Economic feasibility of fiber-­to-­the-­home networks

Fiber-to-the-home (FTTH) is a communications technology that provides a multitude of applications and services over a single fiber optic network. These include basic services such as telephone, internet and television, and more advanced applications like tele-medicine, tele-working, smart grid power monitoring technology, remote home utility control and e-learning. Canada, in general, and PEI in particular, lags the world in FTTH access per capita as measured by the number of households within the population that have subscribed to a FTTH service. In December 2008, twenty counties were listed as having reached 1% access of FTTH; Canada was not on that list. Recently in the US, a growing number of municipal governments have invested significant capital, and have been building FTTH networks themselves, similar to another era when they had built roads, sewers and electrical systems (St. John, 2008). This research study examined the economic feasibility of municipal investment in FTTH networks by comparing the experience of three US cities with their respective state-wide economic data. This applied research examined the economic benefits for the municipality using three measures. The measures were ␣ (1) per capita income, (2) unemployment rates and (3) housing prices. While the evidence suggested an increase in per capita income was associated with the implementation FTTH. The finding did not suggest there was any association between a fiber network and reduced unemployment rates or increased housing values. This research also provided an estimated cost range to build a municipal FTTH network in 2010. This data could be used to calculate a Return on Investment (ROI) model. The ROI models may be used to evaluate the economic feasibility of municipal capital investment in potential FTTH projects