It’s not sunny every day and money doesn’t sprout from trees in Kutztown, Pa., but for cable and Internet fiends, it may be considered paradise.

That’s because Kutztown’s fiber-optic television, phone and Internet infrastructure is a decade ahead of its time and is still one of the few municipal fiber-optic networks in the United States.

And though Verizon has picked up on the benefits of a fiber-to-the-home system and begun investing billions of dollars in the technology, it is systems like Kutztown’s that showed how advantageous a FTTH system is.

Not only does Kutztown’s Hometown Utilicom FTTH system cost less than most cable providers — a customer pays $18 per month for basic cable and $35 per month for expanded cable — but it also has capabilities that can make it relevant decades into the future. Customers on the system also get free digital and high-definition channels if they have a digital TV or HDTV.

First hatched in 1996, the Hometown Utilicom network in Kutztown was designed as a “talking” electric system, where if a transformer malfunctioned, it’d communicate with the main system and be easy to trace, said Frank Caruso, Kutztown’s director of information technology.

But now, the system services more than 1,000 households with Internet and cable, Caruso said. He said the system covers the entire 1.5 square miles of the municipality and there are about 2,200 electric meters in the area, so Hometown Utilicom serves 49 percent of the people in Kutztown.

Caruso said the borough’s total investment

in the project has been about $8 million since its inception, and the services are available to everyone within the borough, though some people elect to stay with the original service provider.

The money invested in the project didn’t come from a tax hike either. It came from a taxable bond that allows private companies to purchase and use the fiber lines and transfers from the borough’s Electric Service Fund. This debt could be repaid if the Kutztown’s town council decided to do so, Caruso said.

Caruso said the FTTH system doesn’t just help the customers using it. He said once the system went online, the competition’s cable TV prices split in half. People out of the service area pay about $53 for cable, but residents who have the choice of Hometown Utilicom or Service Electric Cable TV and Communications pay $25 for cable.

He said upfront cost is an issue for towns looking into a FTTH system, but since Kutztown’s system was activated in 2002, the town has estimated its residents have saved $1.5 million in cable, phone and Internet billing.

Carol Shawver, coordinator for the Carroll Cable Regulatory Commission, said Carroll looked into building a similar FTTH system and what came out of those discussions was the development of the Carroll County Public Network.

Cable commission member Robert Wack said the CCPN will connect the county government offices, the board of education, Carroll Community College and public libraries to each other and to other counties.

“Each of [those organization has] robust IT departments and have large communications and IT needs,” Wack said.

Wack hopes that building the CCPN will entice a provider to offer similar service in Westminster and perhaps throughout the county.

Broadband in demand

Caruso says that when Kutztown’s system was first being designed, the biggest step toward the future was in fiber’s broadband capabilities. After the planning for the system began, he said, the local cable provider asked him, “What do you need speed for?”

In 1996, he said, most people were still using dial-up, and Internet usage was just beginning to expand. But now, in the era of online gamers, online TV shows and YouTube, Caruso said Hometown Utilicom’s 2-megabit download speeds and variable upload speeds, depending on price, is why the system needed that speed.

And unlike cable systems that offer 5-megabit download speeds, which are split between 16 or 48 houses, decreasing speed when more users sign on, a fiber-optic system goes straight to your house with top speed all the time.

Computer information and memory space is divided into bits. One thousand bits is a kilobit; 1 million is a megabit. Dial-up connection usually transfers at 56 kilobits per second, and high-speed Internet allows for uploads and downloads in the range of megabits. The higher the connection speed, the faster the uploads and downloads.

Compared to Verizon’s FiOS, which stands for fiber-optic service, Caruso said, “We’re not similar to them; they’re similar to us.”

He said the backbone of their system could have a gigabit of broadband for upload and downloads, which could be a real possibility in the future.

What else is out there?

David St. John, spokesman for the FTTH council, said there are about 40 to 45 municipal systems in some stage of deployment that are similar to Kutztown’s.

The FTTH council is a Web-based nonprofit devoted to spreading the knowledge of fiber-optic systems’ capabilities, helping towns expand their broadband networks to the home, St. John said.

Besides municipal systems, Verizon has taken the biggest leap into the FTTH industry.

“Verizon has spent about $23 billion on building FTTH systems,” St. John said. “They’re building like crazy.”

