Bridging The Digital Divide Profitably: Doing More With Less

High speed broadband access is a fundamental need for remote learning, remote work, multiple users, video streaming, video conferencing, and smart buildings. High speed broadband with much higher upstream bandwidth, sustained peak performance and high reliability are needed to prevent poor user experience.

There is a direct correlation between bandwidth speed and the GDP of communities. The U.S. ranks 11th in internet speed and many are left behind. Inadequate bandwidth is a problem not only for rural single-family units (SFU) but also in villages and in highly populated metropolitan areas.

25% of the U.S. population lives in multi-unit residential buildings. 88% of existing residential buildings do not have in-building fiber wiring and their residents are underserved. Although carriers can bring “greenfield” fiber or fixed wireless Gigabit services to older “brownfield” residential buildings (Multi Dwelling Units – MDU), they cannot cost effectively and easily distribute that bandwidth to the occupants due to the complexity of extending fiber directly to each door. Therefore, these buildings are often bypassed by carriers, resulting in a digital divide.

Extending the fixed fiber network to deliver very high-speed bandwidth to occupants or businesses (Multi Tenant Units – MTU) in older buildings requires manpower, disruptive construction, high CAPEX and a long timeline to revenues. The rewiring costs in MDUs to bring fiber to each door is typically $600 -$800. The entire building is rewired with fiber at one time, as it does not make sense to partially rewire a building and then come back to do more rewiring. If a carrier gets a 50% initial take for high-speed broadband in the building, they would be doing well. The cost per home activated is then doubled to $1,200 – $1,600.

That means 50% of the CAPEX would be a dormant investment.

What if a carrier can use the existing telephone pairs or coaxial cable in the building to deliver the bandwidth without rewiring or construction costs? What if the solution were scalable and can be delivered as needed in a “pay as you grow” timing? What if even a 10-15% take rate would be profitable? Imagine eliminating high CAPEX and having an ROI of 4-5 months? What if the time to revenue from the connection of the building or home cluster junction point to a fiber or fixed wireless feed to the building only takes hours?

This technology exists. It is called Gigabit Home Network or “G.hn.” It is an ITU standard and is used in broadband extenders to boost/extend internet service over the power lines to rooms a short distance away from the Wi-Fi router in homes. It is much more noise immune resilient than DSL. The limitation of those extenders is that you cannot use them to deliver bandwidth very far or to more than one residential unit.

G.hn technology has been adapted to work to operate on telephone pairs and on coaxial cable to deliver very high-speed broadband for extended distances. Special software (Vector Boost) has been developed and enhanced to have high noise cancellation capabilities that enable the transmission of Gigabit services (1 Gbps) on one telephone pair (SISO) to 500 feet or on two telephone pairs (MIMO) to 800 feet. Each G.hn port can act as a SISO or MIMO port. The performance is measured with all pairs active in a 25 or 50 pair telephone cable binder. The bandwidth delivered is virtually symmetrical – 1 Gbps downstream and 1 Gbps upstream as measured on a traditional speed test. When used on coaxial cable, the 1 Gbps virtually symmetrical bandwidth can be delivered to 2,600 feet. It will also work with up to 16 splitters per port, enabling its use over existing coax installations.

Traditional cable companies have used DOCSIS. Cablecos have had a competitive advantage over telephone companies because they could deliver more bandwidth on coax. This has changed as telephone companies started extending fiber. DOCSIS 3.1 cannot match the bandwidth provide by fiber. It is limited to about 200 Mbps downstream and 50 Mbps upstream. DOCSIS 4.0 will not be available for 3-4 years and would require a complete and expensive system change out.

G.hn technology is available in 24, 12, 8 and 4 port units that can be daisy chained together making the solution scalable. These units are called (G.hn) Gigabit Access Multiplexers (GAM).

This solution is ideal for MDUs and MTUs as it can be installed in hours and can immediately deliver revenues. The cost is 25% of the cost of extending fiber so a carrier can quickly grow its high-speed bandwidth subscribers and be cash flow positive in the first year.

