40Gb/s Technology Update and Business Drivers

1. 40Gb/s Technology Update and Business Drivers John Fee Fellow Network Architecture and Advanced Technology MCI September 30, 2004

2. Agenda MCI’s Global Network and Services The Next Generation Advanced Optical Network Metro Transport/Access Network Evolution Laboratory Activities and development activities Technology Enablers Summary

3. MCI’s Global Network and Services

4. MCI Global Network $38B Invested 1997-2002

5. MCI Global Network Overview • Global Operations span 6 Continents • Five Global Network Operation Centers • 98,000 network route miles • More than 100,000 connected buildings worldwide • Global IP backbone • 140+ Countries, 2600+ Cities • 3.2 million + dial ports • 4,500 Global IP Pops • 130+ data centers • ATM services in 21 countries • Frame Relay services in 72 countries • One-stop global provider of data and internet solutions: • IP Virtual Private Networks • Web Hosting • Web Call Centers

6. Customer Base • 60% Fortune 1000 • A large portion of Global IP/Internet Traffic • Numerous US Government Contracts • 3.5 Million MCI Neighborhood Customers • Plus 10’s of millions Residential Long Distance Customers

7. What Makes MCI Different?MCI Service Levels FCC Reportable OutagesMarch 2003 - February 2004 Service Levels Best in the Industry and Continue to Improve

8. Technology Direction –IP Convergence • Consolidate Voice, Data, and IP on Common Access to Reduce Cost • Converges Voice, Data, and IP to Common IP Backbone • Foundation for the Infrastructure to Provide Enhanced IP Services and Network Infrastructure • Lead Industry in IP Convergence and IP Product Offerings

9. The NG Advanced Optical Network

10. MCI Optical Networking Firsts 1980’s 1990’s Single Mode Fiber - 1982 2.4 Gb/s (SONET) - 1991 405 Mb/s Electronics - 1982 First Public Frame Relay Network - 1991 First SCP/IN - 1984 Optical Amplifiers - 1993 565 Mb/s Electronics - 1984 Bidirectional Line Amplifier - 1995 First Email Service - 1985 OC-192 - 1995 810 Mb/s Electronics - 1987 All-Optical Network Field Trial - 1997 100 GHz ITU-T Standard- 1998 NSFNet - 1987 OC-192/Soliton Field Trial - 1998 1.2 Gb/s Electronics - 1988 OC-48c vBNS Implementation - 1998 WDM - 1988 Intelligent Data Service (SBOC) - 1998 1.8 Gb/s Electronics - 1989 Internet Optical Networking Trial - 1999 40Gb/s Technology Trials - 1999 First Commercial Terabit Trial - 1999

11. MCI Optical Networking Firsts Commercial Terabit Deployment - 2000 128 X 128 OCCS Technology Trial - 2000 UUNet OC-192c Optically Networked Router Development - 2000 3.2 Tb/s Technology Trial (40Gb/s X 80) - 2001 Multi-Service Switch Deployment - 2001 IP Communications Services - 2001 4000 km Ultra Long Reach Without Regeneration - 2001 IP Optical Layer Integration with 256 X 256 OCCS and GMPLS Control Plane - 2001 Next Generation 20 Pb/s*km Fiber 2003 40 Gb/s (90 Pb/s) router field trial, San Francisco 2004 Simultaneous 40/10G over 1200 km 2004 2000’s

12. Ultra Long Haul Backbone Network Lower bandwidth cost Maximize Operational Efficiency Enabling new services Lights Out Operation, MTTR < 4 hrs Troubleshooting and Diagnostic Tools allowing end-to-end Fault Detection and Isolation across Layer 0 – 3 Eliminate or Minimize Manual Intervention for System Provisioning Turn-On New Services, System Tuning Proactive Network Health and Customer Services Monitoring

13. ROADM 1 2 3  ROADM ROADM ROADM OCCS/Transit Hub OCCS/Transit Hub OCCS/Transit Hub OCCS/Transit Hub OCCS/Transit Hub OCCS/Transit Hub Ultra Long Haul Backbone Network ULH Backbone Network Attributes: • Eliminate O/E/O • Distance Reach: 3000 Km, Long Term – extend to 6000Km • Medium Dispersion Shifted Fiber: 20 petabits * km (now deployed) • Mixed 40G & 10G Transmission • OC-192c/OC-768c over Wavelength • Wavelength Add / Drop / Express based on multi-degree ROADM design • Wavelength Management / Provisioning via OCCS • Embedded Network Intelligence (L0/L1) – OSA, OTDR, OPM, SONET/SDH • Unified NG Network Management System

