SUPERCOM 2002: Session Net-01

1. SUPERCOM 2002: Session Net-01 Fundamentals of DSL Technology and Applications (Technical Session) Session: Net-01: Tuesday, June 4, 2002 Judith Hellerstein, President Hellerstein & Associates 2400 Virginia Avenue NW, Suite 1023C Washington, DC 20037 Phone: (202) 333-6517 Fax: (509) 355-9792 Judith@jhellerstein.com www.jhellerstein.com

2. Introduction • Broadband, What it is, Why is it Important • Focus on DSL • Fundamentals of DSL • Government Actions/Initiatives to Spur Broadband Deployment • Key Players: FCC and Department of Commerce • Key Regulatory Terms and Initiatives • DSL Today: Lessons Learned From Successful International Deployments

3. What do We Mean by Broadband • No established legal definition for what constitutes Broadband • Broadband means different things to different people • Lack of a clear definition, makes planning, vision and goal setting difficult • FCC has one definition, the ITU uses another, Congress a third definition, the OECD uses a fourth, and industry uses another definition • Need to have some clear idea or definition for the terms broadband access or broadband deployment.

4. How Should Broadband be Defined? • FCC Defines broadband as 200K or above in both directions • The ITU, however, defines broadband as higher than 1.5-2 Mb • Other suggested definitions include: • Defined by the type of services and applications offered, such as voice, video, data, music, and not by bandwidth • Two definitions, one that describes current technologies and the other that describes next-generation technologies • Intel and other companies suggest that broadband be defined as 4 MB and Next Generation be defined as 100 Mb or more • No definition • A different definition for consumers than for businesses

5. Four Broadband Access Technologies • DSL: 386K-7 Mb • Cable Modems 1Mb • Fixed Broadband Wireless: 10Mb/s - 10Gb/s • Satellite: 300K- 2Mb

6. DSL Flavors • Many Flavors of DSL • Each flavor is dependent on: • The distance between the end user and the central office. • The DSL equipment used • DSL functionality is determined by the chipset that is included in the flavor offered.

7. Standards Based DSL Variants • Asymmetric and Symmetric • ADSL and G.Lite • HDSL2 and G. Shdsl • VDSL, Standard in progress

8. ADSL/ HDSL2 • ADSL • Used for all consumer DSL applications and some business applications • HDSL2 • An improved version of HDSL that requires only one copper pair • Symmetric solution that is spectrally compatible with ADSL • Superior reach, up to 24,000 feet

9. SHDSL • G.Shdsl • Spectrally compatible with ADSL and other technologies • Rate adaptive form of HDSL2 • Longer reach from 6,000-20,000 feet • Works over worst-case loops and worst-case interferers • Single pair (2 wire) • Speeds from 324K to 2.3 Mbps • Uses line probing to evaluate lines, analyze noise & loop environment & pick best data-rate and power back-off depending on situation • Two region specific annexes: North America and Europe

10. VDSL • VDSL • Very High speed DSL that provides ultra-high bandwidth for video delivery • Primary application is for video-on-demand, broadcast TV like functions • Spectrally compatible with other DSL flavors • Provides high bandwidth over short distances, less than 4,000 feet from the DSLAM • Downstream is from 12.96-52 Mbps • Upstream is from 1.6- 16 Mb • Standardization being delayed because of the inability to chose between two different line codes • The VDSL Alliance supports a variation of DMT (Discrete MultiTone), while the VDSL Coalition supports a combination of QAM (Quadrature Amplitude Modulation) and CAP (Carrierless Amplitude Phase)

11. Interoperability/ Spectrum Management • Interoperability is key, both among different DSL technologies and among equipment providers • Interoperability is a critical first step in getting to certification • Along with Interoperability, Spectrum Compatibility and Management is a crucial issue that needs to be addressed • Development of spectrum compatibility standards is essential to reduce cross talk and other forms of spectrum interference

12. Essential DSL Implementation Issues • Self Installation • Automated provisioning systems and processes • Flow through of all orders for every provider whether CLEC, DLEC, ILEC, or ISP • Provide customer and technical support personnel with all the tools needed to resolve problems

13. Infrastructure Changes • Broadband access is not only about plumbing, ie, providing the pipes to carry the traffic, it is about: • Applications that generate extra revenue for suppliers • New content delivery models • Formation of partnerships between website owners and content delivery providers • Ability to dynamically create and display information on websites based on the type of connection (narrowband or broadband) or device accessing the information (PC, mobile phone, PDA, or other Internet appliance) without user/customer intervention • Revamping of Web sites to design and format them for the high bandwidth user

14. Key Regulatory Terms and Initiatives • Line Sharing Order • Provides Data LECs with the ability to use the high frequency part of the loop to provide data services to customers, while ILEC uses the lower frequency part to provide voice services. • Eliminates the need to provision a second line for data services • It is this Order which the DC Court of Appeals on May 24 struck down and remanded back tot he FCC • UNE Order • Added DSL-capable loops, dark fiber, subloops, DLCs, inside wire, and high-capacity loops to list of network elements required to be unbundled.

15. Key Regulatory Terms and Initiatives • Collocation Order • How should the FCC treat DLCs and RTs • Should the FCC mandate collocation in DLC/RT • A Digital Loop Carrier (DLC) is a remote unit that connects a number of subscribers to a Central Office. A single connection runs from the Central Office to a DLC. Copper pairs then connects the DLC to the end user. • A DLC’s key advantage is that it reduces the length and number of direct connections from customer premises to the central office.

