The Unpredictable Certainty Information Infrastructure Through 2000 (1996) / Chapter Skim
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5 TECHNOLOGY CHOICES: WHAT ARE THE PROVIDERS DEPLOYING?
5 TECHNOLOGY CHOICES: WHAT ARE THE PROVIDERS DEPLOYING?
Pages 161-196
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From page 161... ...
It also reviews the main infrastructure provider industries' announced plans for new deployment over the next several years, as revealed in white papers contributed as part of the NII 2000 project, comments at the workshop and forum, and trade and market-research publications. (Announced deployment plans, of course, are not necessarily firm commitments; they may change, as did those of many firms during the course of this project.
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From page 162... ...
wireline infrastructures for advanced services to the home being deployed by cable television and telephone companies; (4) on-line information services and Internet access; (5)
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From page 163... ...
It is not clear at this time what factors will drive telephone companies to lower prices, although competition from alternative access services (such as cable and wireless data) could lead to such an outcome.
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From page 164... ...
to called; call voice "always connect to the set up is telephony see on" e.g., network; rapid enough traditional enabling e-mail circuits are that operation analog voice delivery to the generally is effectively facilities user at any time) available when continuous if demanded either end can initiate the call Real-time multimedia access (full motion video)
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From page 165... ...
to 2 Mpbs (Teledesic gateway service) Symmetrical Depends on Depends on system system Yes Yes Moderate to high digital broadcast of lOOs of video channels; data broadcast currently at lOOs of kbps Upstream channel is through another medium, such as wireline or wireless telephony Some services require dial-in; others provide continuous operation Highestbandwidth wireless LANs can support multimedia; other wireless services cannot Some services require dial-in; others provide continuous operation No (exceptionhigher-capacity LEO satellites, such as those in the Teledesic system)
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From page 166... ...
Access lines connect end users at homes, businesses, and other locations to the telephone network; they constitute the portion of the network known as the local loop. Switches and interoffice trunk lines direct and carry communications across the network.
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From page 167... ...
, Infrastructure of the Local Operating Companies Aggregated to the Holding Company Level, presents a detailed view of recent deployment of infrastructure specifically lines and switches by the RBOCs and GTE (see Table 5.2~. Together, these firms account for over 90 percent of the nation's total access lines.
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From page 168... ...
ISDN basic rate interfaces equippedb ISDN primary rate interfaces equippedb Local loop copper terminations in central office (thousands) Local loop fiber terminations in central office (thousands)
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From page 169... ...
The level of investment needed to achieve this growth is uncertain; however, Personick's white paper estimates that deploying the switching capacity, line-termination equipment, and related systems in the central offices to meet demand for ISDN (and other, higher-capacity services) will represent a total investment on the part of LECs in the billions of dollars.
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From page 170... ...
notes that the bit rates achievable through a given fiber have grown from 405 Mbps in 1983 to 2.4 Gbps today, with an anticipated leap to 40 Gpbs by 2000, using wave-division multiplexing. The authors calculate that by 1996 or 1997 it should be possible for a fiber pair to carry over 600,000 voice circuits, eliminating concerns about bottlenecks in the long-distance portion of the telephone network "for the foreseeable future." In the local exchange, fiber is widely deployed between central offices; however, only a small fraction of total local-loop plant is fiber-based (see, for example, the white paper by Mahal Mohan)
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From page 171... ...
also discusses fiber deployment by competitive local exchange carriers (COMPLECs) , also known as competitive access providers.5 The report considers only facilities-based carriers, not capacity resellers.
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From page 172... ...
Demand for Telephone Services Telephone carriers finance a large proportion of their investments in infrastructure out of the revenues they receive for services. The FCC reports that toll service revenues of long-distance carriers totaled $61.5 billion in 1993.
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From page 173... ...
DATA COMMUNICATIONS Summary and Forecasts The business sector is making major investments in data communications. Within the decade, most employees who work in offices will have a PC attached to a corporate network, which will in turn be connected to the public switched network (e.g., through an Internet connection)
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From page 174... ...
. Some providers believe that ATM will be the dominant technology in the public switched network by the turn of the century, while others believe that frame-based services such as frame relay and Internet will provide an effective data communications infrastructure.
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From page 175... ...
Most data communications, however, travel over the telephone network by means of services that are also used for voice and cannot technically be distinguished as either voice or data from the carrier's point of view. For example, fax and modem data are encoded and transmitted as analog signals over analog voice circuits; digital circuits, such as ISDN and dedicated high-speed lines, frequently carry both voice and data.
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From page 176... ...
This figure includes revenues for the firms dedicated to Internet access, such as PSI, Netcom, and UUNet, as well as for the Internet services provided by LECs, IXCs and others. They are estimated to serve 1.2 million customers.
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From page 177... ...
. Business networking is leading not only to increased sales by carriers and third-party providers of data services such as frame relay and Internet access, but also to a rapidly growing investment in data communications infrastructure by business customers themselves.
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From page 178... ...
It seems reasonable to estimate that total corporate investment in data networking will exceed $10 billion per year. Telephone companies would receive only a small part of this spending and thus will continue to perceive explicit data services as having a smaller impact on their business than the economy-wide magnitude of investments in networking would seem to indicate.
