Carrier Ethernet Transport Drivers & Applications

1. Carrier EthernetTransport Drivers & Applications presented at

2. Overview • Ethernet transport is a key enabler for Ethernet (& IP) services • Uniquely meets most stringent service requirements • Improve service coverage and time to market • Accommodates today’s transport infrastructure and enables for future migration • Key applications in • Residential triple play backbones • Wireless access/backhaul • Data center networking • Resilient access to switched/routed data services networks

3. Ethernet Transport Outline • Transport in the Carrier Ethernet world • Enabling technologies review • Carrier motivations for and characteristics of Ethernet transport • Networking applications • Ethernet services delivery • Ethernet transport infrastructure

4. Ethernet Transport and “Carrier Ethernet” Vendor Community Service Provider Community • Freedom in service offering • Many types of services for many customers • Freedom in equipment innovation • Multiple delivery technologies Multipoint-to-Multipoint EVC Point-to-Point EVC UNI UNI CE CE UNI CE MEN MEN CE UNI UNI CE CE E-Line Service type UNI E-LAN Service type

5. IP and Ethernet over Any Infrastructure Source: Heavy Reading Technology for Ethernet Services 50+ % of Ethernet Services utilize SONET ~30% of Ethernet services utilize DWDM MPLS, RPR technologies are also used 50% 30% 20% IP-based Services SONET WDM MPLS Ethernet L3 RPR VOIP IPTV Internet IP-VPN Ethernet Connectivity Services E-LINE E-LAN Connectivity Services Separation VLAN MPLS Transport MAC in MAC Multiple Transport Technologies RPR WDM PDH ATM Ethernet SONET/SDH PON DSL

6. Enabling Technologies

7. Ethernet Transport Functions & Tools • Aggregation • Multiplexing • Protection • Distance • Fault sectionalization • End-to-end QoS Functions Implementation Toolkit • Ethernet • SONET/SDH • C/DWDM • RPR • xSTP • MPLS fast reroute • PWE3 • Provider Bridging • MAC Encapsulations • Combinations Physical layers ProtectionOptions Encapsulation Options

8. Ethernet over SONET Enablers STS/VT Cross-Connect Matrix PHY PHY PHY PHY Native TDM Ports Virtual Concatenation (ITU-T G.707) Aggregates SONET/SDH tributaries to create variable bandwidth pipes & overcome granularity concerns… Link Capacity Adjustment Scheme (ITU-T G.7042) Enables load-sharing, soft-protection and in-service hitless resize of TDM pipes Virtual Concatenation/ LCAS Generic Framing Procedure (ITU-T G.7041) Adapts the IEEE 802.3 PHY to the octet synchronous SONET/SDH payload… GFP Encapsulation/Framing Integrated Packet Switching Fabric Native IEEE802.1 Ethernet switching, with native QoS and provider tagging support Native PHYs Incorporates native data PHYs (e.g., Ethernet/IEEE 802.3, FC, FICON, etc.) as a client service interface Native Data Ports

9. Ethernet Transport Technology Evolution VT1.5 STS-1 PacketServices STS-1 VT1.5 Next GenerationFabric TDM Fabric SONET PHY SONET PHY Packet Transport ADM Packet Services STS-1VT1.5 TDMFabric SONET PHY MSPP TDM TDM + Packet Packet + TDM • Distributed DXC • Mapping of Packet services to circuits • Limited Statistical multiplexing • Optimized for packet multiplexing • Mapping of circuitsover packets • Traditionalsynchronization • Add/Drop circuits • No support forpacket services

10. Characteristics and Motivations

11. Service Provider Business Challenges Challenge: Service Providers need flexible and cost-effective transport solutions to grow their product portfolio through new, profitable and growing Ethernet-oriented services Increase Revenue through more flexible service ⇧ Lower revenue per MB offset by customers ability to scale in non-TDM increments Build High-Margin Revenue Streamswith New Applications ⇧ Build New Revenue Streams $$Optimize Incremental Investments • Solution:Address Service Provider profit and growth challenges by leveraging their embedded networks to deliver new Ethernet-oriented access, aggregation and transport services

12. First Step: Upgrade Existing Network Traditional SDH/SONET Switch Matrix Ethernet / MPLS Switch GFP Mapper / Framer VCAT / LCAS Reuses Carrier Class Features of SONET/SDH Evolutionary path to All-IP networks Introduce Ethernet Line cards in existing SONET/SDH equipment micro MSPP MSPP MSTP SDH Regional / Backbone Ring SDH Access Ring SDH Metro Ring IP/ MPLS FTTX DSL IP/ MPLS DWDM Network

13. Reliability, Price and Network CoverageTop Service Provider Selection Criteria What were your top three reasons for choosing your WAN Ethernet provider(s) over other service providers? • Enterprises value service assurance and reliability Reasons for Selecting WAN Ethernet Provider 50 • Especially for smaller companies 40 30 % of Respondents 20 10 • Larger companies emphasize coverage, SLAs and security. 0 Service Price Network Assurance and Coverage Reliability Base: Current users only Source: Yankee Group 2005 Metro Ethernet Survey (US)

