Plum Examine the Gigabit Broadband Question of HFC vs FTTP

A new paper from Plum Consulting, which was commissioned by Cityfibre, has assessed the viability of using both Hybrid Fibre Coax (HFC – Virgin Media) and Fibre-to-the-Premises (FTTP) based networks to achieve the UK Government’s aim of bringing “gigabit-capable broadband” to every home by 2025.

As we’ve discussed before (here), the main advantage of the Government’s decision to adopt “gigabit” (1000Mbps+) terminology instead of one based around a pure “full fibre” mentality is that it enables them to be more technology neutral. As a result their 2025 target is now more viable than if it were entirely fibre focused (there’s simply no way they were every going to hit 100% FTTP by 2025), albeit still extremely challenging to achieve.

The primary reason for this is because Virgin Media’s HFC (cable) network already covers roughly half of all premises and it’s in the process of being upgraded to DOCSIS 3.1 technology by 2021 (here), which is making download speeds of 1Gbps+ possible. Sadly upstream performance remains very limited on HFC and is currently just 52Mbps on the new tier, but we’d expect 100Mbps to surface further down the road.

Overall the paper says broadly what we’d expect it to say, which is that HFC networks can and will help to achieve the Government’s target. On the other hand it warns that HFC performance may struggle to keep up with FTTP further down the road.

We should point out that the above table considers a future upgrade to full duplex DOCSIS 4.0 technology, which it rightly notes could be problematic. Unlike the upgrade to DOCSIS 3.1, any move to 4.0 would be a major and very costly upgrade for Virgin Media to undertake (i.e. digging fibre nearer to homes and the replacement of splitters, isolators etc.). Generally speaking we wouldn’t expect them to be contemplating this for a long time (if ever – an upgrade to pure FTTP is another option, albeit also a costly one).

The report does however overlook Liberty Global’s (parent of Virgin Media) tentative proposals to launch Liberty Networks in the UK (here), which seems likely to both build more FTTP into increasingly challenging areas (i.e. the other 8-10 million premises) and to potentially open up Virgin’s existing HFC network to wholesale by other ISPs (e.g. Sky Broadband).

Plum’s paper also briefly touches on the possibility of 5G and Fixed Wireless Access (FWA) based broadband networks being used to deliver gigabit capability, although its assessment on that front is very limited because that was not the focus of this paper.

Plum’s Conclusion

Broadly, we see investment in FTTP as the “better” option for public or gap funded investment, providing a more resilient, “future-proof”, and economically efficient solution (importantly inclusive of ability to support symmetric gigabit data services), supporting open access and thereby effective market competition.

However, where legacy cable networks exist, we believe that there is some value in exploiting these with some incremental investment, which could provide evolution from legacy cable technologies to the newer DOCSIS 3.1 standards and above.

Other technologies such as fixed wireless access (FWA) (whether using cellular 4G or 5G, or dedicated FWA solutions) should not be discounted, and different areas of the UK may well require different technology solutions, if Government targets are to be met efficiently.

With some concerns over the resilience of HFC technology and ability to effectively support competitive access, we conclude that an effective approach will include leverage of HFC networks, where these can be efficiently upgraded (rather than further built out) and used to provide gigabit services. Inclusion of premises addressed by HFC technology will enable Government targets to be met more effectively in the near term.

However, FTTP technology should be deployed in areas where HFC is not available, which, practically, means all areas where new gigabit-capable network must be built (and can be deployed with reasonable cost efficiency). In areas where FTTP is not cost-efficient, and legacy HFC is not available, innovative solutions such as FWA or hybrid fibre-wireless networks should be considered.

In the longer term, FTTP should be built out comprehensively in the UK, as a resilient and future-proof long-term solution, supporting the nation’s digital services economy.

You can download the otherwise fairly short report online (here).