Kutztown, Pa., is completing a fiber-to-the-home municipal overbuild that will offer advanced voice, video and data services, competing with incumbent cable operator Service Electric Co.
The $4 million project uses Optical Solutions Inc.'s FiberPath 400 all-optical network, with assistance from Atlantic Engineering.
The town counts about 2,230 homes, which isn't normally conducive to expensive FTTH architecture. But a combination of factors will allow the borough to successfully operate its own broadband platform, officials said.
"We have pole ownerships, bucket trucks, technical crews that can maintain fiber and do the drops and the billing system in place," said borough manager Keith Hill. And the only shareholders Kutztown has to please are borough residents.
"We feel in order to attract customers to switch we have to be able to offer comparable service at a far more competitive price or enhanced service at a very competitive price," Hill said.
The borough already supplies residents with electric, water, sewage and trash services. Fiber — and a billing system — are already in place for the electrical utility.
And OSI's all-fiber optical network eliminates costs for such equipment as cable set-top boxes — as the system will employ traps —and cable modems, since Ethernet connections will be used.
About half the town's residential properties are rental units that cater to college students. Kutztown University, with 8,000 students, is just outside of town.
The borough plans to expand its FTTH build into areas that surround the campus, effectively raising penetration.
College students are an alluring audience because they're more likely to sign up for advanced services, such as high-speed Internet delivery, and more susceptible to pitches from service providers.
"[Off-campus] Students need to come through our front door for electric, water and sewer, and we think that gives us great exposure," Hill said.
Hill said the borough's been looking to build its own broadband system since the mid-1990s.
Fiber was already put in place to monitor the utilities, Hill said. "It wasn't that much more expensive to add additional fiber strands for supplemental revenue sources."
Those revenue sources include video, voice and data services, meter reading, bill payment, electronic commerce and advanced services for small businesses.
The Fiber Path 400 is the fourth generation of passive optical-networking gear from OSI, said chairman and CEO Darryl Ponder.
The consumer-premise equipment on the side of subscribers' homes includes up to four phone lines, as well as 100-base-T and cable TV interfaces. From there, "it hooks up to the normal phone and cable lines," Ponder said.
Inside homes, Kutztown will run a piece of category-5 twisted pair wire to high-speed-data users' computers, Ponder said.
"It goes into the network interface card in the computer," he said.
Likewise, Kutztown will provide analog cable service, even though OSI will support full-DTV service and trap premium-network signals, eliminating the set-top.
Kutztown will run coaxial cable from the TV set to the OSI unit on the side of the house.
Ponder said OSI has shipped about 250 units from the Fiber Path 400 series. Overall, the company has shipped 6,500 units from that product line, mainly to smaller, independent telephone companies.
Most of its customers are offering consumers video, voice and data services, Ponder said.
Kutztown University presents another interesting opportunity for the borough, which currently provides water and sewer service to the school, but not electricity.
Hill said Kutztown would approach the university about extending its on-campus fiber build. Hill envisions an area-wide, high-speed local area network (LAN) to connect on-campus facilities to off-campus students.
The city sold $2 million in taxable bonds to help pay for initial construction, Hill said. Utility payments also are helping to cover the costs. Most of the aerial fiber is in place, he said, and underground work is proceeding.
Hill hopes to start testing the system in May, and deliver service over the summer.
VOICE, PROGRAM DEALS
Kutztown is negotiating with an unnamed telephone service provider to supply voice service over its network. (Verizon Communications is the incumbent local phone company.)
Likewise, the National Cable Television Cooperative is helping Kutztown gain access to programming at the member rate.
Hill estimates that more than half the town's residents subscribe to cable service from Service Electric, which also offers cable-modem service. But Kutztown hasn't said how much it will charge for cable or data.
"We intend to be very competitive with our pricing," said Hill.
Kutztown's breakeven point will depend on the range of services the locality eventually decides to deploy and their various penetration levels, said Hill.
"We've taken a very conservative approach," Hill said.