He said Verizon announced it will soon offer 50-megabit-per-second downloads and 20 megabit-per-second uploads, and eventually it plans to offer 100 megabit-per-second uploads and downloads.

Surprisingly, though, St. John said, a lot of municipalities and small phone companies are providing FTTH systems in rural areas.

He said the smaller phone companies realized if they did not start making inroads toward the future, a bigger provider would eventually come in and take away their business.

He said this has led to a strange phenomenon where some people in rural areas have better Internet access than people in major cities.

There are about 600 providers of FTTH systems nationwide, but Verizon makes about two-thirds of the connections, he said.

The rivals

Caruso said what keeps Hometown Utilicom growing is that it isn’t a profit-based venture.

Kutztown doesn’t have shareholders or profit reports, so the price that customers pay is the price that will allow the system to break even.

“The system is here for the community,” Caruso said. “We have the mind-set to break even and cover costs to keep growing.”

But he said several states, including Pennsylvania, have lobbied against proposals for similar systems. If a municipality is looking to build its own FTTH or cable infrastructure, it would have to submit plans to the incumbent service provider.

The plans give the incumbent five years to build a system. Technically, according to Caruso, the incumbent could agree to build the system, then back out.

The problem this poses, according to Caruso, is towns and cities can only hold on to money for so long, and if they want to build a system now, who knows what their needs will be in five years?

“[The incumbent] can intentionally delay and stifle the entire idea,” Caruso said. St. John said the FTTH council has written to the Senate about the lobbyists stifling the fiber expansion.

Hopefully, he said, it will be able to grow without restriction in future years.

Reach staff writer Bryan Schutt 410-857-7886 or bryan.schutt@carrollcountytimes.com [1].

What it is

Fiber-to-the-home (FTTH) is the delivery of a communications signal over optical fiber from the operator’s switching equipment all the way to a home or business, thereby replacing existing copper infrastructure such as telephone wires and coaxial cable. Fiber-to-the-home is a relatively new and fast-growing method of providing vastly higher bandwidth to consumers, and thereby enabling more robust video, Internet and voice services.

Source: ftthcouncil.org

Cable timeline

1940s and 1950s

Cable television originated to enhance poor reception of over-the-air television signals in mountainous or geographically remote areas. “Community antennas” were erected on mountaintops or other high points, and homes were connected to the antenna towers to receive broadcast signals.

1960s

By 1962, almost 800 cable systems serving 850,000 subscribers were in business. Well-known corporate names like Westinghouse, TelePrompTer and Cox began investing in the business, complementing the efforts of early entrepreneurs like Bill Daniels, Martin Malarkey and Jack Kent Cooke.

1970s

In 1972, Charles Dolan and Gerald Levin of Sterling Manhattan Cable in New York launched the nation’s first pay television network, Home Box Office (HBO). This venture led to the creation of a national satellite distribution system that used a newly approved domestic satellite transmission. Satellites changed the business dramatically, paving the way for the explosive growth of program networks. By the end of the decade, nearly 16 million households in America were cable subscribers.

1980s

From 1984 through 1992, the industry spent more than $15 billion on the wiring of America, and billions more on program development. This was the largest private construction project since World War II. By the end of the decade, nearly 53 million households subscribed to cable, and cable program networks had increased from 28 in 1980 to 79 by 1989.

1990s

The satellite networks continued their explosive growth, based largely on the alternative idea of targeting programming to a specific “niche” audience. By the end of 1995, there were 139 cable programming services available nationwide, in addition to many regional programming networks. At the end of the decade, approximately seven in 10 television households, more than 65 million, had opted to subscribe to cable.

Also during the latter half of the decade, cable operating companies commenced a major upgrade of their distribution networks, investing $65 billion between 1996 and 2002 to build higher capacity hybrid networks of fiber optic and coaxial cable. These “broadband” networks provided multichannel video, two-way voice, high-speed Internet access, and high-definition and advanced digital video services, all on a single wire into the home.

2000s

As the new millennium got under way, cable companies began pilot testing video services that could change the way people watch television. Among these were video on demand, subscription video on demand and interactive TV.

In 2001, AT&T agreed to combine its cable systems with those of Comcast Corp., creating the largest-ever cable operator with more than 22 million customers.

By the end of 2007, about 65 million households were still receiving basic cable.

Source: www.ncta.com/About/About/HistoryofCableTelevision.aspx [2]