14. ROADM 1 2 3  ROADM ROADM ROADM OCCS/Transit Hub OCCS/Transit Hub OCCS/Transit Hub OCCS/Transit Hub OCCS/Transit Hub OCCS/Transit Hub Ultra Long Haul Backbone Network Optical Networking Applications • Network Topology Discovery and Resource Management • End-to-End Provisioning (Physical or Logical) • Optical Virtual Private Line / Wavelength Services • Wavelength Protection Switching and Restoration • Logical Network Topology Reconfiguration

15. IP Router IP Router Logical IP Mesh Layer 3 IP Router IP Router Signaling and Control Plane GMPLS/ASON UNI/NNI External Systems OCCS OCCS Optical Ring Layer 1 OCCS OCCS OCCS Integrated Optical Data Network Control Plane Goal: Interoperability Across Dissimilar Networks

16. Metro Transport/Access Network Evolution

17. Optical Access – ROADMWavelengths to Buildings and Large Customers • ROADM Multi-node optical rings • NG alternative to SONET • Initial deployment must be cost-effective • 3x-5x space/power reduction • Multi-Degree scalability, In-Service upgrade • Faster turn-up of additional optical capacity • Embedded protection to support 5 9s service availability and operation maintenance activities • Support GigE and OC-N from same platform • Rate adaptive customer interface from OC3-OC48, software provisioning of OC-N to GigE capacity • Wavelength tuning cross C+L band • Enables Metro Wavelength Services • Will support 40G

18. Core Hub IP Mega Hub Metro Hub 1 32 – 40 Wavelength OADM today, Growth to 80 Wavelength ROADM Tunable, Rate Adaptive Transponder Hosting Hub 8-16 Wavelength ROADM Metro Hub 2 NG SONET 32 -40 Wavelength ROADM NG Metro Transport Network • 2-Tier hierarchy for efficient scaling , cost minimizing • Different tools optimized for each customer type • ROADMs for large customers • OADM for small-medium customers • NG SONET ADM for smaller lower growth customers • Ethernet transport for Packet Services • 40G METRO capable • Ethernet Transport for Packet Services

19. Laboratory and Development Activities

20. Laboratory and Development Activities • Each year MCI sponsors an internal Technology Demonstration • Each year MCI presents papers at OFC, NFOEC, and OAA • We have written Optical RFI’s for: • Optical Cross-Connect System (OCCS) • Reconfigurable OADM (ROADM) • Low cost Optical Performance Monitoring (OPM) • Next Generation Fiber (NGF) • Advanced Modulation Techniques (2004) • 10G/40G transport • Next Generation Optical Amplification • Low Cost Very Short Reach (VSR) Interface

21. OpticalLaboratory Activities (cont) • 40 channels 4000 km DWDM ULH transmission field trial without Raman amplification and regeneration, OFC 2002 • Comparison of RZ/Raman and NRZ/EDFA optical transmission line performance at 40Gb/s and beyond for future deployment, OFC2001 • In 1999-2001 we tested Siemens, Alcatel,NORTEL 40 Gb/s systems. • In 1995-1999 we demonstrated 128X128 OCCS systems at both line and tributary side providing photonic provisioning, protection and restoration • In 2001 we demonstrated an Optical Performance Monitor measuring OSNR, dBQ, power, and wavelengths.

