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EYE ON FIBER
Demolishing
Mythology
Were fiber optic LANs too costly 1990s? Perhaps. Was copper cheaper for horizontal applications a few years ago? Yes – but in just 25% of potential applications. What about now? Based on a thoroughly researched cost model, our expert contends, the fiber cost disadvantage no longer exists.
By Eric Pearson
For many years, there has been a perception that fiber optic communication is too expensive for users – that while the performance greatly exceeded that of copper cabling, that could not justify the higher expense.
Let us examine that concept.
Fiber optics has found many applications, including power utilities, military bases, military field tactical, aircraft, sensors, HVAC control, manufacturing, security, and the major three in communications. Those three are telephony, cable television (CATV), and data communications.
As early as 1978, telephone companies were able to justify fiber optics as a technology with a cost lower than that of other transmission technologies. This favorable cost comparison led the telephone industry to drive the fiber optic industry growth.
Along the way, a memorable signpost came in 1988, when AT&T wrote down corporate assets for the early retirement of its microwave plant. An extension fiber optic network replaced the plant. Perhaps that is not a major mile marker for you, but my memory of the event is crystal clear . . . my AT&T stock absorbed a major hit!
FTTD: Not about flowers!
From approximately 1990 to 1997, CATV companies invested heavily in fiber optic transmission systems. Why? Fiber reduced operational and equipment costs. In addition, these companies have found that fiber optics improved system reliability – and the signal quality at your TV set.
Obviously, this perception of high cost has not been true for telephone or CATV companies.
In data communications, fiber has been used in three types of networks:
campus-wide backbones (i.e., building-to-building);
vertical riser backbones within buildings; and
fiber-to-the-desk (FTTD) networks – or fiber LANs.
Now here is the tale of these three applications: Fiber has dominated campus backbones for most of the past two decades. For the past decade, fiber has been the dominant choice for vertical riser backbones.
Such domination indicates that fiber advantages outweigh the perception of higher costs, just as in the telephone and CATV worlds.
However, FTTD has
represented fewer than 5 % of new premise wiring or LAN installations over the
past 10 years. Why has FTTD been rejected by the market? The major reason cited
has been (and is) that fiber electronics were more expensive than UTP
electronics. Making a decision on this basis might not seem entirely rational
– like picking one house over another because the first was already
painted the color you liked!
Network cost is the
realistic criterion that needs to be used – by LAN end-users and their
contractors and consultants – to determine whether FTTD is
cost-effective.
Initial cost model
While examining total network cost, Pearson Technologies developed a comparative cost model in an effort to identify the factors that would favor FTTD. This cost model compared the cost of traditional networks (with horizontal unshielded twist-pair copper cables and vertical fiber) to the cost of FTTD networks.
In 1998, Pearson Technologies and the Fiber Optic LAN Section of the TIA (FOLS – see www.fols.org) began working together to explore this cost model. This joint venture resulted in a generic cost model that identified the cost elements that would, or would not, favor FTTD on the basis of initial installed cost. Released to the public in 2001 on the FOLS Web site (www.fols.org), the model identified where FTTD would be favored.
Where? The key variable is the cost of the telecommunication room (sometimes called a telecommunications closet) on each floor of a commercial building. Should the cost of this room run high, FTTD networks would present a cost advantage over the traditional copper-in-the-horizontal, fiber-in-the-vertical-only approach.
According to our carefully researched and tested model, FTTD would be favored when the telecommunication room cost ranged from $20,000 to $40,000. Of the nine scenarios in this model, five showed FTTD to be the same cost or less, one showed FTTD to be slightly more expensive (just $2 per node), and three showed FTTD to be significantly more expensive.
However, with the advance of technology, the model cost factors have changed in just the past two years.
Updating the numbers
To respond to these significant changes, Pearson Technologies and the FOLS updated the model. New cost factors were incorporated and 12 new scenarios were created. The result astounded even us: All 12 scenarios indicated that the initial installed cost of an FTTD network was less than the cost of a traditional network design.
One might be impressed
by this result because of the built-in bias – which is slightly against
fiber. See Table One for the updated model results.
Most surprising was
the FTTZ (fiber-to-the-zone) scenario. In FTTZ, fiber connects a low-level
switch (see Figure One) to a central equipment location. In this configuration,
the cost of the fiber electronics is distributed over eight or perhaps 16
nodes. With this configuration, the apparent disadvantage of fiber cost is
reduced by a factor of eight (or 16).
With this reduction, the cost of a FTTZ network is an impressive 65.4 % of the cost of a traditional copper/horizontal-plus-fiber/vertical network. Bottom line: The FTTD network saves $443.09 per node.
Numbers & myths
Misperceptions and old wives tales die slowly, it is said. Hopefully, the myth that fiber is too expensive will violate that rule. As those in the user community take a look at the updated cost model numbers, we should soon hear a deafening crash – as the perception that fiber is too expensive is resoundingly shattered.
Pearson is president of Pearson Technologies, Inc. (www.ptnowire.com),
which provides training, consulting on marketing and technical issues, and
more. He has worked with the Fiber Optic LAN Section (TIA) and is an editorial
advisor to Fiberoptic Product News. Pearson
is a Certified Fiber Specialist, director of certification for the Fiber Optic
Association, and a 25-year fiber optics industry veteran. For Mr. Pearson contact information, click here.
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