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A Rogers work crew installs a section of fibre-optic cable in Toronto.Kevin Van Paassen/The Globe and Mail

Jeff Misner understands the challenges of working with sod.

As strategic initiatives project manager at Rogers Communications Inc., he serves as the connection between the virtual world and the real world. He knows the effort, and expense, needed to keep up with pressure for ever-more capacity and higher Internet speeds – and that extends to leaving customers' lawns just as he found them.

Internet traffic in Canada is expected to more than triple between 2014 and 2019, according to data from Cisco. In a race to meet that demand and hold on to broadband customers, the country's big telecom players are pouring billions of dollars into their networks, investing in software and equipment upgrades and incorporating more fibre optic cables into their systems. That's where Mr. Misner comes in.

On a hazy morning in early June he is supervising a construction crew outside an apartment complex in Toronto's east end. His team is prepping a machine to drill down about a metre before boring 60 metres across the building's front lawn, leaving only a small patch of torn-up grass as evidence they were there.

Later, the crew will pull two sturdy plastic pipes through the hole, leaving one empty for the future, and running a thick fibre cable in black plastic casing through the other tube and up to the apartment building. From there, individual units will continue to receive service from the company's original coaxial cable that once delivered only television signals before branching into Internet and home telephone service.

"We're seeing growth on our IP network of about 60 per cent year-over-year and we expect that to continue to grow," says Rob Goodman, senior director of product management for Internet at Rogers. "Over the next four years, our estimation is it's about a 400 per cent increase in usage. It's a dramatic amount of data that our customers are demanding and using."

Several broad trends have expanded Internet traffic over the past 20 years, says Don Bowman, chief technology officer at Waterloo, Ont.-based Internet-service tracking firm Sandvine Inc., outlining the shifts from when customers first signed up for AOL accounts after receiving a CD-ROM in the mail to now, when many homes have multiple WiFi-connected laptops, TVs, smartphones and even fridges.

"Initially growth was driven by people switching from dial-up to broadband. The second thing that drove growth was new users joining the network," he says, adding that in the early 2000s, new users joining the network increased by about 25 per cent every quarter.

"Starting about three years ago or so, the number of people joining the network slowed down to effectively population growth – about one per cent – because everybody has broadband if they wanted it," Mr. Bowman continues. "Then, the growth switched to new applications on the network as people started streaming video. Now, everybody's doing streaming ... What's actually growing now is the number of devices inside your house."

Rogers, for example, sees an average of seven connected devices behind each of its cable modems, says Mr. Goodman, adding that 30 per cent of the company's customers have more than 10 connected devices.

To keep pace with demands for more speed and capacity, all Internet providers make numerous business decisions such as interconnecting directly with other Internet companies and using third-party "transit" providers to send traffic long distances over fibre networks that stretch across countries and oceans.

But at the neighbourhood level – the "last mile" between customers' homes and local facilities, known as a cable "headend" or "central office" in the case of telephone companies – cable and telephone companies are grappling with different technology constraints and opportunities.

Fibre – which transmits data over ultra-thin strands of glass using pulses of light – has much greater bandwidth capacity than the copper wires traditionally used in telephone and cable networks, which rely on electrical currents to send information. It is also fast, less prone to electromagnetic interference and can send signals over greater distances without the need for additional power amplification.

Both types of operators commonly install fibre directly in new housing and condo developments and have invested in wiring more of their networks with fibre and pushing it closer to existing homes. But telcos face a more pressing demand to bring fibre directly to their users' living rooms sooner.

That's because by using newer generations of DOCSIS (data over cable service interface specification) technology, cable operators have been able to deliver increasingly fast broadband Internet speeds surpassing 200 megabits per second (Mbps) over their existing copper wires. Meanwhile, telephone companies can deliver respectable but not eye-popping speeds – in the range of 25 Mbps to 50 Mbps – in areas where they have deployed fibre to the neighbourhood but not right to the home.

To date, telcos have remained competitive by bundling their broadband service with popular Internet protocol television (IPTV) offerings, says Barclays Capital analyst Phillip Huang. But he predicts that advancements in cable firms' own TV platforms will only increase the pressure on telephone operators to deploy fibre-to-the-home.

Within the past two weeks, Telus Corp. and BCE Inc. have both highlighted plans to direct $1-billion of their capital expenditures budgets toward fibre-optic builds in the cities of Edmonton and Toronto, respectively. Telus aims to offer speeds of 1,000 Mbps within six years, while BCE says it will offer such "gigabit" service to 50,000 Torontonians later this summer and eventually deploy it to 1.1 million homes and businesses. (BCE owns 15 per cent of The Globe and Mail.)

BCE says the Toronto project will see it upgrade 27 central office facilities and install more than 9,000 kilometres of new fibre. The company has also reached long-term agreements with Toronto Hydro to access utility poles and will deploy 70 per cent of the network aerially, which saves time and expense compared to underground upgrades.

In a research note on Monday, Mr. Huang highlighted the Internet-focused race between the cable and telephone operators: "In anticipation of the cable [companies'] improvement to their TV platforms, the telcos appear to have been quietly accelerating fibre investments, with recent announcements/commentary suggesting that they now aim to make broadband their competitive edge over cables in the next several years."

What's the word?

A node split

To add more capacity at the customer access level, cable operators like Rogers can do what is called a 'node split.'

A node – which is the size of a duffel bag and can be found on hydro poles or buried underground – converts the optical signals sent along fibre into radio-frequency (RF) signals used in the coaxial cable that runs directly to customers' homes.

One split cuts the number of customers served by the node by half, thereby doubling the capacity available.

By the numbers

30%: Share of Rogers' Internet customers who have more than 10 connected devices.

$1-billion: Respective value of recently announced fibre-optic builds by Telus Corp. in Edmonton and BCE Inc. in Toronto.

400%: Expected increase in Rogers' IP network usage over the next four years.

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