The Optical Line Terminal (OLT) is a generic name for the electronics that sends and receives the laser light to/from the FTTH fiber network. It is sometimes referred to as a router or a switch.
There are two FTTH architectures that are widely used. GPON uses passive optical splitters either in the field or in the central office. GPON can be used to reduce the amount of fiber needed in your network, typically by a factor of 24x. That's a huge factor, but as cost of fiber has gone down, and other labor costs such as trenching has gone up, overall project savings are relatively small.
A Point to Point architecture uses a single fiber from the central office for each customer. No optical splitters are used, and usually some form of 1 Gbps bi-directional Ethernet is used on the link.
The various Passive Optical Network (PON) architectures were initially developed to economize the use of fiber. Since fiber has such huge bandwidth, the thinking was that you could share the bandwidth of a single fiber among many customers, and thus lower your network installation costs. The differences between a PON and a simple point to point network can be dramatic. For 5,000 customers, you would have to have 5,000 or more fibers leaving your central office, as compared to about 200 fibers in a PON. You also use fewer active electronic ports in your central office - again 5,000 versus 200 ports.
Even if your outside plant has one fiber per customer, many ISP continue to use optical splitters and PON equipment in the central office if for no other reason to keep the number of ports and thus rack spaces and active electronics down to manageable level. A small municipal ISP with 10,000 customers would need about six racks to house the electronics for point to point Ethernet, versus less than one rack for a GPON solution.
The current dominant PON architecture is GPON. It provides 2.5 Gbps downstream to the customer shared typically by up to 32 customers, and 1.2 Gbps upstream to the Internet, again shared by the customers on the same GPON port.
A point to point network will give each customer a 1 Gbps dedicated down and uplink. Since no splitters are used, the network is easier to diagnose when a fault occurs, and it generally has a large optical link budget (meaning more reliability in degraded conditions).
While the cost savings in fiber may be large for a PON network, it turns out that, especially if you bury your fiber, other costs such as trenching labor costs far outweigh fiber costs. And as time has marched on, both equipment port costs and fiber cable costs have dramatically fallen.
Bandwidth useage continues to climb. When PONs were created, sharing a 2.5 Gbps link among 32 customers was not considered a limiting factor. Present day, however, we have households that are downloading 100 GB games and watching 4K movies. Sharing even a 2.5 Gbps link is starting to be an issue (some GPON ISPs are finding they have to balance out their PON port useage to spread out heavy users among different ports).
I'm a fan of point to point architectures for smaller networks (say less than 1,000 customers). They needn't be expensive to equip. Here's an example of a 48 port 1G/10G switch with dual redundant power supplies that costs about $3400. With point to point Ethernet SFP modules costing $10, you can equip your central office for $80 per customer, which is comparable to what a GPON router would cost per customer. Regardless, $80 per customer is a fraction of the cost of the FTTH network itself (several thousands of dollars typically), meaning it isn't a big expense in terms of overall project cost.
Already today, you can buy NG-PON2 equipment that gives you a shared 40 Gbps PON with up to 10 Gbps uplink/downlink per customer. Similarly, you can deploy 10 Gbps point to point Ethernet links. A few larger ISPs are even offering 10 Gbps links now to their customers (this only makes sense if you are large enough to have at least 10 Gbps uplinks).
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