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Broadband Bringing Home the Bits (2002) / Chapter Skim
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4 Technology Options and Economic Factors
Pages 120-166

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From page 120...
... Local access links carry communications to and from points at which communications from multiple premises are aggregated and funneled onto higher-capacity links that ultimately connect to the Internet or other broadband services. The first point of aggregation, also known as the point of presence, is most commonly located at a telephone company central office, cable system head end, or radio tower (which may be at a considerable distance from the premises)
From page 121...
... As a result, the technological approach chosen by an incumbent is likely to make use of existing equipment and plant, and the deployment strategy must be amenable to incremental upgrades. The infrastructures of the various incumbents in the broadband marketplace telephone local exchange carriers with copper loops, cable television companies with coaxial cable, cellular companies with towers for point-to-point wireless telephony will continue to make incremental improvements unique to their respective technologies to provide and enhance broadband services.
From page 122...
... Wireline includes telephone network copper pairs and the coaxial cable used for cable television service. Incumbent telephone companies and cable operators are both in the process of upgrading their infrastructures to provide broadband services.
From page 123...
... By using fiber instead of coax to feed into neighborhoods, the system's performance and reliability is significantly improved. Another benefit of an HFC upgrade is that the resulting system can carry two-way data communications, such as Internet access.
From page 124...
... 124 (a) Tree and Branch Architecture ...........
From page 125...
... The DSLAM must in turn be connected to a switched data network that ultimately connects the central office to the Internet (see Figure 4.3~. DSL service enables the transmission of packet-switched traffic over the twisted copper pairs at much higher speeds than a dial-up Internet access service can offer.
From page 126...
... FIGURE 4.2 Telephone company copper loop plant. SOURCE: Adapted from a figure supplied by John Cioffi, Stanford University.
From page 127...
... Certain pairs are unsuited for such upgrades because of how they were engineered for example, using bridge taps or loading coils. Also, where the loop between central office and premises includes a digital loop carrier, the remote terminal equipment must be upgraded to Internet Service Providers _ <> .
From page 128...
... . It should be noted that wire lengths are substantially shortened by the deployment of remote terminals.
From page 129...
... Advanced Wireline Offerings Fiber Optics in the Loop Optical fiber has a theoretical capacity of about 25,000 GHz, compared to the roughly 155 megahertz (MHz) possible over short copper pairs, the roughly 10 GHz4 capacity of coaxial cable.
From page 130...
... Because of their large demand for bandwidth, an increasing fraction of large businesses is being served directly by fiber links. There is also increasing attention to fiber technologies for local area and local access networks, as evidenced by recent development of new technologies such as gigabit Ethernet over fiber.
From page 131...
... FTTC is also a label for a specific class of technology that makes extensive use of fiber for local distribution and that local exchange carriers are using to build or rebuild their telecommunications. A technology being used in new construction today, it will in turn be a basis for incremental upgrades of the telephone infrastructure in the future.
From page 132...
... elements in the pathfrom the central office to the residence, in which fiber runs from the central office to one or more stages of remote terminals at which the signals are switched among fibers that go on to feed individual premises. Two examples of this approach are switched Ethernet and HFC using active switching.
From page 133...
... Areas being newly developed (socalled green-field areas) offer an especially attractive market for fiber, to the extent that the additional costs are modest compared with the basic installation costs of any local access technology.
From page 134...
... There have been significant improvements in the cost and performance of fiber distribution technology over the last few years as a result of technical advances and increased deployments in gigabit Ethernet, wavelength division multiplexing (WDM) , passive optical networks, and optical switching, but there is still a good bit of room for cost improvements in terminal equipment, splicing, and trenching.
From page 135...
... Several experiments have been conducted9 and proposals have also been made to develop both national and international standards for powerline communications technology. There has been less of a push to use powerline connectivity in the United States, in part because the U.S.
From page 136...
... Similarly, the DSL industry has a roadmap for performance improvements that depends on redesign of the access network to install remote electronics in order to shorten the length of the copper pairs. In both cases, the technologies are relatively mature, so the rate of actual as opposed to potential performance improvement will depend mainly on 1OFor more on powerline communications technology, see David Essex, 2000, "Are Powerline Nets Finally Ready?
From page 137...
... In rough terms, the HFC infrastructure is capable of offering the consumer a factor-of-10 improvement over the next 5 years by decreasing the number of homes in each cluster and/or increasing the capacity allocated to data services at relatively low incremental cost. The total capacity of a coaxial cable segment, including both the entertainment TV and data segments, is several gigabits per second.
From page 138...
