1. Lessons from a Broadband Society
FTTH in Japan
Lessons from a Broadband Society

2. AFL Telecommunications:
AFL = Alcoa Fujikura, Ltd.
Established in 1984 to provide optical products for power utility applications.
Headquartered in Franklin, TN.
Major manufacturing operations in:
Duncan, SC
Belmont, NH
Mexico and the U.K.

3. Overview:
Japan is experiencing widespread deployment of fiber-to-the-home (FTTH).
Deployment is driven by a competitive telecom environment.
Power Utilities are a key player in this environment.
Competition and economy of scale have enabled development of inexpensive and scalable technologies.
Public Power can help lead the United States toward similar competition and benefits.

4. FTTH In Japan:
Jul OF Networks Co., Ltd. Private research results

5. Number of FTTH Subscribers in Japan total number of subscribers
Rate of Deployment:
Number of FTTH Subscribers in Japan
1,200,000 – 1,300,000
Carrier
total number of subscribers
No. of increase / month
NTT east
141,047
Jul. 2003
30,000
NTT west
151,000
Usen
124,300
12,500
TEPCO
10,000
1500
Jun. 2003
Chubu
Electric Power
3,800
500
K-Opticom
46,000
2,500
Energia
6,000
2000
QT-Net
18,000
2,000
587,000
81,000 increase / month
2003
June
July
End of 2003
Aug OF Networks Co., Ltd. Private research results

6. Why this deployment rate?
Japan has a national broadband policy. However:
FTTH deployment is not government subsidized.
Labor rates to install new cable are generally higher than labor rates in the U.S.
High population density enables DSL of 10 Mb/s. DSL, cable modem, and wireless are all widely available.
The nationwide number of landline voice subscribers is actually decreasing.
So, why FTTH?

7. Reasons for FTTH Deployment:
Competition
Nothing
The Winner gets there “first with the most.”

8. The View from Tokyo: TEPCO (Fiber) Cable TV TEPCO (CATV) Usen (music)
Usen (Fiber)
NTT Fiber
NTT Telephones

9. Who is Competing? NTT Incumbent Largest deployer of FTTH USEN
Sells data, video, and music on demand
Second largest deployer
5 of the top 7 deployers are power utility companies.
Some municipalities have deployed their own networks.

10. Implications for the United States:
Where there is infrastructure-based competition, no one can afford to be “overbuilt” with a superior technology.
Japan is deploying a strong national telecom infrastructure by encouraging competition.
Power utilities can be a key competitor.
U.S. Public Power companies serve 40 million Americans.
Typically in areas with a shortage of high speed data options.
Therefore, Public Power is a good place to start.

11. Services Available over FTTH:
Carrier
Provided Services over FTTH
Internet
Telephone
Video Streaming
NTT east
VoIP
(by NTT communication)
NTT west
Usen
MPEG over IP
TEPCO
Chubu
Electric Power
K-Opticom
Energia
QT-Net
Jul OF Networks Co., Ltd. Private research results

12. Services Available over FTTH:
Where is the so-called “killer application?”
Japan’s carriers have found a solid business case for future-proof media in today’s applications.
FTTH offers good cost-distribution.
FTTH also means that your competitors are not going to render you obsolete (assuming you have competitors).

13. Technology Behind the Services:
Designed around two objectives:
Deliver enough bandwidth to support all services.
At price points which allow cost-recovery for data-only services.
Low Cost of Entry
Usually Ethernet-based.
Security and admin features to enable operation in the telecom environment.
Highly scalable.
$400-$450/sub in “last mile” electronics

14. + ISP fee (less than 2,000 Yen)
Cost of Services:
Carrier
Service fee / month
in Yen
in $
NTT east
5,600 Yen
+ ISP fee (less than 2,000 Yen)
Approx. $63
NTT west
5,300 Yen
Approx. $61
Usen
5,700 Yen
Approx. $48
TEPCO
7,400 Yen
Approx. $62
Chubu
Electric Power
5,800 Yen
Approx. $49
K-Opticom
6,000 Yen
Approx. $50
Energia
6,500 Yen
Approx. $54
QT-Net
5,500 Yen
Approx. $46
Aug OF Networks Co., Ltd. Private research results

15. Cost of Services: Japan: United States:
Average consumer pays $46-$63 per month for FTTH service (anywhere from 10 Mb/sec to 100 Mb/sec).
United States:
T-1 line (1.54 Mb) in Public Power coverage areas is $800? . . $1500? . . .
T-1 lines and Japan’s FTTH are not a direct technology comparison. However,
Clearly, Japanese consumer has more and better options.
How many of our schools, small businesses, and local government facilities could use a $50 FTTH connection?

16. Lessons Learned:
FTTH can be a low cost-of-entry / low risk proposition.
Competition in telecommunications is good.
More competition is better.
Power utilities can play a key role in creating facilities-based competition.
Public Power is willing to compete, and can take a lead role in building a new national telecommunications infrastructure.

17. Questions. Guy Swindell AFL Telecommunications (864) 486-7236 guyton
Questions? Guy Swindell AFL Telecommunications (864)