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Broadband to the User: US Market Development and Options

Broadband to the User: US Market Development and Options. Lisbon February 13, 2003. Fiber Network Architecture. Fiber to the Home (FTTH). “Home Run” Separate fiber to each home from Head End or Central Office Pros: Ultimate performance Highest flexibility

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Broadband to the User: US Market Development and Options

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  1. Broadband to the User:US Market Development and Options Lisbon February 13, 2003

  2. Fiber Network Architecture

  3. Fiber to the Home (FTTH) • “Home Run” • Separate fiber to each home from Head End or Central Office • Pros: • Ultimate performance • Highest flexibility • Minimal interoperability and upgradeability issues • Cons: • Extremely high cost • Incremental build-out expensive as well • “Active Star” • Fiber runs from Head End to remote hubs with switching equipment • Pros: • High performance • Diversity of services • Cons: • High equipment costs • Reliability issues: need for power at every remote • Aesthetics, real estate for remotes • Passive Optical Network (“PON”) • Single fiber runs from Head End to hubs with passive optical splitters • Pros: • Lowest life-cycle costs • Simplest design, minimal need for field electronics • Highest reliability • Cons: • Requires simultaneous upgrade of remotes and Head End • Shared resource: bottlenecks upstream, signal compatibility • Gigabit Ethernet (“GigE”) • Giga Bit Ethernet is a technology which uses “distributed” routers allowing direct 110 Base T or higher connections to the home. • Pros: • Simple Interface • High Data Rate • Cons: • Shared local connection • Increases complexity and management

  4. Comparison of Internet Access Large Enterprise SME SOHO Residential 56 Kbps Data Dial-Up DSL 500 Kbps Cable Modem 1 Mbps LMDS Fixed Wireless Low Res. Video 5 Mbps Fiber to the Home High Res. Video, Digital Services 100 Mbps

  5. Hub SH Fiber Backbone Ring 1 Ring 2 Ring 3 Head End Ring N

  6. Technology and Cost Comparisons

  7. Broadband Options • FTTH – PON • FTTH – Gigabit Ethernet • HFC • Wireless – LMDS, 802.11 • DSL • Cable Modems

  8. Technical Issues

  9. Protocol Layers

  10. TCP/IP vs OSI

  11. Service Adaptation IP IP L3 PPP L2 WAN 802.N Campus ATM Frame Relay Sonet L1 F-T1 DS1 DS3 OC3 - OCn Network Convergence

  12. IP

  13. TCP

  14. TCP and IP and ATM Headers Data TCP IP ATM

  15. ATM Flow Control VPI VCI Payload Type Header Error Control Information Fields 48 Octets Or 384 bits

  16. Ethernet MAC Frame 802.3 Error Check Preamble Start Frame Destination Source Data Pad Length 56 bits 8 bits 16 bits 16 bits

  17. Architecture Elements

  18. Ethernet Layer 2, 3 and ATM Headend Transport Home ATM Router ATM Switch Layer 2 ATM Switch Router IP Address Router TCP/IP Router Layer 2 Switch Layer 2

  19. Passive Optical Splitter Passive Optical Splitter Passive Optical Splitter 622 Mbps down 155 Mbps Up TDM Down TDMA Up Max 10 Mbps Shared ATM Switch Rates of OC 3, OC 48, OC 96, OC 192 Fiber Rates ATM v GigE ATM

  20. SS7 TRANSIT EXCHANGE TE LE TE LE SETUP IAM IAM SETUP CALPRO ALERT ACM ACM CONNECT ANM ALERT ANM CONNECT DISC REL REL RLC DISC REL RLC REL RELC RELC Q.931 SS7 Q.931

  21. SS7 TRANSIT EXCHANGE TE LE TE LE SETUP IAM IAM SETUP CALPRO ALERT ACM ACM CONNECT ANM ALERT ANM CONNECT DISC REL REL RLC DISC REL RLC REL RELC RELC Q.931 SS7 Q.931

  22. SS7 TRANSIT EXCHANGE TE LE TE LE SETUP IAM IAM SETUP CALPRO Application Application ALERT ACM Presentation Presentation ACM CONNECT Session Session ANM ALERT ANM TCP TCP CONNECT IP IP IP IP DISC LLC/MAC LLC/MAC LLC/MAC LLC/MAC REL Physical Physical Physical Physical REL RLC DISC REL RLC REL RELC RELC Q.931 SS7 Q.931 Telco Network IP Network

  23. Application Application Application Application Presentation Presentation Presentation Presentation Session Session Session Session Transport Transport Transport Transport Network Network Network Network Data link Data link Data link Data link Physical Physical Physical Physical

  24. Application Application Presentation Presentation Session Session TCP TCP IP IP IP IP LLC/MAC LLC/MAC LLC/MAC LLC/MAC Physical Physical Physical Physical

