Too much time on my hands....
I started writing this a couple of days ago, got several hundred words written, and poof... it disappeared. Probably IHUB's way of saying don't be too wordy. Anyway, based on some posts I have seen recently, and on RB, there seems to be some confusion about what exactly the "last mile" problem is, and how NVEI porportedly intends to solve it.
First off, one of the problems with understanding the "last mile" problems stems from the fact that there are actually at least two "last mile" problems (actually, there are more, but I have already been punished for being too wordy):
1) Residential "last mile" problem: This problem results from the fact that even though most telcos now offer some type of broadband service, the range of that service is limited to about 5000 feet for typical DSL. Fast, big internet is delivered to the telco's Centrla Office (CO) in a great big fiber data pipe. The COs are generally brimming with capacity, but have no good way to deliver that capacity to customers that are more than a few thousand feet away from the CO.
One solution is DSL. However, it is limited by its range, and as I stated above, it loses its effectiveness dramatically over distances greater than 5000 feet. The last report I saw said (IIRC) that only 25% of customers are within 5000 feet, but 95% are within 18,000 feet. So, currently, DSL can only reach at best 25% of the residences. Even then, DSL has speed limitations, and will likely be unable in most cases to deliver the VoD and other high-bandwith services.
Another possible solution is VDSL. A common misconception is that VDSL is better than DSL since is transmits faster. This is true, but only over short distances. The typical way that VDSL will be implemented is in conjuction with Fiber-to-the-neighborhood (FTTH) or Fiber-to-the-curb (FTTC). As the names imply, these schemes require that optical fiber be run close to the end user, and then VDSL would bridge the last few hundred feet. A better solution than DSL from a bandwidth perspective, but very expensive to trench all that fiber. There is a real need for something that can give VDSL-like performance over DSL-like distances. There is even bigger need for something that can give VDSL-like performance at distances more than 3 times DSL-like distances. So this is the residential "last mile" problem.
2) Business "last mile" problem: This problem is similar to the residential one, but different. As businesses grow and technology develops, the need for broadband increases. Small to medium sized businesses often use what is called T1 for broadband. T1 does not describe a technology, instead, it describes a speed and a format - 1.544Mbps over 24 channels. How that data is delivered depends on what types of services are available. T1 originally began as 24 separate ISDN lines at 64Kbps each all bundled together - hence 24 channels. In fact, many T1 lines are still done this way. Now, thoug, T1 is probably most commonly delivered with multiple DSL lines with a very small percentage done over fiber. Most small companies can get T1 lines provided there are enough free telephone lines. The problem comes when a company outgrows its T1.
Long ago, 1.544Mbps was considered fast, and a T1 was considered a lot of bandwidth. Now, with email, large attachments, videoconferencing, etc. the bandwidth demands are ever-increasing, and T1 is just not adequate. The "last mile" problem emerges when a business wants to upgrade from a T1. The next step is T3, which is 44.746Mbps. Unfortunately, you cannot deliver T3 over copper lines - it would just take too many. The only way, now, is to use fiber.
Unfortunately, the huge fiber build-out we experienced over the last 10 years never completed the last step. Most businesses are within a few thousand feet of a big fat fiber data pipe, but have no cost-effective way to reach it. There is currently a huge demand for greater-than-T1 services, and telcos are reluctant to provide it because it means that they must run fiber to the building. Where it might be worthwhile to run a huge fiber bundle to the Microsoft complex, it is simply too expensive to run it to Spokeshave Consulting Services. That is the crux of the business "last mile" problem.
What NVEI promises is a way for the telcos to tap that big fat data pipe for the small to medium sized businesses and provide greater than T1 service all without laying new fiber and using only the existing copper plant. This is a huge market. There are billions to be made.
Though it would seem a more glamorous goal to provide broadband to every home, that is not where the money is. Business data needs are increasing dramatically, and there is no end in sight. NVEI is correct to go after that market first.
So, if anyone asks me why I still am invested in NVEI, even after all of the broken promises and disappointments, my answer will be because there is a billion dollar untapped market out there that a guy like Tom Cooper says we can tap.
AI
