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Two Percent of U.S. Homes Connect to Fiber

The number of U.S. households with direct connections into high-speed fiber optic networks has surpassed the two million mark, according to a study released by the Fiber-to-the-Home (FTTH) Council and the Telecommunications Industry Association (TIA).

The survey also shows that the rate of growth in fiber to the home connections continues to increase as more Americans look to next-generation networks for faster internet and more robust video services.

According to the study, 2.14 million homes -- or approximately 2 percent of the households in the country -- are now connected to the internet via an end-to-end fiber optic service.

This compares to 1.01 million connections as of September 2006 (less than one percent market penetration), meaning that the annual growth rate has increased to 112 percent from the 99 percent that was measured last March.

The study also shows fiber to the home networks now passing 9.55 million U.S. homes, up from 6.1 million a year ago. Moreover, the number of households that receive video services over their FTTH connections has increased sharply over the past six months, to 1.05 million, for an annual growth rate of about 160 percent.

Further, the "take-rate" or adoption for fiber to the home services -- that is, the percentage of households that are offered the service and which actually subscribe -- is finally on the rise.

While overall FTTH take rates had been suppressed while Verizon was building its FTTH infrastructure faster than it was adding customers, the company is connecting customers more quickly now.

Accordingly, FTTH industry's overall adoption rose from 22.3 percent to 26.8 percent in the most recent six-month period. However, the adoption among non-Verizon FTTH providers is nearly 52 percent.

While Verizon continues to lead the FTTH market with about two-thirds of total installations, the report noted that 369 other broadband service providers are keeping pace and maintaining about a third of the overall market.

Michael Render of RVA Market Research, author of the study, predicted further acceleration of FTTH growth within a couple of years from now. "While annual growth in the number of connections has doubled for the past two years, we expect to see a further increase in the growth rate as more as more high-bandwidth applications come to market and as more major service providers begin offering fiber to the home," he said.

"Next generation broadband deployment is the key to our nation's technological success in the new century," said TIA President Grant Seiffert. "The more choice consumers have -- whether in providers, hardware, or content -- the better off the American market will be."

Both organizations continue to urge legislators and regulators to adopt a "100 Megabit Nation" policy and actively reduce barriers to next-generation broadband deployment. Clearly, at the current rate of deployment and adoption, the U.S. is unlikely to catch up anytime soon to the global market leaders within the Asia-Pacific and European markets.

The U.S. market has now fallen so far behind that a bold new national telecom infrastructure strategy is required to significantly reduce the gap between the global leader's advantage.

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