  25. Application Application Presentation Presentation Session Session TCP TCP IP IP IP IP LLC/MAC LLC/MAC LLC/MAC LLC/MAC Physical Physical Physical Physical

  26. SS7 TRANSIT EXCHANGE SS7 TRANSIT EXCHANGE SS7 TRANSIT EXCHANGE SS7 TRANSIT EXCHANGE TE TE TE TE LE LE LE LE TE TE TE TE LE LE LE LE SETUP SETUP SETUP SETUP IAM IAM IAM IAM IAM IAM IAM IAM SETUP SETUP SETUP SETUP CALPRO CALPRO CALPRO CALPRO Application Application Application Application ALERT ALERT ALERT ALERT Presentation Presentation Presentation Presentation ACM ACM ACM ACM ACM ACM ACM ACM CONNECT CONNECT CONNECT CONNECT Session Session Session Session ANM ANM ANM ANM ALERT ALERT ALERT ALERT TCP TCP TCP TCP ANM ANM ANM ANM CONNECT CONNECT CONNECT CONNECT IP IP IP IP IP IP IP IP Telco Network Telco Network LLC/MAC LLC/MAC LLC/MAC LLC/MAC LLC/MAC LLC/MAC LLC/MAC LLC/MAC DISC DISC DISC DISC Physical Physical Physical Physical Physical Physical Physical Physical REL REL REL REL REL REL REL REL RLC RLC RLC RLC DISC DISC DISC DISC IP Network REL REL REL REL RLC RLC RLC RLC REL REL REL REL RELC RELC RELC RELC RELC RELC RELC RELC Q.931 Q.931 Q.931 Q.931 SS7 SS7 SS7 SS7 Q.931 Q.931 Q.931 Q.931

  27. PON Passive Optical Networks

  28. PON Options • APON – ATM based PON • EPON – Ethernet based PON

  29. Multiple ways of implementing PON APON - ATM PON first commercial product, used primarily for business applications BPON - Broadband PON expanded version of APON with added functionality to support robust video services EPON - Ethernet PON PON using Ethernet for packet data - still evolving GPON - GigaPON evolving PON technology at gigabit rates Proprietary PON long term viability and support issues Alcatel uses BPON in 7340 FTTU Flavors of PON: A / B / E / G / P

  30. 7340 FTTU System Elements Network Central Office or Fiber NID Home Network Remote Terminal Distribution 7340 AMS 7340 P-OLT • 7340 H-ONT (Home Optical Network Terminal) - customer interfaces • 7340 P-OLT (Packet Optical Line Terminal) - network interface for PONs • 7340 V-OLT (Video Optical Line Terminal) - video distribution across PON • 7340 AMS (Access Management System) - element management Voice Data 7340 H-ONT 7340 V-OLT Video

  31. 7340 BPON Technology Voice, data and video (bidirectonal) for 32 subscribers over a single fiber Coarse WDM supports three wavelengths — 1,490/1,310/1,550 nm 622/155 Mb/s packet rate via two wavelengths Dedicated wavelength for video — very high capacity (4 Gb/s Broadband Entertainment) 20 km (12.4 mi.) span Central Office or Remote Terminal FiberDistribution PassiveOutside Plant 20 km (12.4 mi.) 7340 AMS 7340 P-OLT Splitters 1,490 nm 622 Mb/s 1,310 nm 155 Mb/s 1,550 nm 7340 V-OLT TDMA Up in ATM Frames, TDM down in ATM Frames

  32. FTTU System Key Points Optical Network Terminator (ONT) Optimized for residential service Environmentally hardened Locally powered with battery backup Optical Line Terminator (OLT) Shares common components with the ASAM 7300 Supports residential and business services Architected for modularity, scalability and cost Low initial capital investment Partnering with best-in-class vendors for other elements Element Management FSAN/ITU standards compliant; Alcatel active participant 7340 H-ONT 7340 P-OLT

  33. FTTU Service View Supports bundled services — voice, data, video up to four POTS systems with lifeline support very high speed data (10/100Base-T or HPNA interfaces) video (Analog, Standard Definition Digital & High Definition) Flexible bandwidth use more than 20 Mb/s available per subscriber on average higher bursting rates possible supports service level agreements (SLAs) efficiently carries IP and MPEG payloads Supports service requirements of tomorrow easily accommodates emerging services ONT upgradeable via software for new services ONTs planned for several niche applications — SOHO, MDU, MSE, MTU POTS POTS POTS POTS O N T HPNA 10/100baseT CATV RJ11 RJ45 Coax UPS

  34. FTTH Network Solution: Central Office Home Tx 1490/ Rx 1310 nm WDM 7670 RSP / Omniswitch ATM Switch BAS Tx 1550nm 7340 P-OLT GR-303 /TR-08 Voice Gateway 7340 V-OLT Intranet/Internet Alcatel 6620 FTTU Fiber and components in outside plant 7340 H-ONT UPS Tx 1550nm 7340 AMS PSTN Class 5 Switch IP Video Return Video Storage VoD Server Video RF Mux Local TV Broadcast Video Optical Transmitter Satellite Broadcast Video Cable TV

