WHAT DRIVES CONSTRUCTION COST?

The estimates used for construction should reflect current market conditions and take into consideration the market conditions likely to exist one to three years in the future. During the time between completion of the study and potential construction of the utility, your community will examine many options concerning service offerings, potential public-private partnerships, financing, etc.

An accurate understanding of the construction market depends on the experience your consultant has working directly with contractors. Using broad national or regional averages for construction and operational costs are unreliable when making estimates for a particular community. For example, smaller, rural cities have very different construction costs than dense, urban areas. Average figures may also fail to include important costs like initial site surveys, subscriber conversion costs, and factors unique to a given community.

INDIVIDUAL COST DRIVERS

AERIAL OR BURIED CONSTRUCTION

Buried

Higher Labor Cost compared to Aerial placement
Material cost similar to Aerial
Lower Operation cost
- Pole Attachment fees
- Less Maintenance cost
- Less repair/replacement due to storm damage
- Normal pole life replacement

LABOR COSTS

Labor costs are approximately 60% to 85% of Total Project Construction Cost
- All Town project – Labor Cost range from 70% to 85%
- All Rural project – Labor Cost range from 60% to 75%

SUBSCRIBER DENSITY

Subscriber density per mile has the following Impact to average project costs (Key component to understand when discussing OSP cost per subscriber and cost per mile)
- Shall increase the average construction cost per mile as density increases
- Shall decrease the average construction cost per subscriber as density increases
- Cost can range from
  - $1,000.00/sub to $15,000.00/sub (Heavy urban to very rural)
  - $300,000/mile to $12,000.00/mile (Heavy urban to very rural)

MATERIAL DECISION

Material Decisions for FTTH normally adhere to the following trend
- The greater the cost during the initial deployment, the easier and more economical the released plant will be related to ongoing OSP maintenance
Typical Material Decisions
- Mainline & Subscriber Cable
  - Direct Buried or Place Duct & install fiber inside
  - Direct Buried
    - Less Costly
    - More susceptible to damage
    - More time consuming to repair

SPLICING

Mechanical Connection
- Least costly
- High Loss per location
- Normally only utilized for termination of drop at House (not standard practice)
Fusion w/ Protection Sleeve
Connectorized

DOWNLOAD “FIBER TO THE PREMISES 101”

This guide has been written to help communities choose a consultant to investigate the feasibility of a fiber-to-the-premises (FTTP) project, and to encourage proper use of the completed study. A well-documented study used properly can launch a successful project or avoid an unsuccessful one. A poorly prepared study or one improperly used by project leaders can mire your community in confusion and controversy.

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