All Services on a Single Wire? - Technology Information

Telecommunications, Sept, 2000 by David S. Stehlin

Lower equipment and operations costs plus in creased revenues make single-wire infrastructure a compelling case for providers and MDUs.

Service providers are expected to deliver local services over any medium. If the provider delivers local or last-mile solutions that are effective for end users--and property owners, in the case of MDUs (multi-dwelling units)--customers are not concerned about which new or existing infrastructures are used. Despite customer neutrality, the service provider preparing to offer converged services still faces several difficult decisions, including:

* What infrastructure will work best: fiber, coax or twisted pair?

* What topology should be developed: star, bus, HFC (hybrid fiber coax), FTTC (fiber to the curb) or FTTH (fiber to the home)? The answer, in part, depends on whether this is a greenfield development or retrofit project.

* What services should be offered when?

* How can a quality signal be delivered cost effectively and efficiently over the troublesome last mile, from the head-end to the subscriber?

* In a densely populated area such as a large MDU development, how can services be distributed simply and affordably?

* How can video on demand, DBS (direct broadcast satellite), CATV (cable television) or SMATV (satellite master antenna television) signals be offered?

The MDU Opportunity

In the ever-tightening cycle of bandwidth demand, convergence delivered over a single wire benefits all involved parties, especially the MDU property owner. Studies indicate that MDU tenants would prefer to receive all their communications services from a single, integrated system operator. According to the Yankee Group, only 5 percent of the 20 million MDUs in the United States with five or more units are served by an integrated provider.

A single-wire infrastructure offers the MDU owner potentially higher occupancy rates and the ability to provide the services tenants want most. The right infrastructure also helps the building owner protect the property's value. The MDU owner will respond best to an infrastructure that can support new communications services without requiring forklift upgrades.

A third benefit is more potential income under a revenue-sharing agreement with the service provider. Imagine that the property owner receives $7 a month from the system operator for each tenant who subscribes to basic cable service. By utilizing a single-wire convergence infrastructure, the operator adds DBS service and high-speed Internet access to its offerings. The customer who now pays $30 a month for video service might be willing to pay an additional $30 for access speeds of 10 Mbps. As subscriber rates increase, so will the property owner's revenue-sharing income.

Benefit for Providers

A convergence solution that uses a single-wire infrastructure has compelling advantages for the service provider as well. First, the system operator can cut costs by combining separate NOCs (network operations centers): twisted pair for telephony, fiber or copper for data, and coax for video. For example, the MSO that offers cable modem service in an MDU property typically dispatches two technicians to activate each new subscriber. The RF (radio frequency) technician knows the cable plant's technology, while the second technician installs the NIC (network interface card) and other equipment on the tenant's computer. A typical truck roll costs the provider $150 just to get out the door, not including the technicians' time at the job site. Cable truck roll costs are comparable.

In comparison, some of the single-wire infrastructures on the market facilitate remote service provisioning. Truck rolls are no longer required to activate tenants or change a resident's service. A video customer who wants to add data can be provisioned remotely, just as a new subscriber can be. This kind of single-wire infrastructure benefit allows the service provider to prewire the entire neighborhood, whether it is a greenfield or existing development.

Prewiring also gives the provider an attractive way to promote new services. The operator can offer high-speed Internet access or another service for a limited time without having to install expensive equipment. With prewiring, the provider can remotely terminate the service at the end of the promotion. A second benefit is lower equipment costs. One such infrastructure now on the market eliminates the need to install cable or DSL modems in each apartment or house in a neighborhood. This solution instead equips each housing unit with an Ethernet or universal serial bus (USB) adapter that costs an average of $25, compared to the typical tenfold cost of a cable or DSL modem.

A single-wire infrastructure also helps the operator increase revenues by offering more than one service from the same platform (see Figure 1). The provider now receives more income per subscriber, without making any infrastructure upgrades. Selecting the right single-wire infrastructure nets the provider the following benefits:

* Reduced churn;