If you believe some pundits and industry observers, widespread deployment of FTTH (fiber to the home) is just around the corner. Some also suggest that recent FCC decisions deregulating new FTTH deployments as well as falling equipment and installation costs are pushing fiber deployment over the tipping point.

Because full fiber loops can carry data at speeds of 100 Mbps, companies can easily provide voice, data and video services over a single line. Controlling this fat pipe would allow the Bell companies to offer complete service bundles to match anything offered by the cable providers. However, there remain substantial barriers to major fiber deployment that suggest copper will remain the industry's workhorse for many years to come.

Cost continues to be the single biggest obstacle to widespread fiber deployment. The CIMI Corporation consulting firm estimates that infrastructure costs for FTTP (fiber to the premises) are about five times as much as DSL in the best case scenario. Current estimates find that FTTP deployment costs are between $150 and $200 per linear foot (including trenching and additional costs such as insurance), depending on the region and population density where deployed.

The Bell companies also have significantly reduced their capex (capital expenditures) funding. Traditionally, access line growth has been the principal driver of capex. However, with access line numbers falling, there has been less money available for network investment. RBOC capital expenditures have been steadily falling since peaking in the year 2000.

Finally, the Bells currently have in place nearly twice the copper they need for current working lines. Largescale replacement projects would trap a tremendous amount of capital in investments that might take years to pay off. These investments can be difficult to justify in the face of declining access line numbers. New deployments of fiber might make sense where there is a need to refurbish or augment the current plant, but where a glut of copper remains, it is difficult to justify the stranding of such a useful asset.

Relying on historical census data to predict future deployment, the optical fiber developer OFS completed a forecast of likely FTTH deployments in the next 10 years. The company forecast just over 20 million FTTH subscribers by 2010. Even in this optimistic scenario, the total would equal only about one-tenth of the phone customers nationwide.

The Evolution of Copper

Most industry watchers are familiar with the mechanics of DSL technology. DSL uses more bandwidth than an analog voice call, making use of frequencies transmitted above 4 KHz. For traditional residential ADSL service, more bandwidth is used for sending information downstream to the user, with fewer channels reserved for sending data upstream. Thus, ADSL transfer rates are faster downstream--perfect for web surfing and similar asymmetric applications.

When these signals reach the CO, the data they represent are aggregated by a DSLAM (DSL access multiplexer), thousands of which are deployed in COs across the country to connect customers to high-speed networks.

DSL is, however, a distance-sensitive technology. The further the user is from a CO, the more degraded the signal becomes and the slower the transfer rate. The extreme distance limit for ADSL service is 18,000 feet, and download speeds up to 8 Mbps are only available to a distance of about 6000 feet. Upstream speeds are typically between 128 kbps and 640 kbps.

One perception of DSL is that it's a mature technology facing near-term obsolescence. Nothing could be further from the truth. Creative companies have continued finding new ways to exploit the decades-old legacy copper network. Technologies that will be commercially available within the next year or two will allow data transfer at speeds exceeding 50 Mbps, fast enough for even the most bandwidth-intensive applications.

Companies could use copper to transmit not just voice and data, but also full-motion video over multiple high-definition television channels. These future varieties of DSL promise to surpass current high-speed connections by offering download speeds 30 times higher than what is now commonly available. The following DSL types are either currently in service or will be commercially deployed within the next 12 months (see Table 1):

* IDSL (ISDN DSL) allows symmetric downstream and upstream transfer rates of 144 kbps. The primary advantage of this technology is that it can be provided to customers who are located far from COs.

* ADSL (asymmetric DSL) is what most people refer to as DSL. ADSL is a consumer-class service that allows downloads at speeds up to 8.0 Mbps if the customer is within 6000 feet of a CO. Typically, however, maximum ADSL download speeds are sold and capped at 1.5 Mbps.

* SDSL (symmetric DSL) is a business-class service providing equal upstream and downstream transfer speeds. Unlike ADSL, SDSL requires a second loop separate from the customer's voice service.