More Fiber Needed for OTT Explosion: FTTH Council

You’d expect the Fiber-to-the-Home Council to be bullish about the need for residential high-speed capacity. 

Yet the just-released FTTH Council report literally goes over-the-top in extolling the explosion in over-the-top video distribution as a fundamental rationale for installing fiber optics to provide the “unparalleled bandwidth and super-fast connectivity” (in the words of Council president Heather Burnett Gold) that the Internet-centric on-demand video environment needs

Significantly, Gold’s recommendations – based on a new FTTH Council study of viewing patterns – coincides with Cablevision Systems CEO James Dolan’s suggestion that cable’s future may lie in broadband, rather than linear video delivery.

“This is actually about more than bandwidth,” said Gold.  “It’s about having unwavering speed and a noise-free network so that over-the-top services and applications to play flawlessly, without any hesitation or buffering.  And on that issue FTTH networks have proven themselves as the consumer’s access technology of choice.”

The FTTH Council reportsuggests that the growing demand for OTT content “will further accelerate demands for more bandwidth and faster connectivity in North American households, pushed by wider availability of Internet-connected televisions, growth in the number of simultaneous video streams per household and the development of more robust streaming standards to support high quality HD and super HD video.”

The Council’s conclusions are based on a survey of 2,000 U.S. and Canadian subscribers to fixed broadband services – cable, DSL and FTTH – conducted by RVA LLC, a market research firm.  RVA estimates that 40 percent are accessing at least some video programming through OTT video services such as Netflix, Hulu, Amazon and iTunes, as well as through a variety of applications for mobile devices through the Internet.

Among viewers under age 35, the figure jumps to 70% according to RVA.  The survey found that at least 80% of heavy users of mobile devices say they connect them to their broadband service via Wi-Fi when they are using them at home. 

Gold also points to a recent Convivia report on streaming capacity and quality, which my colleague Leslie Ellis cited earlier this week. The Convivia study found that 60% of the streams suffered from some quality degradation leading to re-buffering, slow start up or poor picture quality.

“When you add up the accelerating demand for sharper video, uninterrupted streaming and faster downloads, it is clear that North America will increasingly need the unparalleled bandwidth and super-fast connectivity that fiber to the home networks deliver,” Gold said.

Early this year, RVL issued a bullish “North American Fiber To The Home and Advanced Broadband Review and Forecast to 2017” Report, which predicted that by 2017, “revenue from applications and services beyond the triple play and directed specifically at high bandwidth users” will cumulatively account for $9 billion.  That sum is on top of the cumulative $18 billion for FTTH deployment during the same period.  RVA also predicts that the number of high bandwidth capacity users (50, 100, or even 1000 Mbps/1 Gigabit) “will soon grow rapidly and represent a market niche worthy of serious attention.”  

As part of the current FTTH Council study, participants were asked to test the bandwidth they are currently receiving via FTTH subscribers reported an average of 23.9 megabits per second download speeds and 14.2 mbps for upload capability, compared to averages of 15mbps/2.8mbps for cable and 4.6mpbs/0.7mbps for DSL households. The Council characterized it as “a growing gap” between fiber and other access technologies.

While the FTTH Council research comes to the unsurprisingly self-serving conclusion that FTTH offers the best solution for the shifting broadband viewing juggernaut, the underlying principles are becoming widely acknowledged.  Beyond the cord-trimming, OTT rhetoric of retrans battles is the reality that bandwidth matters. 

Gary Arlen

Contributor Gary Arlen is known for his insights into the convergence of media, telecom, content and technology. Gary was founder/editor/publisher of Interactivity Report, TeleServices Report and other influential newsletters; he was the longtime “curmudgeon” columnist for Multichannel News as well as a regular contributor to AdMap, Washington Technology and Telecommunications Reports. He writes regularly about trends and media/marketing for the Consumer Technology Association's i3 magazine plus several blogs. Gary has taught media-focused courses on the adjunct faculties at George Mason University and American University and has guest-lectured at MIT, Harvard, UCLA, University of Southern California and Northwestern University and at countless media, marketing and technology industry events. As President of Arlen Communications LLC, he has provided analyses about the development of applications and services for entertainment, marketing and e-commerce.