deployed faster, at less cost, than fiber to the home.

Rarely have any telcos ditched traditional FTTH or FTTN designs for HFC, nor have cable operators ditched HFC for FTTH or FTTN. And though one should not overplay the significance, one rural cable TV provider has decided to deploy a FTTH network.

Circumspection is warranted for several reasons, as important as the upgrade is for Country Cablevision, which is using a “broadband stimulus” grant to build a FTTH network in the rural mountain counties of Mitchell and Yancey, NC.

Country Cablevision, one of the first cable TV operators in the United States to embrace FTTH, is doing so in large part because it got $25.3 million from the United States Department of Agriculture Rural Utilities (RUS) to provide high speed Internet services to more than 33,000 people, 1,900 local businesses and 120 community institutions, Clearfield says.

First of all, the upgrade is a somewhat clear example of a “non-market” transaction. Without the subsidy, Country Cablevision would not likely have taken this route. In a wider sense, it can be argued that most rural, independent and small networks in fact have no traditional “market opportunity,” in the absence of subsidies. 

So no matter what happens in the rural and small operator space, it does not affect strategic options for the handful of larger suppliers that control 80 percent of the customers. Small operations with high subsidy support are not, in other words, an indicator of what is possible or desirable for the leading firms that supply most connections in the United States.

It is noteworthy that, with a change of support mechanisms to “broadband” rather than “voice,” a cable operator has gotten funds that traditionally go to “telcos.” But that shift has been going on for some time, especially with respect to wireless network providers getting funds that traditionally would have gone only to suppliers of fixed network services.

FTTH image via Shutterstock

The potential implication, within the rural markets space, is whether the shift to broadband might have larger repercussions in the rural cable TV provider and rural telco businesses. If broadband is the service deserving of subsidies, then perhaps cable wins, and telcos lose, over time, as funds potentially shift to cable networks.

To be sure, some proponents of FTTH have specifically been working the cable market for some years, especially as growth opportunities have shifted to broadband access rather than “television” revenues.

The traditional bandwidth efficiency of point-to-point, or on demand TV delivery touted by proponents of “switched digital TV” now make more sense even for cable operators that historically have relied on point-to-multipoint delivery.

Just how significant that might become in later years still remains to be seen, though.

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Edited by Brooke Neuman
 
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