Fiber Internet overtakes cable

By Peter Svensson ASSOCIATED PRESS | Monday, July 7, 2008

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NEW YORK | For the first time, more people around the world are signing up for fiber-optic broadband service than for cable Internet service, according to a British research firm.

Fiber providers added 4.2 million customers in the first quarter, while 2.5 million customers signed up for cable modems, according to a report released last week by Point Topic.

The bulk of the new fiber subscribers are in China, where 2.5 million signed up, for a total of 16.7 million. The U.S. is in fourth place after Japan and North Korea. Point Topic counted 303,000 new U.S. fiber customers, for a total of 2.6 million.

Fiber-optic Internet connections provide faster speeds, but the cost of the buildout is daunting. In deregulated telecommunications markets like those of the U.S. and Western Europe, carriers are not sure if fiber is worth the investment because they are competing there with cheaper technologies like cable and DSL, and it's not clear how much regulators will let them profit.

"It's difficult to persuade operators to make the sort of commitment needed when they can't guarantee their returns," said Oliver Johnson, chief executive of Point Topic. Without government funding, it will be a long time before fiber connections are widespread, he said.

Verizon Communications Inc. is the only major U.S. telecommunications company to pull fiber all the way to subscriber homes. Verizon accounts for slightly more than two-thirds of total U.S. fiber hookups. The rest of the fiber-to-the-home, or FTTH, deployments are by small phone companies and by municipalities.

Cable modems are far more common, at 79.6 million worldwide, according to Point Topic, compared with 42.1 million fiber connections. More than half, or 40.1 million, of all cable subscribers are in the U.S., which has a comparatively extensive cable infrastructure.

Broadband over phone lines remains the most common means of Internet access. Globally, 238.1 million households had DSL, or digital subscriber line, an increase of 9.3 million over the quarter, Point Topic said.

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