In 1989 Kevin Costner starred in a movie about an Iowa farmer and dyed-in-the-wool baseball fan with an inner voice that tells him, “If you build it they will come.” The “it” in this case is a regulation baseball field; “they” are the baseball legends of a previous generation. To the bemusement of his neighbors, Costner builds a baseball field in the middle of his corn field. Lo and behold, “they” come and play the best game ever. Hence the movie’s title “Field of Dreams.”

A similar act of faith is being made by telecoms and cable operators that are embarking on building their own fields of dreams – next-generation networks that bring 100 Mbit/sec of bandwidth into the home, even though it is still unclear which services are going to work, whether any “killer applications” exist or how long it will take to get a return on a multibillion dollar investment.

The attitude seems to be, “If you build it, the applications – and the profits – will come.” History suggests that this is not such a crazy approach. After all, around 100 years ago the builders of national electricity grids envisaged providing homes with lighting and heating. They did not suspect that their networks would power computers, dishwashers and PlayStations.

Similarly, the engineers that laid hundreds of thousands of miles of copper wire in the 1950s and 1960s to enable basic voice telephony could not have imagined that these same twisted pairs would in the next century be used to send electronic mail, films and music around the world.

While ADSL has been good enough so far, there is a limit to what those old wires can do. Hence, in anticipation of the new services that will come once the network is built, we see operators around the world striving to take optical fiber closer to the home or all the way into it. While the best that can be offered by ADSL is up to 25 Mbit/sec – only those living close to the exchange can get the full speed – a fiber-to-the-home (FTTH) network can offer 100 Mbit/sec to all homes on the network.

The multibillion-dollar investment in next-generation networks might be boldly going where no telco has gone before, but though the final destination is uncertain, it is not all unknown territory.

Bandwidth-hungry video services, most notably HDTV, top most operators’ lists, while other products will exploit the symmetrical infrastructure that gives users upstream speeds to match the downstream.

This is a radical change from current ADSL networks where upstream is usually ten times slower than downstream. This symmetry facilitates multiplayer online gaming and virtual reality simulations, both of which could be offered in HD format. It also opens the door to ultra-fast peer-to-peer file sharing, which in turn is sure to open a Pandora’s Box of next-generation piracy. This means that next-generation digital rights management (DRM) technologies will be required to fight it.

Roland Montagne, Head of Broadband Practice at IDATE, a consultancy based in Montpelier, France, looks to countries where deployment is more advanced. In “FTTx Economics: Keys to a Profitable Venture” published in September, he suggests that while in Japan, extra bandwidth has been the main selling point, in the US it has been HDTV. Overall, he says, there is no clear killer application that will work across different markets.

Meanwhile “The NGN Debate: Light-Speed Networks at a Cost,” a report on next-generation networks published by Fitch Ratings agency in the US in August endorses that view, saying: “What is less clear is what new services will be available or the cash-generating ability of this investment.”

Building these new networks is no easy or trivial matter: IDATE estimates that in France alone the cost of building fiber-to-the-home in the 10 biggest cities (40 per cent of the population) could reach €11 billion ($16 billion). In the US, leading telco giant Verizon is planning to spend €8 million ($11.5 million) to reach 20 million homes with FTTH, while Japan’s NTT is committing €37 billion ($54 billion) to reach 47 million homes, according to consultancy CapGemini. These figures are taken from a report entitled, “Prospects for Next Generation Broadband Deployment in the UK,” published by the Broadband Stakeholder Group in the UK.

Variations based on fiber

There are several variants of technology based on optical fiber and a confusing array of acronyms and jargon. “FTTx” has emerged as an ugly generic means to describe various formats, including: fiber-to-the-home (FTTH), fiber-to-the-building (FTTB), fiber-to-the-street cabinet (FTTC), fiber-to-the-node (FTTN) and fiber to the last amplifier (FTLA).

Over these infrastructures operators can use different technologies – such as VDSL (Very High Speed DSL) and PON (Passive Optical Network, a point-to-multipoint, fiber-to-the-premises architecture) – with varying degrees of bandwidth to deliver their services.

So far, France Telecom is the only European telco that is committed to deploying FTTH – and that is largely because it faces intense competition from cable and independent DSL operators that are doing the same. Others have committed to FTTC or other FTTx variants.

But UK incumbent BT, while implementing a £10 billion ($21 billion) “21st Century Network” upgrade of the core network to IP technology, does not yet plan to upgrade the access network, the local loop that connects the core network to the home. It has so far committed to build fiber deeper into the network only in new 'greenfield' housing developments. For the time being, BT believes that the 50 Mbit/sec that can be offered by running VDSL over the existing copper network will be sufficient bandwidth for the services likely to be required.

As this suggests, the UK is not in the fiber vanguard. According to UK telecommunications regulator Ofcom that may not be too much of a problem and “first mover advantage” may be of limited value. “Future Broadband: Policy Approach to Next Generation Access,” an Ofcom document released in September suggests that, “It may be that the efficient deployment of next-generation access is simply earlier in some other countries than in the UK. We do not yet see evidence that the UK will be significantly disadvantaged economically or socially as a result.”

It is the UK’s very success with current generation networks – broadband is available to 99.6 percent of homes, more than in any other G8 nation – that is one reason why there is less urgency to upgrade than in some other countries. Another factor is television.

The UK has a mature pay-television market (via satellite, cable, digital-terrestrial and ADSL), but in countries such as Germany and the Netherlands pay-television has not taken off to the same extent and next-generation broadband offers a way to leap directly to HD-based IPTV services.

In some countries, France for instance, the need for an FTTx solution is greater because the copper local loop involves distances between exchanges and homes that are too large to be suitable for technologies such as VDSL.

Old architecture

We may be talking about ultra-modern networks, but some of them are going to be built along some very old-fashioned architecture.

In France, independent telcos Free and Neuf Cegetel are using public sewers to lay their new fiber cables, an approach which IDATE estimates could reduce capital expenditure by nearly a third.

Ofcom also envisages that part of the next-generation, 21st century network will be built using the sewer system that is one of the great legacies of the Victorian era.

Ironically, with the amount of pay-TV content which is “adult” in nature, the Victorians might well have considered the sewer to be the most appropriate place to distribute it.