This technology is just as applicable for home clusters with outdoor GAM units in IP-68 enclosures that can be powered by reverse power feeds from each residence, so each residence provides its share of the power. This eliminates the need to bring local power to the unit. The GAM can be placed near a telephone pedestal and a fiber feed and uses the existing telephone pairs to bring Gigabit services directly to each residential gateway. There is no need for trenching, disturbing landscaping or drilling into the structure. The existing telephone wires are already connected to the residential gateway.

The technology product implementation is fully compatible with all Ethernet residential gateways, OLTs and operator IT systems (looks like PON). It has extensive management and troubleshooting carrier features including low latency, quality of service (QoS), bandwidth management, business class SLAs, VLAN support, non-blocking, and dynamic bandwidth allocation.

The G.hn GAM is very reliable and robust and is proven in service at 75 carriers including tier-1 carriers in residential, business, hospitality and wireless applications delivering Gigabit services over telephone pairs or coax. The GAM cost effectively dramatically speeds up access to very high bandwidth to subscribers and is increasingly deployed by communities to provide affordable high-speed bandwidth to subsidized housing.

There is a new factor that now must be taken into consideration in the decision process of carriers. The impending Biden executive order would no longer allow wiring in buildings (fiber, coax, copper) to be exclusively owned or exclusively used by any operator. This would mean that operators would no longer be able to sign exclusive agreements. Operators investing in fiber or other in-building wiring would no longer have exclusive rights to that wiring. This removes the incentive for carriers considering investing in the in-building wiring infrastructure. Why invest in the wiring when a competitor has the same right to use the wiring you installed as you do?

This has recently accelerated the move from installing fiber the last hundreds of feet in Brownfield buildings to extending fiber high bandwidth services using G.hn over the existing wiring. Carriers can own the GAM and use the existing wiring. The GAM can also be used by multiple operators in an open-access mode with full privacy/ compartmentalization between operators/subscribers if the owner operator of the GAM wishes to lease its use.

We will now look at the choices available to bring very high-speed bandwidth to older buildings and to home cluster. First, it is necessary to bring fiber to the building or to a junction point near the building or the home clusters. Alternatively, fixed wireless can be brought to the building or to a point near the building or home clusters. The problem then is to distribute this bandwidth to subscribers. It is time consuming and labor intensive to rewire with fiber. 5G wireless does not penetrate buildings and setting up clusters of antennas is complex and messy. The easiest, fastest, and least expensive way is to use the existing wiring. What technologies exist that can deliver high bandwidth on copper?

G.hn is the most cost effective, flexible, and robust solution. It allows the operator to deliver and manage the bandwidth over the last 800 feet on telephone pairs or 2,600 feet of coax to each subscriber and adds a multiplier to the IRR achieved. Most important of all, it enables the carrier to deliver very high-speed bandwidth to four times as many subscribers for the same spend, while doing a public service to help bridge the digital divide.

Power utilities have become much more active in becoming carriers to meet the bandwidth needs of their customers. In the carrier world, each copper line customer adds $1,000 to the carrier’s valuation. This valuation is dropping due to churn of dissatisfied customers. A fiber line customer is worth $4,000 and this value is steadily rising. These values are based on providing 500 Mbps symmetrical service over time. That is one of the reasons for the rush to fiber – to increase their valuation more than the cost of the investment.

It is not the fiber or copper that creates the valuation difference. It is the bandwidth that can be delivered. Since G.hn delivers virtually symmetrical Gigabit services, the ARPU earned by using G.hn is the same as the ARPU earned by using fiber for the foreseeable future. This valuation increase is achieved faster and for a much lower CAPEX using G.hn. The IRR is more than doubled and since the ROI is only 5 months, it is a very good investment.

The bottom line is that, for a given CAPEX spend, on G.hn you can provide very high-speed bandwidth to many more customers and more significantly increase your corporate valuation than by extending the last hundreds of feet of fiber in buildings or to home clusters.