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Cost of Rural FTTH Deployment Is Dropping

Randy Sukow Jan 29, 2016

Broadband deployment remains more costly in low-population, rural areas compared to urban areas. That’s not going to change anytime soon. But companies building and providing fiber to the home (FTTH) services say that new building techniques and market conditions are making rural deployments increasingly workable options.

“Based on these market factors, the should conclude that FTTH deployments in all but the very least dense rural areas are economically viable and will be increasingly so,” according to a recent ex parte letter to the Commission from counsel for the American Cable Association. Representatives from ACA, the FTTH Council and Clearfield Inc., a company that builds FTTH networks, gave a presentation of current technology developments to Commission members and staff.

The group referred to a recent Clearfield project in rural Minnesota that centered on using open architecture equipment and other cost-saving techniques. “That resulted in the FTTH deployment costing approximately $800 per home passed, which is similar to the cost of an urban build,” the letter said. The group noted FCC estimates from five years ago that fiber deployment in areas with 10 households per square mile then cost $1,600 per home.

“The payback period for FTTH builds also has decreased materially in most rural areas to seven years, if not less, and should continue to decline,” the group said. They attributed that improvement not only to lower deployment costs, but also to lower operating costs and greater revenue opportunities. Fiber services with higher speeds support more broadband applications, which tends to increase take rates, the group said.

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