16. Remote Terminals • According to the FCC’s collocation rules, ILECs must make physical collocation space available wherever this is technically feasible, even within an ILEC controlled Digital Loop Carrier, whether it be a Remote Terminal, Hut, or Controlled Environmental Vault • If there is no collocation space, a CLEC must be allowed to construct a CEV or similar structure on adjacent land

17. DLC Issues • Another problem with Remote Terminals and DLCs is: • Data CLECs want to collocate in ILEC end offices and get “clean” copper loops that run continuously from the customer to the DSLAM in the Central Office • However, most of the new DLC deployments do not have“clean” copper loops, just fiber • DSLAMs cannot connect to fiber

18. New FCC Broadband Initiatives • Triennial UNE Review • Dominant/Non-Dominant • Broadband Notice of Proposed Rulemaking (NPRM) • Cable Modem Notice of Inquiry, Declaratory Ruling, and Notice of Proposed Rulemaking

19. Triennial UNE Review • Focuses on the availability of UNEs used for delivery of broadband and decides whether they meet the “necessary and impair” standard • Reviews all UNEs and decides which ones are still critical to ensure broadband deployment • Should the FCC unbundle high capacity loops and transport facilities • Should the FCC modify its definition of the loop • How should the FCC treat next-generation or fiber networks

20. Dominant/Non-Dominant • What is the correct definition of the broadband telecom service market • Should an incumbent LEC that provides broadband service continue to be subject to dominant carrier regulation for that service

21. Broadband Notice of Proposed Rulemaking • Focuses on the legal classifications of Telecom and Internet services • Answers questions such as, what is the legal and policy framework for “broadband” under Title I and Title II of the Communications Act • Are access requirements appropriate in today’s market • How does Universal Service funding remain sufficient and predictable as services migrate to broadband platforms

22. Problems with Broadband NPRM • FCC has traditionally thought of common carrier telecommunications as being divided into two simple categories, basic services and enhanced services, and has regulated services based on the extent to which a particular service fell within these two categories. • With this NPRM, the FCC now believes, at least tentatively, that the transmission component for broadband services and for Internet access, should be offered outside of the statutory framework that applies to telecommunications carriers. • However, before attempting to change the current regulatory framework, the FCC first needs to better define what it means by broadband or broadband services

23. NTIA Survey on Broadband Deployment • In 2001, both NTIA and the Technology Administration held several forums on broadband deployment and on digital rights management issues • In November 2001, NTIA issued a notice of inquiry asking for comments on a series of issues relating to broadband deployment • Issues included • Supply and demand for broadband services • Any technical, economic, or regulatory barriers • A better definition for broadband and broadband services

24. NTIA’s Guideposts for Facilitating Broadband Deployment • Market, not government, should drive broadband’s rollout. • Government’s role is to remove regulatory roadblocks that impede efficient capital investment • Rational facilities investment should be the ultimate goal of policies the government pursues • Promote competition through a technology-neutral paradigm • Recognize that the market might not always work well or at the same pace in all areas • After a new regulatory framework has been established make sure it is backed up with enforcement measures with real teeth

25. How did the Industry Respond to NTIA’s Inquiry? • The majority of all the commenters called for some kind of subsidy to incent companies to deploy broadband in all areas of the country, specifically in rural areas • Most popular type of subsidy mentioned requested were: • Tax breaks • Tax credits • Low interest loans • Loan guarantees • Accelerating depreciation schedules

26. Technology Administration’s Broadband Goals • Educate companies on the value of broadband by identifying and commending innovative uses of broadband applications • Enforce laws to protect intellectual property rights and help better educate consumers around the world about these laws • Accelerate the depreciation schedules for business investment in broadband infrastructure equipment • Urge Congress to make the R&D tax credit permanent to incent further broadband-enabling technologies

27. Technology Administration’s Goals • Support market development by using broadband technologies in government led initiatives, such as procurement and e-government initiatives • Local governments can partner with local users to aggregate demand and make the market case for deployment more compelling to carriers • Work with State and Local Governments to identify and adopt best practices with respect to rights of way, tower siting, zoning, taxation, building codes, and other issues • Identify and support international telecom policies that promote broadband growth

28. Success of DSL Internationally • Japan 1.52 million • Taiwan: 1.1 million • Korea: 5.03 million • Canada 1.02 million • Germany: 1.8 million • France: 430 million • Italy: 390,000 • UK: 127,000

29. US DSL Penetration • Low penetration rates in the US are not caused by regulatory issues or constraints • In Japan, where competition is intense, prices are lower, services are higher, and subscribers are plentiful. Yahoo Japan offers a promotion rate of $19 a month • Japan, Canada, Korea, and a host of other countries charge less than $22 for DSL and prices will likely drop for low speed DSL as competition with cable companies heats up. • Instead,low penetration rates are the result of several other factors: • High prices • A lack of understanding of why consumers need high-speed access as well as other demand side challenges at the prices charged • Lack of any direct competitors to the incumbents • Lack of local broadband content

30. Broadband Penetration per 100 Inhabitants (OECD data)

31. Conclusion • Reviewed the Fundamentals Behind DSL • The critical need for interoperability and spectrum management • DSL Implementation Issues • Key infrastructure changes resulting from broadband deployments • Government Actions to Spur Broadband Deployment • Regulatory actions tend to affect the type of broadband access service used, the speed of deployment, the price charged, and geographic coverage • DSL Today: Lessons Learned From Successful International Deployments • Broadband and Internet access will continue to increase • The demand is real, it is just a question of cost, time and the lack of any killer application

32. Questions, Comments, Suggestions? Judith Hellerstein, President Hellerstein & Associates 2400 Virginia Avenue NW Washington, DC 20037 Phone: (202) 333-6517 Fax: (509) 355-9792 Judith@jhellerstein.com www.jhellerstein.com Thank You