Success of Fiber to the Home in Japan Spurs Envy Among Telecom Experts

Editor’s Note: This is the one of a series of panelist summary articles that BroadbandCensus.com will be reporting from the Telecommunications Policy Research Conference, September 25-27, at George Mason University School of Law in Arlington, Va.

ARLINGTON, Va., September 26, 2009 - Fiber to the home (FTTH) has been touted by many as the next great leap in broadband connectivity, and was discussed at the Telecommunications Policy Research Conference here on Saturday.

In Japan this service has already become the leading method of broadband connectivity, with speeds reaching 1 Gigabits per second (Gbps), and a seemingly endless potential for application development. Professor Masatsugu Tsuji from the University of Hyogo presented an analysis on how FTTH has become the dominant connection method in the country.

Nippon Telegraph and Telephone Corporation is the dominant corporation in the FTTH market with a market share of nearly 70 percent. The cost of these services is also much lower in Japan versus the United States: in Japan, a 1Gbps connection costs less than $40.

Because some individuals still prefer to keep their older digital subscriber line connections, NTT must maintain two networks, a copper network for DSL and a fiber network. Japan does face a problem in fostering competition, however, with the high costs associated with fiber connections making new market entry quite difficult.

In the U.S., the question of municipally-owned networked, while popular in recent years, has been lower on the policy agenda. Bert Sadowski of Eindhoven University of Technology looked at how a municipal network added competition to the FTTH market in the Netherlands.

Sadowski concluded that the municipal option – or simply the threat of having competition in the market – stimulated consumers to purchase for higher-speed connections.  He compared this to where, in the U.S., Comcast has been rolling out its higher-speed cable modem service, DOCSIS3, primarily in service areas where Verizon Communication’s FiOS is available.

Panelists for this session included:

• Masatsugu Tsuji, Yuji Akematsu: University of Hyogo
• Annemijn van Gorp, Catherine Middleton : Ryerson University
• Bert Sadowski, Marcel de Pender: Eindhoven University of Technology