FTTH is the gold standard of fixed broadband technologies
USA, through initiatives such as the USD42bn BEAD program, hopes to connect over 42 million unserved, mostly rural Americans to high-speed broadband. A goal of this magnitude necessitates the correct mix of technologies, policies, and incentives – especially in a country with such demographic and geographic complexity. Cable (~60% penetration) is still the preferred technology among FBB subscribers, but FTTH (~20% penetration) and FWA (~10% penetration), are gradually gaining share, changing the dynamics of one of the largest markets in the world.
FTTH offers a combination of speed, reliability, and future-proof connectivity, making it the gold standard for broadband technology. Its widespread adoption, however, is hindered by expensive and timeconsuming last-mile deployment – especially in low-density rural settings. This has led to 15% more households in urban states being connected to fiber (42.1% rural vs 67.2% urban penetration in 2023). This urban-rural divide is a result of high-density urban deployments having lower costs per household passed. FTTH’s economic and logistical viability in rural environments is harder to justify, opening the possibility for wireless services like FSS and FWA.
FTTH is the gold standard of fixed broadband technologies
Driven by a slowdown in urban fiber subscriptions and the rise of government incentives such as the FCC’s 5G Fund for Rural America, leading MNOs are increasingly expanding their 5G coverage in rural areas. Given that capacity constraints are negligible in these low-density settings, MNOs are aggressively deploying FWA (Figure 1) in their efforts to maximize revenue by using spare spectrum capacity.
Such FWA growth is viable since it possesses advantages over FTTH, namely deployment speed and lastmile cost benefits, that make it a more worthy alternative to legacy wired broadband in rural deployments. With 5G advancements and greater spectrum availability alleviating historical concerns around speed and reliability, FWA represents an astonishing 97% of new US broadband connections in 2023.
FIGURE 1
Over time, FTTH will become the dominant technology connecting rural USA
FTTH, on the back of recent subsidies and increasing interest from deep-pocketed infrastructure investors, is expected to expand rapidly across rural USA. With FTTH’s superior speed, reliability, future-proof connectivity, and significantly lower operational costs, FWA is likely to experience substantial growth roadblocks. Moreover, the need for solid backhaul infrastructure for FWA networks naturally introduces fiber into these regions, making the business case for FTTH more compelling. FWA dominance, then, will be restricted to specific locations where FTTH remains unviable even in the long term. These locations will also see competition from FSS and the new breed of high-speed and low-latency low earth orbit satellites such as SpaceX’s Starlink.
FWA’s current rural trajectory, hence, is transitory at best. FTTH, aligned with rural fiberization trends seen in Europe, is best placed to be the key technology connecting the rural US in the long term.
