The new faces of local access

Telecommunications Americas, July-August, 2004 by Michael Kennedy

Until six months ago, the likely direction and shape of local access networks seemed reasonably clear and none too exciting. That is no longer the case. It appeared that cable TV operators and incumbent telephone companies would continue to position broadband Internet access as a premium service aimed at a minority of power-user consumers and small and medium enterprises using cable and DSL modems. Competition appeared unlikely due to daunting entry costs, regulatory barriers and, in the case of electric utilities, more theory than fact. New technology and changing business strategies have turned the incumbents' comfortable assumptions on their heads.

Wi-Fi acceptance has done much to disrupt access network evolution directions. It has quickly become the preferred interface for laptop PC users when traveling and at home. Coincident with this movement enterprise system vendors have made Wi-Fi based WLAN products strategic to their enterprise sales campaigns. WLAN technology innovations are enabling Wi-Fi coverage that goes beyond the hot-spot model. Companies such as Tropos and Amperion are developing products that deliver metro area Wi-Fi services.

Optical IP/Ethernet-based access systems are bringing new cost points and improved service delivery capabilities to FTTP (fiber to the premises) solutions. Active optical network architectures are particularly attractive because they can support tens of thousands of Layer 2 IP flows between service providers and individual end user devices. This architecture, whether configured as a metro Ethernet, residential FTTP, or broadband digital loop carrier supports very low cost points; projected cost is $750/home passed for all electronics. The ability to provision tens of thousands of IP flows dynamically provides the capability to open the network entirely. For example, each video program on each subscriber's TV could be custom sourced from a different content provider--no broadcast network or cable distribution network would be required to bundle programming and no subscription service would be needed. This capability is particularly attractive to telephone companies and municipally funded FTTP projects as it gives them the ability to deliver content-independent services. There is no need to affiliate with content providers or even play a role in content selection. This can be left to the content provider and the end user. Products coming to market this year using this technology can deliver open 100-Mbps symmetrical services envisioned by the High Tech Broadband Coalition.

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BPL (broadband power line) carriers may be the most surprising wildcard. While many people, including myself, wrote this technology off in the mid-nineties, it has now emerged as the most cost-effective vehicle for deploying broadband access services. Initial capital expenditures are about 4 percent of the cost of a greenfield FTTP deployment. For 2004, bandwidth capabilities are about 40 Mbps for a shared symmetrical service--200 Mbps should be available in three years. 40-Mbps service is roughly the same as the DOCSIS 2.0 standard to be deployed this year by the cable TV industry. CPE connections can be made with low cost HomePlug devices or in some products with light pole-mounted Wi-Fi access points.

Carrier-class VoIP is the final disruptive technology. VoIP, while available for quite some time, has now achieved legitimacy. Being a particular type of IP flow, VoIP delivers openness that gives users greater choice of voice service providers. VoIP permits delivery of voice services over any of the access technologies discussed above. This gives users many more degrees of freedom in solving their particular access network problem and removes voice as a proprietary lever for incumbent telephone companies in the same way that IP video does to cable TV operators.

Finally, one access network design issue is clear. Telephone companies, cable TV companies, electric power utilities and municipalities are converging on designs that extend high-capacity optical backhaul services much closer to customers. Telephone companies are deploying next-gen digital loop carrier systems as remote terminals that employ optical backhaul to their COs. Cable TV operators are moving the fiber-to-coax junction closer to customers as a means of increasing end user bandwidth while the active optical network design places an Ethernet switch near customers. BPL designs run optical back haul to each distribution substation and then use BPL over the medium voltage power lines; distribution substations are typically quite a bit closer to customers than telephone company COs or cable TV head-ends. Wi-Fi based systems, also, rely on optical fiber for backhaul. This positions all these operators to extend fiber closer to customers as service needs require.

These recent technology break-throughs diminish the advantage that incumbents have though ownership of existing facilities. This lowers barriers to entry and increases the chance that access networks will evolve in response to competition rather than regulatory, legal and legislative actions.