Fiber-to-the-home (FTTH), also known as fiber-to-the-premise, is the use of optical fiber cables to bring high speed Internet connectivity directly to a particular customer location or residence. Optical fiber is a hair-thin piece of glass that is specially designed to transmit pulses of light. One small fiber can carry multiple signals at once and the signal does not degrade over long distances.
Municipal FTTH offerings typically only include Internet service and do not account for cable television. Customers who subscribe to service through FTTH offerings are “cutting the cord” and streaming entertainment over the Internet.
Customers who “cut the cord” forgo their bundled service (cable, Internet, phone), and subscribe to fiber Internet only. If television service is required, customers would have the opportunity to stream programs over a fiber Internet connection though services like Hulu, Netflix, Sling, etc. Subscribing to these services provide some of the traditional cable TV programming via apps.
In 1998, HG&E constructed a fiber optic network in order to serve its utility needs, as well as to provide high speed internet service to Holyoke's public schools and municipal buildings. As a natural extension of this business model, HG&E began serving commercial customers that were located along the fiber network path. Today, HG&E, through HGE.Net, continues to provide high speed internet services to business customers.
Today, HG&E Telecommunications (HGE.net) provides Internet service to municipal buildings, local schools, and commercial customers. Making a connection from the existing fiber network to a customer location can cost several thousand dollars. Typically, businesses are able to spread the installation costs over several months and sign a three-year service contract in return.
In addition, HGE.net is serving two apartment buildings, the Cubit and Chestnut Street Apartments, as part of a residential FTTH pilot program.
Yes, HGE.net is currently administering two residential pilot programs at the Cubit and Chestnut Street Apartments. During the redevelopment of these two buildings, HGE.net was able to work with the property owners to cost-effectively install fiber in the buildings and offer customers broadband service at competitive rates.
HG&E has been evaluating an incremental and City-wide build-out to serve the residential sector, similar to other area municipal projects. Preliminary estimates indicate that a City-wide network build-out could cost upwards of $30 million. Each community can have significantly different factors that impact construction cost, operating expenses, and demand for a municipal internet service; therefore, HG&E is taking a deliberate and thoughtful approach to the local FTTH evaluation.
Not yet. HG&E is in the process of studying the feasibility of a FTTH project for Holyoke. We are committed to being responsive to our customers and look forward to sharing more about this project with you in the near future.
No, HG&E does not provide residential internet service outside of Holyoke. In some communities outside of Holyoke, HG&E does provide wholesale internet services to certain Internet Service Providers (ISP’s) and those ISP’s then sell internet services to the residents of the community.
HG&E has provided consulting services and project management services to several Western Massachusetts communities that have built, or are currently building, FTTH networks. These engagements have helped HG&E develop additional expertise in the design, construction and operation of FTTH networks, and have provided additional revenue to HG&E.
The current estimate for a full FTTH deployment to all customers is between $20 Million and $30 Million. HG&E is in the process of evaluating an incremental build-out of smaller neighborhoods, or fiberhoods, over time. This is similar to the approach being taken by some other Municipal Light Plants in the region. Under this approach the City is segmented into several fiberhoods, and the fiberhoods are built-out based on customer interest and available funding.
Projects constructed in areas where there is no incumbent provider have been extremely successful. In areas where there is already access to cable and internet (like Holyoke), the outcomes are mixed.
There are several factors that contribute to the overall risk of a project like this, which is the reason HG&E is proceeding carefully. Some of the factors include:
Cost – The cost of a full deployment is between $20 Million and $30 Million. A project of this magnitude bears a significant risk to HG&E’s current service model, credit rating and financial position.
Market—There is a limited market base within Holyoke and HG&E would be competing directly with the incumbent provider, while offering fewer products (Internet only). There are many advantages to fiber, but HG&E is cautiously reviewing the potential take rate and the types of subscribers that would be willing to move to a faster Internet service with no cable components.
Technology –The pace of technological change continues to accelerate and there is always the risk that a disruptive and competing technology could arrive on the marketplace and have a significant negative impact on any FTTH investment.