In their paper published on the Australian Policy Online site, Robert and Charles Kenny make a strong case refuting some of the benefits that FTTH advocates claim and argue that subsidy isn't justified as the benefits aren't necessarily real.
I broadly agree with their arguments that fiber broadband isn't necessary for many of the applications often quoted as requiring extreme bandwidth, and that rushing to give taxpayers money to incumbent carriers to replace their copper with fiber access networks isn't warranted.
There are some oversights in their argument however.
One problem with current Internet access is the cost. With any scarce commodity it is common to use price as an exclusion to ration distribution and so it is with Internet bandwidth.
BT's first attempt at a national IP network (Colossus) wasn't fit for purpose. It didn't scale to carry the bandwidth required by their centralised wholesale access network design. BT's response was to introduce punitive usage charges onto the ISPs who pass these on to their customers, for example in inclusive usage offers, caps, application traffic shaping and overusage fees.
BT's own retail consumer entry-level ADSL service includes 10GB usage allowance each month - this could be consumed in less than two minutes on a full-speed Gigabit connection. If FTTH was being implemented on a grand scale, the problems of the inadequate backbone infrastructure would be thrown into sharp relief.
The problem can't be solved by tinkering with bandwidth prices or including bigger allowances - the new backbone network needs to be engineered differently to cope with three-orders-of-magnitude bandwidth jumps and new applications at the access layer. I would suggest local/regional routing and multicast as two technologies that should be deployed for a start, content centric networks might be the ultimate solution.
The perception that bandwidth is scarce and so must be rationed, usage fees levied and applications restricted has to be dispelled so we can move on to the next level.
Unfortunately it is in the carriers' interests to keep the status quo - their usage charging has moved from being a simple rationing system to being a handy source of revenue, and they would seek to extend this by subverting net neutrality too, so they can charge even more when they can.
Dismissing FTTH as being unecessary or unwarranted means not only that the old copper access networks will be given a life extension, but so will the backbone networks that connect them, eventually leading to Britain looking like the last users of tallow candles in an LED lit world.