Sure, Verizon has been able to get their cost per home passed down to $700 (http://www.isuppli.com/Home-and-Consumer-Electronics/MarketWatch/Pages/Veri zons-FTTH-Expansion-Stoppage-Takes-Many-by-Surprise.aspx), but that does not include the drop, ONT, nor any home wiring to get from the ONT to the CPE within the home. That's still another $650 or so (slide 11 of http://www.natoa.org/events/NATOAPresentationCalix.pdf and http://www.nytimes.com/2008/08/19/technology/19fios.html?pagewanted=all&_r=0 ). That's down from $1,021 in 2005 and $850 at the end of 2006 (http://connectedplanetonline.com/home/news/verizon_touts_fios_092706/). While my $DAYJOB's access vendor has a range of outdoor ONTs with different features, they generally cost from $400 to $700 apiece (plus ONT housing, power supply, battery, and power cable). If we assume Verizon, because of their purchasing power, can negotiate a fantastic discount, their average ONT cost probably still exceeds $200 apiece. Google is not concerned with traditional POTS in their offering, so they don't have to worry about backup power requirements (and costs), plus they're doing ActiveE, not GPON, so despite their low volume, Google probably has ONT costs somewhat similar or less than Verizon. Real-world FTTH complete overbuilds among RLECs (rural incumbent LECs) are typically between $2,000 and $5,000 per home served (that includes the ONT and customer turn-up). Slide 13 of http://www.natoa.org/events/NATOAPresentationCalix.pdf shows an average of $2,377 per home passed (100% take rate). You can see on Slide 14 how the lower households per square mile leads to substantially greater costs. Looking again at the Verizon FiOS build, where there may be a complete overbuild but not every copper customer is converted to FiOS, the cost per home passed does not equal cost per home served. Note this BusinessWeek quote regarding FiOS, "He estimates the project will end up having cost Verizon $4,000 per connected home." (http://www.businessweek.com/magazine/content/11_13/b4221046109606.htm) And for Verizon's cost per home passed: "Consider the total project cost of Verizon's FiOS, $23B, and then divide that not by the 17M homes passed (as I did), but with the actual subscribers (5,1M), This would result in a cost per subscriber of $23B/5.1M = $4,500." (http://seekingalpha.com/article/778871-challenges-and-opportunities-for-goo gle-s-fiber-project-a-reality-and-sanity-check). From the same Seeking Alpha article, FiOS' cumulative historical cost per home passed is $1,352. Remember that Google cherry-picked which city it would serve, so it was able to identify location that is likely less challenging and expensive to serve than the average. A lot of Google's Kansas City build will not be buried but hung on power poles, and they're starting their builds in areas of the city where there was a significant level of customer interest. All of that is going to translate into a lower cost per customer served than a service provider who decides to overbuild an entire locale, regardless of customer interest. So while Google may be able to pull off a $1,400 expenditure per home passed, Jay can't use that price point in his own calculation unless he's in similar construction environment and takes Google's selective deployment approach. Frank -----Original Message----- From: Leo Bicknell [mailto:bicknell@ufp.org] Sent: Sunday, February 03, 2013 4:40 PM To: NANOG Subject: Re: Is Google Fiber a model for Municipal Networks? In a message written on Sun, Feb 03, 2013 at 05:03:52PM -0500, Jay Ashworth wrote:
From: "Leo Bicknell" <bicknell@ufp.org> Looks like $500-$700 in capex per residence is the current gold standard. Note that the major factor is the take rate; if there are two providers doing FTTH they are both going to max at about a 50% take rate. By having one provider, a 70-80% take rate can be driven.
I was seeing 700 to drop, and another 650 to hook up; is that 5-700 supposed to include an ONT?
I believe the $500-$700 would include an ONT, if required, but nothing beyond that. "Hook up" would include installing a home gateway, testing, setting up WiFi, installing TV boxes, etc. So in the model I advocate, the muni-network would have $500-$700/home to get fiber into the prem, and the L3-L7 service provider would truck roll a guy and supply the equipment that comprise another $500-$700 to turn up the customer. In Google Fiber's model they are both, so it's probably $1000-$1400 a home inclusive. $1400 @4% for 10 years is $14.17 a month per house passed. -- Leo Bicknell - bicknell@ufp.org - CCIE 3440 PGP keys at http://www.ufp.org/~bicknell/