22. MCI NG Fiber Development Objectives • Next Generation fiber is designed for ULH (at 3000~6000 km), DWDM, 10G/40G network deployment • Fiber parameters enable 20 Pb/s*km for both short fat (2000 10 Gb/s wavelengths at 1000 km) and long thin (700 10 Gb/s wavelengths at 3000 km) architectures or equivalent wavelengths at 40G • Eliminate transport O/E/O • Introduce pass-through and multi-degree ROADM • Increase dispersion and PMD tolerance • Easier slope compensation and lower loss • Enhance new hybrid amplifier development THIS NG FIBER WILL SUPPORT 40G

23. Technology Enablers

24. 40GTechnology Enablers (2004 - 2007) • Terabits Ultra Long Reach Terrestrial System up to 3000Km • Alternative Modulation Format • Large Dispersion Tolerance • PMD Tolerance • Spectral Efficiency • NG Hybrid Amplifier - Hut-Skipping, 140 Km – 160 Km • 40 Gbs Transponder (Plug and Play) • Broadband PMDC • Tunable DCM (Optical Broadband, or Electrical Narrowband)

25. 40G Technology Enablers (2004 - 2007) • ROADM, Wavelength Selective Switch • Multiple Direction Migration • Any Wavelength Any Port to Any Wavelength Any Port • Protection Switch to support Optical Ring Application • Intelligent Optical Cross-Connect System (1000x1000) • Central Office Traffic Management • End-to-End Provisioning • Tunable optical transmitter/Receiver (C & L) • Low Cost Optical Performance Monitor • OSNR, Power, Wavelength • Plug in OSA and OTDR

26. 40GTechnology Enablers (2004 - 2007) • VSCEL Technology /Semiconductor Optical Amplifier • System on the chip (Optical, Electrical & Switch Fabric) • Tunable filter with tuning capabilities in • Channel Plan • Information Bandwidth Range • Operating Wavelength Range • Low cost Optical Performance Monitor • Optical Protection and Restoration • Optical Burst Switching and Routing, Optical Buffering & Wavelength Switching • Optical Tuneability, agility, and O/E synchronization

27. 2004 40G Demonstrations

28. OC768 Tester World’s First 40G IP Transmission: Power by Cisco CRS-1 over MCI Infrastructure MCI PoP – San Francisco MCI PoP – San Jose Cisco CRS-1Single-Shelf System Cisco CRS-1Single-Shelf System Agilent OC-768 StrataLightOTS-4000 StrataLightOTS-4000 CiscoONS 15454 CiscoONS 15454 MCIFiber Plant (104 KM) OC-768 CiscoMDS 9216 CiscoMDS 9216 Cisco12000 Cisco12000 Tester Tester Cisco CRS-1Single-Shelf System OC-48 Cisco CRS-1Multi-Shelf System OC-768 Computer History Museum

29. 40 Gb/s Field Overlay • 40 Gb/s Error Free over 1200+ km in the field over existing commercially-available line-amplified systems • Extra gain margin at 1200 km • Simulations matched field performance Simultaneous 40G and 10G transmission on the same fiber

30. General 40G Economic Information & Throughput Performance vs. 10 Gb/s

31. Factors Affecting the Cost/DS3_Mile • Bit Rate • 40G systems have generally lower Cost/DS3_Mile than 10G: • 40G systems carry 4 times as much traffic as 10G systems, for only three times increase in the transponders and regenerators cost. • The other components of the system (e.g. amplifiers and WDMs) are independent of the bit rate. • Regenerator Reach • Longer reach results in a lower Cost/DS3_Mile. However the limitation is the allowed bit rate and number of WLs. • Number of Wavelengths and Bands • Increasing the number of WLs in the same band lowers the Cost/DS3_Mile, but if a new band is added, the increase in the amplifier cost may cancel out the advantage of the additional WLs. (Internal Study)

32. Maximum Link Utilization for P(Hurst) = 10-3 Queueing Delay 40G extrapolation results: Max imum link utilization with TCP traffic giving a max 1 mS queuing delay at node: • OC-192: 94% - 97% depending on traffic characteristics (H value) • OC-768: 98%

33. Summary

34. Summary • Business drivers today are savings and revenue vs. rapid growth • Capital will be business case driven • Any New technology must have very low cost of entry to be adopted • Open systems and multi-vendor interoperability is critical • Emerging optical services are still in development • Most new revenue will derive from the services converged on the packet layer • Careful integration between optical & packet layer will be required • We will live in a hybrid world for the foreseeable future • 40G will emerge when customers demand it

35. 2400 North Glenville Drive Richardson, TX 75082 972 729 6571 Fax 972 729 7261 john.fee@mci.com John Fee Fellow Network Architecture & Advanced Technology Thank You!