[JTND] Personal View: FTTH in Japan

[Matatabi Report <editor@matatabi.com>]

[I have NTT East B FLET'S New-Family service (100Mbps optical fiber
service) at home for four months. According to NIKKEI story this week,
NTT East will cut the B FLET'S fee by 1,000 yen in March. As a result,
FTTH will be available for around U.S.$50 a month in Japan. It means
that NTT now offers FTTH at a price that gives some competition with
ADSL. NTT has big investment in optical fiber infrastructure, and its
strategy for broadband is to let the users leap directly to the
fiber. The FTTH subscribers in Japan were 206,000 at the end of
2002. They were only 9,000 a year ago.]

I had ADSL for a year and a half when I heard that NTT's optical fiber
service was available soon in my neighborhood. I live in the suburb of
Yokohama, 30 miles south of Tokyo. My house was more than 3.2km (2
miles) away from the local exchange and the ADSL ( 8Mbps Service)
connected only at 600kbps(down). So, it was a relatively easy decision
my switching to FTTH although there was a 30000 yen(U.S.$250)
installation fee and my monthly service fee would increase by 3000 yen
(U.S.$25).

I waited for 3 weeks for the installation.  Three NTT contract workers
came to my place. One worked outside from a cherry picker getting the
fiber line from a telephone pole to the wall just outside of the room
where I wanted to install the ONU(Optical Network Unit), the second
guy installed ONU in the room, and the other guy controlled the traffic
in front of the house. A tiny hole was drilled in the wall and the
fiber cable was pulled into the room and was connected to the ONU.

Drilling a hole seems the biggest obstacle installing FTTH. Unless you
have a duct for air-conditioning or some other pipes coming into the
room from the wall outside, a small hole must be made.  If you live in
a condo or an apartment, your landlord (or the tenants union) often
won't allow drilling of a hole.

The NTT installation was completed in just over an hour without a
hitch. They tested the line, got my signature, and left. I removed the
Ethernet cable from ADSL modem and inserted it in ONU. I made some
changes in the configuration of my router and I was on the net
again. The whole process was a lot easier than I expected. 

Here's breakdown of my FTTH bill:

One time fee	installation	       27,100 yen

Monthly fee	basic subscription	5,800 yen (4,800 in March)
		inside wiring		  200 yen
		ONU rental		  900 yen

Monthly Total (including 5% consumption tax )   7,245 yen (U.S. $60)*

	*I pay additional U.S. $25 to my ISP. You have to choose an ISP
 	that supports FLET'S to surf the Internet. NTT East gives you
 	just a connection to the NTT's regional (prefectural) IP
 	network and your ISP takes over from there to the
 	Internet. The lowest price ISP that I find for the B FLET'S is
 	500 yen (without using any limited time promotion
 	programs.). There are currently several ISPs gives you free
 	services for up to several months with a long term contract.


My Internet connection fee increased by 3,000 yen ($25) a month when I
switched to FTTH from ADSL. Can I justify $25? So far, I think so. I'm
currently getting 50Mbps(down) and 25Mbps(up). In the New-Family
program, I share the bandwidth with up to 32 users. The service has
been excellent. There has been no unannounced downtime. The dynamic IP
address assigned by the ISP remains the same for a few weeks. The
faster upload saves time when I maintain the web site and I have no
trouble sending big files such as CD images to clients.

For non-business users, I suspect currently there is a few
applications and contents that take advantage of the high speed
connection. It is nice to watch movie trailers at 500 kbps and
simultaneously to download files though. According to a recent survey
conducted by Mitsubishi Research Institute and NTT-X (which runs a
portal site), more than 80% of FTTH users currently don't buy pay
services such as movie and music download. Less than 10% pay for the
contents every month.  Those who pay spend an average of 1,545 yen a
month. It is true that there is a few good broadband contents
available today, but the survey suggests that the FTTH users still
don't pay for contents.

In my experience, FTTH won't speed up loading web pages much. If the
FTTH users don't buy movies and music, what are they doing with their
ultra high speed connection? The survey did not ask about the use of
P2P. From what I hear from some FTTH users, it seems some of the heavy
users get the fiber for file exchange and sharing. A new P2P program
called Winny is popular among them. Winny is being developed by an
anonymous programmer. The author got the idea of Winny from Freenet,
but made almost everything encrypted including filenames, files and
cache. Since there is only Japanese version, the program has not
spread beyond Japan. Although JASRAC (ASCAP of Japan) won't be quiet
for too long, Winny and the other new generation of P2P programs are
likely to fuel the early FTTH growth in Japan.


NTT B FLET'S New Family Press Release(English)
http://www.ntt-east.co.jp/release_e/0204/020411c.html

FTTH User Survey Press Release (Japanese)
Mitsubishi Research Institute Inc.
http://www.mri.co.jp/NEWS/2003/pr03012010.html

[key_opinion, key_internet]
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