14. Service Assurance and Reliability • Business services, wholesale services and Triple-Play residential services require service assurance • Connection-oriented frame delivery • Key “Carrier” features of SONET/SDH reused • Guaranteed 50ms switching • Guaranteed packet delivery and latency performance • Value of SONET brand to enterprise and wholesale customers • Leverage pseudowire/MPLS encapsulation to transport Ethernet over any Physical Layer

15. Example: Service Protection - Options

16. Economic Power of Ethernet Transport • Leverage the significant investment in SONET/SDH networks • Ca. $200 billion! • Rapid introduction of revenue-generating Ethernet services on existing SONET infrastructure • Ethernet functions can be added piecemeal by introducing new port units on existing equipment • Next Gen SONET/SDH provides evolutionary path to all-IP network • Smooth network evolution to accommodate data traffic with native LAN interfaces • Low initial investment with scalability

17. Improving Network Coverage • Ethernet transport lowers the cost of access to a switched network/service • Avoids expensive overlay networks and improves utilization • Single box per site / Single fiber with high fill factor • Increases core network scalability and responsiveness • Highly manageable and scalable • Easy replication for video • Supports simultaneous mix of data and circuit based traffic • No need to predict traffic patterns and balance between data and circuit based traffic • Flexible, reliable and efficient transport of data traffic • Ethernet directly over SONET, optional L2 switching

18. Key Network Applications Ethernet services delivery Ethernet infrastructure

19. Choice and Flexibility • Q: What is the “right” infrastructure for services delivery? • A: It depends! • In some cases, overlay networks make sense • In others re-use of existing networks is more effective • Service Providers and Equipment Vendors need the flexibility to support all situations (infrastructure, architecture, technology etc.) • Ethernet Services can be provided over a variety of network technologies to suit the need

20. Multi-region, Multi-technology • For multi-region networks, can’t always choose infrastructure - re-use of existing Region 1 (leased access) Business Connectivity over E-LINE Triple-Play Services over E-LAN micro MSPP MSPP MSTP SDH Regional / Backbone Ring SDH Access Ring SDH Metro Ring IP/ MPLS FTTX DSL IP/ MPLS DWDM Network Ethernet/RPR Ring FTTX DSL Carrier Ethernet Switch Region 2 (own network)

21. Ethernet Over WDM • Tariff Wavelength Services • Customer Premises to Central Office • Customer Premises to Customer Premises over Multi-Ring • Private Networks • SAN/Storage Extension • LAN Extension • Disaster Recovery and Business Continuity • Client-Server Architectures • Benefits • Point-to-Point and Ring Topologies • Protected and Unprotected Services • Choice of Protocol Specific and Transparent Interfaces • Aggregation of Client Interfaces on a Single Wavelength Customer Premises Aggregation Customer Premises Service Features Protection Aggregation Transparency Metro Handoff or Service Termination C/DWDM GbE SONET Central Office Customer Premises Data Center, SAN, and IP Connectivity Access GbE Fibre Channel FICON ESCON C/DWDM Storage Servers IP Hub Data Center Mainframe/Server IP Hub

22. Ethernet Over SONET for Wireless Backhaul • Requirements • Tight latency, low packet loss, survivability MPLS-enabled switched Ethernet Ethernet over SONET MTSO MTSO SONET SONET SONET Carrier Hotel SLA? TDM support?  SLA ! TDM support! 

23. Access to Switched Services Fiber / OE Access • Limited / no resilience • Limited reach • High fiber consumption • Overlaid equipment at customer premises • But cheap for branches / certain verticals! Eth Network • SONET-branded access service • Increased reach • Best fiber utilization • Single multiservice mux at customer premises • Robust operations Resilient High bandwidth Multiservice Eth Network SONET SONET SONET Eth SONET HQ Locations Eth Access Transport

24. Core Transport Improves Scalability, QoS and Reliability Normalized Single Ring Transport Cost (5 node ring example) 4.0 ROADM 3.0 Raw Fiber Normalized cost 2.0 Passive WDM 1.0 0.0 1.2 1.6 2.4 3.2 5.2 Amount of Unicast (VoD) Bandwidth (Gb/s) per VSO • Optical bypass reduces network costs • Network scaling with transport • QoS is improved • Vastly reduced fibering • Truck rolls at endpoints only Video Head End / Hub Ofice VSO ROADM ROADM GE GE GE GE VSO ROADM $1000’s Routing ROADM ROADM VSO Transit Costs ROADM $100’s VSO Switching Transport

25. Telco Video Example VOD Server Telephony Internet • 10-Gig Packet ADM rings connecting collocation sites with Metro node over WDM • Triple-play – VPLS-over-RPR carries end users’ triple-play traffic • 3G Backhaul - Metro rings also carry 3G wireless traffic from base stations to Metro Node • Business Ethernet - Metro rings also carry Ethernet services (VPL/DIA)from office buildings BSC Metro Node CO WDM ROADM WDM ROADM MPLS/RPR/OC192c Eth WDM ROADM Eth WDM ROADM BSC

26. Summary • Ethernet transport is a key enabler for Ethernet (& IP) services • Uniquely meets most stringent service requirements • Improve service coverage and time to market • Accommodates today’s transport infrastructure and enables future migration • Key applications in • Residential triple play backbones • Wireless access/backhaul • Data center networking • Resilient access to switched/routed data services networks

27. Accelerating Worldwide Adoption of Carrier-class Ethernet Networks and Services