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From page 179... ...
The percentage ranges from 80 percent of PCs connected for small sites to 71.5 percent for larger sites. (Because small businesses have a lower LAN penetration, the total percentage of PCs on a LAN for small sites is only 30 percent, whereas overall for large business it is 70 percent.)
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From page 180... ...
The year 2000 may be too soon to predict saturation of external network access, but it is clearly predicted as the time for saturation of the LAN interface market. Small office, home office, and mobile workers connect to their main workplace LAN through remote access.
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From page 181... ...
, and taking into account the amount of time a typical user spends in front of a computer as opposed to a telephone, the two are likely similar in terms of economic and social importance, if not in revenues to the service providers. Should highly bandwidth-intensive applications, such as desktop video conferencing and various forms of multimedia, become widespread in the business environment, business networking may become high enough in volume to stimulate accelerated investment by telephone companies and third-party network service providers (such as Internet access providers)
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From page 182... ...
At the same time, because they are not constrained by an existing coax deployment, LECs have more technical options, such as HFC versus the more advanced fiber-to-thecurb architecture, either of which can be supplemented with ISDN and ADSL at the network's margins to support reuse of existing copper plant for data and possibly video services. LECs also have several wireless options for competition for video delivery, as discussed in the subsection "Wireless Cable." The two-way communication capacity available to users in the home with HFC is likely to be sufficient within the next 5 to 7 years not only for delivery of interactive entertainment with limited, upstream, point-andclick commands, but also for relatively more bandwidth-intensive purposes such as provision of on-line services, Internet access, file transfer, and remote access to workplace LANs.
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From page 183... ...
Box 5.1 presents several major telephone and cable companies' reported plans for deploying hybrid fiber networks. Delays and rollbacks in video trials by several telephone companies may be motivated by factors such as uncertainty over consumer demand for interactive video; anticipated changes in telecommunications regulation that could alter the terms under which telephone companies might compete in video delivery; pursuit of alternative opportunities for offer
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From page 184... ...
. Early trials with interactive video entertainment appear to be leading to a decreased emphasis on these services as the main source of demand motivating investment in residential infrastructures.~° Information services, Internet access, telecommuting, and financial services are some other areas of demand that could motivate investment in residential ar
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From page 185... ...
capabilities. Cable modems, which can carry data services to and from the home over a cable television system, are already available from a range of manufac turers, including LANcity, General Instrument, Motorola, Scientific-At lanta, Intel, and Zenith (Lindstrom, 1995b; Communications Daily, 1995c)
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From page 186... ...
(Internet access for business networking purposes is discussed separately, in the section above on data communications.) On-line Services and Internet Access Business information services are a significant U.S.
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From page 187... ...
Veronis, Suhler & Associates estimated 1994 revenues for on-line services and consumer Internet access (distinct from business internet-working across the Internet, discussed in the data communications section above) at $1.4 billion, with a customer base of 4.7 million households (Veronis, Suhler, 1995, pp.
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From page 188... ...
Summary and Forecasts The role of wireless will evolve over the next 5 to 7 years, with numerous changes in the technological and regulatory contexts. This section considers a number of very different technologies, including cellular telephony, wireless data networking, and terrestrial and satellite broadcasting.
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From page 189... ...
Direct broadcast satellite distribution of digital video signals has entered the market more quickly than anticipated and is viewed by some as potentially growing to represent a real source of competition to terrestrial broadcasting and cable video delivery. Provision of terrestrial wireless cable services is viewed with increasing interest by telephone carriers and others as a way to compete with existing cable systems without making large investments in a new, broadband wireline infrastructure.
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From page 190... ...
CTIA anticipates cellular subscribership in 2006 in the range of 38.2 million to 55.1 million. One factor that could stimulate demand for wireless telephony is increased wireline local-access prices that LECs could be forced to change, if the substantial network access revenues they receive from IXCs (quantified in the "Demand for Telephone Services" section above in this chap
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From page 191... ...
Regulatory changes could drive down these network access charges, as could a shift of IXCs toward other, competing ways of accessing their customers including wireless local access networks. AT&T's purchase of the largest cellular telephone service, McCaw Communications, represents such a shift.
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From page 192... ...
As noted in the section above on data communications, one source of demand for wireless data services is the portable computer with a wireless data modem installed. A perspective on nomadic computing is given by IDC's estimates of the market for portable PCs (IDC, 1995e)
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From page 193... ...
In the longer term, however, satellite systems may make higher capacities available for mobile users of both voice and data communications. For example, Teledesic (founded by Bill Gates and Craig McCaw)
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From page 194... ...
petitioned for 250 MHz of spectrum in approximately the same frequency range, also for wireless data communications at about 20 Mbps (WINForum, 1995~. Both technologies could support applications such as wireless local area networking and wireless access to wireline networks.
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From page 195... ...
4. Note that these totals exclude trials, as well as all fiber deployment by competitive local exchange carriers (COMPLECs)
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From page 196... ...
9. Demand for modems is driven not only by the need for remote access to corporate networks by workers in the home and on the road, but also by applications such as on-line services and Internet access (IDC, 1995c)
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