... From today's vantage point, it would be accompanied by the costs and complications associated with deploying fiber to the home. While one can confidently predict that fiber will increasingly be found deeper and deeper within access networks, and can foresee that fiber will reach an increasing number of households, it is difficult to predict how fast this will happen.
From page 139...
... Fixed Terrestrial Wireless In contrast to mobile services, fixed wireless services provide connectivity from a base station to a stationary point, such as a home.l2 Perpassing costs are more favorable, especially because the cell size can be made large initially, and then decreased as subscription rates increase. As a result, fixed wireless will be an attractive option for providers that do Connectivity may be either to a single gateway within the home (which in turn is connected through a home network to computers within the home)
From page 140...
... MMDS, which uses spectrum in 2.1- and 2.5- to 2.7- GHz bands, was traditionally used to provide so-called wireless cable video services, especially educational/instructional programming; but a rule change by the FCC in 1998 opened the door to two-way data service delivery over MMDS frequencies, and the channels have been made available to wireless providers for broadband services.l3 LMDS, which offers very high data rates but has more limited range and requires more expensive equipment, is used primarily for highspeed business services. The longer range and lower frequencies of MMDS reduce both infrastructure and customer terminal costs, making it suitable for competing with DSL and cable in the residential market.
From page 141...
... As of 2001, there are several venture-funded companies (e.g., Iospan Wireless, BeamReach, and IPWireless using radio frequency transmissions, and Terabeam using free space laser transmissions) developing broadband wireless Internet access technologies, and some of these activities may lead to significantly improved cost and performance for fixed wireless.
From page 142...
... with the more traditional DSL/cable/ fiber/fixed wireless solutions.~4 This scenario becomes of particular interest if a large base of users comes to value mobile devices. Mobile Wireless While fixed wireless is an important near-term broadband access alternative, it is generally agreed that over time, wireless technologies and resee, for example, David Leeper, "A Long-term view of Short-Range Wireless,,, 2001, IEEE Computer, June, pp.
From page 143...
... However, given that 3G chipsets will be available in the mass market within 1 to 2 years, there are efforts underway to leverage its wideband CDMA core technology to provide several-megabit fixed wireless access as well. There are also interim "2.5G" solutions, going by the names EDGE, GPRS, and HDR, which provide packet data services at moderate bit-rates (~10 to 100 kbps per user)
From page 144...
... There is the potential for rapid growth owing to the lower capital investment requirements; the ability to target service to urban areas, airports, and the like and to expand as needed; and the absence of spectrum licensing costs. Satellite Broadband local access via satellite provides another wireless alternative.
From page 145...
... LEO satellite deployment for broadband data services requires the solution of additional difficult technical problems, such as antennas that can track a moving satellite at a price point suited for a consumer. However, the feasibility of LEO satellites for mass-market broadband access is constrained more by economic considerations than the technology challenges.
From page 146...
... The total spectrum available for broadband services is limited by the amount of spectrum suitable for broadband. Moore's law decreases in the cost of processing power that can be inserted into broadband transceivers permit This economic challenge has been seen in the case of satellite voice services, where terrestrial cellular voice service, which is much cheaper and requires much smaller handsets, was deployed on a more widespread basis than was contemplated when the initial Iridium business plans were formulated.
From page 147...
... that in the long term are likely to account for the majority of end-user devices, in contrast to the fast-growing minority that they represent today. Once fatherless computing devices become ubiqitous, today's PC-centric broadband access network (HFC, DSL, and so on)
From page 148...
... In that context, it is worth noting that there are significant challenges associated with delivering true broadband services, as defined in this report, to mobile devices. For example, a 5-MHz chunk of 3G spectrum can support only about 10 simultaneous broadband users per cell, a number that has to increase by orders of magnitude to make the service viable beyond narrowband uses.
From page 149...
... LAYERING AND UNBUNDLING This chapter devotes considerable attention above to the characteristics of different technology options for broadband access. But consumers do not normally care about the communications technology for its own sake; they care about the services that can be delivered over it Internet applications (Web, audio, video)
From page 150...
... Physical-layer unbundling may also impair the ultimate performance of the copper plant. While it holds true for voice signals, the assumption that copper loops are fully separable is not correct for high-speed data transmission using DSL because of crosstalk among wires within the telephone plant.
From page 151...
... Then the copper pair terminates at a remote terminal, which may be a curbside pedestal or even a small box on a telephone pole. Issues raised in this context include these: · Unbundling at remote terminals is problematical because of space limitations and because the relatively small number of subscriber lines terminated at each remote terminal make coloration and interconnection (linking the copper loop to the competitor's network)
From page 152...
