IP: NTT Fiber to the home (not quite)

[Dave Farber <farber () cis upenn edu>]

Date: Thu, 3 Sep 1998 19:48:13 +0900
To: farber () cis upenn edu
From: ajp () glocom ac jp (Adam Peake)
Subject: NTT Fiber to the home (not quite)


Dave, stories about Japan's fiber to the home plans crop up every
so often, but they tend to have more to do with politics (what
the LDP and political parties would like to be seen to be doing)
than fact.  Following explains what NTT seems to be really planning
when it says FTTH, i.e. fiber to near the home.


Adam




Nikkei BP AsiaBizTech - 27-Jul-98


http://www.nikkeibp.asiabiztech.com/Database/98_Jul/27/Fea.01.gwif.html


NTT Readies Optical Fiber Network for Connection to Homes


July 27, 1998 (TOKYO) -- Nippon Telegraph and Telephone Corp. (NTT)
outlined its implementation schedule of fiber-to-the-home (FTTH), which
will start between 2001 and 2002, at the earliest. NTT is responding to
demands of residential users for earlier and more inexpensive optical
networks. Their needs for telecommunications services, such as the
Internet, are growing.


The pi System Will Promote FTTH


NTT started implementation of optical fiber links from telephone
stations to poles near each house in Kobe City, Nagoya City and Aomori
City in March 1998. This is called the pi System, and it is the initial
step toward full realization of FTTH.


The pi System is not sufficient to realize full FTTH, because it uses
conventional copper wire telephone lines from poles to residences (See
chart). However, players in the telecommunications industry hope the pi
System will help make FTTH a reality.


Currently, there has been little progress in introducing FTTH due to
expensive equipment and components of optical fiber systems. In return,
that means there has been no cost reduction of hardware due to delay in
introducing FTTH.


Therefore, the market needs a system for laying and extending optical
fiber cables to points near homes before FTTH can come into high
demand. The pi System was devised for this purpose.


There is an underlying reason for this trend. "A key factor is that
costs for installing optical fiber cables became almost equal to those
for laying copper wires in late-1997," said Akira Hirooka, Optical
Access Network Project Manager of NTT Access Network Systems
Laboratories.


He means NTT can also save costs by installing optical fiber cables
that have longer life and are less costly compared with copper wires,
which might be replaced after 11 years.


The pi System has a system configuration that enables the sharing of
telecommunications equipment among more than one subscriber, which
turns out to be a major reason for cost reduction in installation. The
system configuration is called passive double star (PDS). It allows 128
subscribers to share one system.


According to some industry estimates, NTT will have installed pi
Systems equivalent to 4-5 million circuits by fiscal 2000. NTT has not
revealed specific figures.


In this deployment, almost 3 million circuits will be constructed every
year after fiscal 2000. The massive implementation is expected then to
gradually bring about a downward trend in prices of telecommunications
equipment and components for optical fiber transmission.


Authentic FTTH Under Development by Manufacturers


If a home user requests an extension of an optical fiber cable to his
or her residential premise, it can be fulfilled as long as the pi
System reaches a pole near that home. But only 10 percent of users now
connected to all the circuits can enjoy FTTH services based on the pi
System.


Therefore, so-called "authentic" FTTH is being addressed by
manufacturers of telecommunications equipment and optical fibers,
meaning that all the households will have a direct optical fiber
connection.


For example, installation costs of FTTH will be reduced to the level of
copper wire installation costs in two to three years, according to a
researcher at Fujitsu Laboratories Ltd.


The costs of FTTH can be brought down to match those of copper wire
within 1998 or they can be less expensive in the near future, according
to a researcher at Matsushita Communication Industrial Co., Ltd. The
costs can be reduced along with competition among manufacturers, which
would work favorably for NTT's implementation of FTTH between 2001 to
2002.


There is a consensus among telecommunication equipment manufacturers on
the best system configuration for realizing an authentic FTTH:
asynchronous transfer mode-passive double star (ATM-PDS). ATM-PDS can
provide services for all users in a service area with a transmission
rate of a maximum of 156Mbps. This system can meet the needs required
for multimedia services.


However, there are some issues yet to be solved. For instance, current
ATM-related equipment is very expensive, since its sales target is
telecommunications providers and enterprises with a backbone network
system. Some speculate that ATM facilities would cost 1,000 times more
than synchronous transfer mode (STM) telecommunications facilities,
which have been introduced by NTT.


In summary, the market still observes unsettled competition between the
ATM-PDS technology and the synchronous transfer mode-passive double
star (STM-PDS) technology as to which should become the standard system
configuration of FTTH.


Opposition from Domestic Observers to NTT's Policy


NTT and other manufacturers have not yet obtained full support from
those who doubt the success of the scenario for introducing FTTH. It is
mainly because prices are too high to practically use FTTH, and the
implementation schedule is too slow.


It is easy to understand why the prices cannot be lowered. The market-
oriented principle of competition doesn't exist. Moreover, there is no
checking system for NTT's strategy, even if it misses a point.


"The Telecommunications Business Law should be revised so that carriers
other than NTT can provide high-speed services," said Toru Takahashi,
chairman of the Internet Association of Japan.


Another criticism was issued by Takashi Tsutsui of Teikyo University,
who said, "The Japanese government should establish a new law with the
same legal force as U.S. Telecommunication Act of 1996."


NTT plans to complete the full deployment of optical communication
systems by 2005. That will provide a high-speed service with a maximum
performance of 10Mbps based on the pi System. However, there are strong
arguments about whether users can really wait for the service until
2005.


"Asymmetric digital subscriber line (ADSL) technology should be
adopted, as it has been already available for commercial use in the
United States," said Masataka Ohta of the Computer Center of Tokyo
Institute of Technology.


NTT also has been conducting technical validation tests of ADSL,
wireless local loop (WLL) and Multimedia Mobile Access Communication
System (MMAC) for application to telecommunications services for home
users.


However, they are still positioned as complements to FTTH.


The only way to respond to naysayers is for NTT to provide inexpensive
high-speed services using FTTH based on ATM-PDS technology.


Hirooka of NTT commented, "FTTH is the best state-of-the-art
technology. No engineers in this field doubt that FTTH can become an
ultimate technology in telecommunications engineering."


Chart: Three Methods to Realize Full Optical Fiber Communication
Systems


NTT's expression, "the realization of optical fiber communication
systems in access networks," doesn't simply mean realization of FTTH.


NTT also includes both the central terminal and remote terminal (CT/RT)
method as well as the pi System to the category of the realization of
optical fiber communication systems.


Copyright  1997-98 Nikkei BP BizTech, Inc.