With Fibre Internet, the future is here, but not for most Canadians

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An Angus Reid study released this past summer found that nearly one half of online Canadians surveyed said they would give up television service before they give up Internet or phone service. The survey shows, that for many Canadians, a connection to the Internet is no longer a luxury, it's a necessity.

The exponential growth in the use of the Internet over the last decade and a half has meant that Canadians now require more robust internet connections. In the early days of dial-up, it wasn't uncommon to wait several minutes before logging on and then even longer for web pages to download or email messages to appear on our screen.

As websites became more complex and emails began to contain attachments, Canadians frustrated with dial-up opted to pay more for "always on" DSL or Cable Internet connections. Today, Digital Home owners will often spend a $100 or more per month for some of the fastest plans that telephone or cable companies have to offer.

While the new plans are a quantum leap over what was available just a few years ago, many leading edge Digital Home owners are still finding their connection congested. The primary reason for the slowdowns is the growth in the number of devices connecting to the network and the growth in video on demand (VOD) traffic. According to projections by network infrastructure giant Cisco Systems, VOD traffic is expected to quadruple between 2010 and 2015 while the number of devices connected to the Internet is expected to double.

In Canada, the big Internet service providers to have responded to this explosive growth by blocking or restricting service on their networks in order to provide an acceptable level of service to all of its customers. For example, Rogers Cable restricts upload speeds on its $60 a month "Extreme" internet package to just 1 Mbps upload speed and a bandwidth cap of 100GB per month. In addition, online gaming and peer-to-peer file sharing are capped at a dial-up modem era speed of 80 kbps.

In hearings with the CRTC, Rogers and other ISPs say their networks are simply not capable of providing a high level of service to all customers without implementing these types of rationing measures.

The good news is there is a technology that is now being implemented in many parts of the United States and a few parts of Canada which promises faster downloads, faster uploads, less congestion and higher bandwidth capacities.

The technology is called Fibre to the Home or FTTH. As the name implies, FTTH uses fibre optic cable instead of copper telephone or cable wires to deliver high speed service to the home. By using light instead of electricity to carry a IP packets, current fiber optic technology can provide two-way transmission speeds of up to 100 megabits per second.

While unknown in much of Canada, FTTH is well established in the industrialized countries of South East Asia. For example, FTTH penetration is now over 50% in South Korea over 30% in Japan and Hong Kong.

The numbers in North America are considerably lower but are growing quite rapidly south of the border. According to Market Research firm RVA LLC, almost one in five homes in the United States (18 per cent) had FTTH capabilities at the end of April 2011. RVA says there are now more than 770 providers of FTTH in North America with Regional Bell Operating Companies in the United States (primarily Verizon) representing almost 73 per cent of all North American FTTH connections.

Thanks to faster speeds and less congestion, FTTH providers considerably higher levels of customer satisfaction. In a survey of several thousand broadband subscribers in the U.S., RVA found that 74 per cent of FTTH users were "very satisfied" with their service compared to 54 per cent for cable users and 51 per cent for DSL.

In Canada, the implementation of the next big thing in internet connectivity has been quite limited. The percentage of homes with access to Fibre optic connections is likely less than 2% and is restricted to areas of Manitoba and Atlantic Canada.

The largest FTTH provider in Canada is Bell Aliant which operates in Atlantic Canada. Branded as FibreOP, Aliant expects to have FTTH service available to over 600,000 homes and businesses by the end of 2012. Aliant says that when the roll-out is complete customers will be able to sign up for premium Internet service with download speeds of up to 170 Mbps and upload speeds of 30 Mbps.

Another early adopter of fibre to the home is Manitoba's MTS, which last year, announced plans to spend $125-million over the next five years as part of an accelerated deployment of its FTTH network which it calls FiON. By the end of 2015, MTS expects to deploy fibre to about 120,000 homes in close to 20 Manitoba communities.

Unfortunately for consumers in Canada's most populous provinces (Ontario, Quebec, British Columbia and Alberta), the roll-out of FTTH has been virtually non-existent. In Alberta and British Columbia, Shaw and Telus have announced several FTTH trials over the last four years but have yet to make any major announcements. In Ontario and Quebec, Bell has said it plans to have Fiber to the building (FTTB) in 1,600 condominium and apartment buildings in Ontario and Québec by the end of 2012 but no significant FTTH initiatives have been announced.

The primary reason for not building FTTH networks in Canada's big provinces is cost. FTTH installation costs per subscriber are typically in the $1,000 to $1,500 range. With over 8 million households in Ontario and Quebec, a complete FTTH roll-out could cost $8 to $12-billion.

Finally, a question I often receive from Digital Home readers concerns the Bell Fibe Internet service. In Ontario, Bell now sells internet packages called Fibe 6, 12, 16 and 25. Despite the similarity to the word Fibre, the Fibe service is not a fibre optic service and still relies on copper cable to the home.