  35. IP or ATM network Tx 1490 nm Rx 1310 nm Tx 1550 nm Tx 1490 / Rx 1310 nm 1:32 IP Return WDM Tx 1550nm V-OLT CATV Broadcast 75 Ohm Coax HPNA 2.0 or Ethernet 10/100 Base-T VoD PUMP Video Application Server Video Optical Tx VoD/XCATV/DBS Modulators Local TV Broadcast Satellite Tx 1550nm Broadcast Video Cable TV BPON 1550nm CATV Solution

  36. Tiered splitting strategy Minimize cost Allow flexibility for future with fiber rich last 1/2 mile 1:4 Primary Flexibility Point F1 OLT Final Drop Point 1:8 24 fiber Cable FP2 Over Build Connect as you add subscribers 96 Homes Passed 1-24 25-48 49-72 73-96 24 Greenfield 100% Homes passed are Connected FP3 FP4 FP5 FP6 24 FP7 24 FP8 24 FP9 24 FP10 24 FP11 24 FP12 24 24 24 1152 Total Homes Passed 24 FTTU Outside Plant Example 24 fiber Cable ~ 1 to 5 km 36 fiber Cable ~15 km

  37. APON Costs

  38. Gigabit Ethernet

  39. System Elements 317 Hub Remotes 4 1,000 BT 24 100 FX Pairs 317 Hub Remotes 4 1,000 BT 24 100 FX Pairs 317 Hub Remotes 4 1,000 BT 24 100 FX Pairs 410 Hub Concentrator 16 1,000 BT 317 Hub Remotes 4 1,000 BT 24 100 FX Pairs Cisco 12000 Router 3700 Headend 160 1,000 BT Carriers 317 Hub Remotes 4 1,000 BT 24 100 FX Pairs 317 Hub Remotes 4 1,000 BT 24 100 FX Pairs 317 Hub Remotes 4 1,000 BT 24 100 FX Pairs 410 Hub Concentrator 16 1,000 BT 317 Hub Remotes 4 1,000 BT 24 100 FX Pairs

  40. GigE Architecture Layer 1, 2 1 Gbps Backbone Remote Ethernet 100 Gbps Layer 2 Hub TCP/IP From Router Out: Layer 3 Remote Router Headend Remote Hub TCP/IP Layer 3, 4 Contains TCP and IP address Layer 2 Switch Ethernet to Backbone Layer 2

  41. Hub SH Fiber Backbone Ring 1 Ring 2 Ring 3 Head End Ring N

  42. GigE Costs

  43. Design Issues 317 Hub Remotes 4 1,000 BT 24 100 FX Pairs 317 Hub Remotes 4 1,000 BT 24 100 FX Pairs 317 Hub Remotes 4 1,000 BT 24 100 FX Pairs 410 Hub Concentrator 16 1,000 BT 317 Hub Remotes 4 1,000 BT 24 100 FX Pairs If low load per HH, then can set 15 HH 317 Per 410, and one 1 Gbps from 410 Back to 3700, with 1 Gbps on in and 1 Gbps on out. Cisco 12000 Router 3700 Headend 160 1,000 BT Carriers 317 Hub Remotes 4 1,000 BT 24 100 FX Pairs 317 Hub Remotes 4 1,000 BT 24 100 FX Pairs 317 Hub Remotes 4 1,000 BT 24 100 FX Pairs 410 Hub Concentrator 16 1,000 BT 317 Hub Remotes 4 1,000 BT 24 100 FX Pairs

  44. Capital Plant

  45. Per Sub Capital

  46. Cap per Sub Large

  47. Municipal Broadband

  48. What is Municipal Broadband? • Optical fiber network owned by municipality (Town / Utility) • Fiber connectivity to homes and commercial properties: 100 Mbps service, Fiber to the Home (FTTH) • Integration of school, fire, police, public safety, healthcare • Open access network allowing any service provider/ISP • Municipality provides “bit” backbone only; service provider owns end-users

  49. Concept of Municipal Broadband Network and Services ISP Integrator & Carrier Value Added Packager Municipal/Town Broadband Basic services would be basic ISP and valued added ISP based services to end user Added Services would be Video, VPNs, Voice Over IP and other advanced services.

  50. Opportunity Size • Have budgeted 15 municipalities under definitive contract in 2003; already have 8 with preliminary agreements • Anticipated over 300 towns by end of year 6, regional and national • Revenue goes to $100 million, NOI peaks at 61% • CCF requirements are $5 million, primarily for build out of NOCs and working capital, use of proceeds can be throttled by demand • Capital can be throttled on buildout

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