... While the motivation of incumbents is certainly a matter of speculation and debate, it is often suggested that one reason incumbents have favored the lower-speed, asymmetric DSL technology is that symmetrical high-speed DSL service for business customers could undercut profits on more expensive T1 data service. Incumbents might also select a transmission technology that accommodates the typical copper loop but which may not be optimal for subscribers with longer loops.
From page 153...
... Each particular circumstance will involve its own set of cost trade-offs, however. For instance, because installing remote terminal equipment imposes substantial costs, home-run fiber to the premises could turn out to be cheaper than a fiber-to-the-cabinet strategy in some rural cases.
From page 154...
... More generally, when the market is split among multiple providers, some cost and revenue models for residential broadband become unprofitable. This also amplifies the advantages held by a provider that can make incremental upgrades to existing wireline infrastructure (the advantage depends on the cost of any required upgrades)
From page 155...
... Because broadband is a service capable of supporting each of these types of services and many new ones as well, there are potentially many different options for cost sharing. Figure 4.5 depicts a cluster of other players that surround the consumer and broadband infrastructure builder.
From page 156...
... / = At/ ( Consumers ,~ ~ ~ Owners, ) I, / I\\// ~ Government J TV Focus on the Consumer ,,~ ,,,.' ,~, Infrastructure ~ Builders/ J The factors discussed in the previous section notwithstanding, the consumer is the pivot around which all of the economic issues swing.
From page 157...
... From this revenue base a business must be constructed. If 100 million homes were to purchase broadband service at $50 per month, this would result in total annual revenues to broadband Internet providers of more than $50 billion, which is similar in magnitude to current consumer expenditures on long-distance services.
From page 158...
... The investment rate also depends critically on the perspective and time horizon of the would-be investor. For an owner of existing facilities the incumbent local exchange carriers and cable multiple system
From page 159...
... Two types of nonincumbent investor have also entered the broadband market, tapping into venture capital that seeks significant returnsand generally seeks a faster investment pace. One is the competitive local exchange carrier, which obtains access to incumbent local exchange carrier facilities primarily coloration space in central offices and the copper loops that run from the central office to the subscriber to provide broadband using DSL.
From page 160...
... In rough figures, a modest upgrade that costs $200 per passing would cost $20 billion to reach all of the approximately 100 million homes in the United States. Broadband deployment to households is an extremely expensive transformation of the telecommunications industry, second only to the total investment in long-haul fiber in recent years.
From page 161...
... The previous generation of one-way cable systems is in the process of being upgraded to hybrid fiber coax systems, and these in turn are being upgraded to provide two-way capability, greater downstream capacity, and packet transport capabilities. The various incumbents now in the broadband marketplace have very different technology and business pasts the telecommunications providers selling voice service over copper, the cable television companies using coaxial cable to deliver video, the cellular companies constructing towers for point-to-point wireless telephony, and so forth, and each will evolve to support broadband by making incremental improvements to its respective technologies and infrastructure.
From page 162...
... Upgrades are not, however, fully independent as they depend on the backhaul infrastructure. An upgrade will require not only new central office or remote terminal line cards, but also a compatible infrastructure beyond that; the remote terminal or central office rack itself may not be able to switch or route a higher-speed input due to hardware or software constraints.
From page 163...
... This committee spent some time exploring why broadband local access has not kept pace with other areas in computing and communications, and it considered how the economics of broadband service providers, long-haul communications providers, and computer equipment vendors might differ. In the end, the committee concluded that present understanding is too limited to reach definitive conclusions on this question.
From page 164...
... Since most Internet traffic is very bursty transmissions are not continuous but come in bursts, as for example when a Web page is fetched a shared communications path means that one can use the total unused capacity of the shared link to transfer the burst, which may make it happen faster. In this respect, the Internet is quite different from the telephone system.
From page 165...
... For example, the dominant local area network standard, Ethernet, which is a shared technology with some of the same features as HFC cable modems, has proved very popular in the market, even though it, too, can become congested if too many people are connected and using it at once. Cable systems have the technical means to control congestion.
From page 166...
... For example, if it takes 10,000 active users to achieve good smoothing on the path from the rest of the Internet, then a provider who gets 10 percent of the market,~9 and who can expect half of his users to be active in a busy hour, needs a total population of 200,000 households as a market base in a particular region. Even if the broadband local access links themselves are adequately provisioned, bottlenecks may still exist, owing to such factors as peering problems between the broadband service provider and the rest of the Internet, host loading, or other factors.


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