Effective Loop Management and Testing for Residential DSL WHITE PAPER

Transcription

1 Effective Loop Management and Testing for Residential DSL WHITE PAPER

2 Table of Contents I. Broadband Paradise Lost 2 II. The DSL Market 3 The Business Environment 3 The Residential Environment 4 III. Loop Management for DSL Over POTS 6 Definition of Loop Management 6 Existing Loop Management Implementations 6 Loop Management in the Residential Environment 8 Benefits of Loop Management in a Residential Environment 10 IV. A Solution 12 V. The Return on Investment 13 VI. Conclusion 14 P 1

3 I. Broadband Paradise Lost Whoever coined the expression, 'the Devil's in the details,' surely worked in the telecommunications industry. And if that cliche hadn't been around for decades, you would probably think it came from the DSL business. 'DSL Hell' is a term that even a rookie to the DSL industry has heard and possibly even experienced. DSL Hell is in part caused by the tremendous success of DSL itself. That is, as DSL moves beyond the early-adopter stage into mass-market acceptance, the number of orders is increasing faster than service providers can handle them - from a few hundred per week just 18 months ago to several thousand per day right now. With that many customers, rapid provisioning new customers and efficient maintenance becomes paramount. Some of the biggest gremlins contributing to DSL Hell include accurate loop testing, expensive truck rolls, too few resources, and even finger pointing between competitive and incumbent service providers. Incumbents have been offering DSL on the same line as POTS (Plain Old Telephone Service) since DSL's beginning. The FCC recently gave this ability to competitive providers. Delivering DSL over POTS means that a customer is more likely to be able to receive DSL services, truck rolls are less necessary and copper exhaust is less of an issue. With escalating deployment, a rapidly growing subscriber base and greater competition, it is important for service providers to radically improve customer service, service delivery, and customer support to keep up with demand and help differentiate themselves. Problem areas today include inaccurate information regarding which subscriber loops can support DSL. False positives create customer satisfaction issues when the promised service won't work, and increased operational costs when service providers expend resources on unsuccessful deployments. False negatives create missed revenue opportunities. In addition, as consumer demand for DSL service grows, DSL providers are struggling to deploy service fast enough. Consumers can wait more than four weeks for DSL service turn up, while cable modem and wireless broadband providers can deploy in half that time. DSL selfinstallation is key to reducing deployment times and scaling DSL business, but self-installs are unsuccessful if the subscriber loop and backend network are not installed and configured properly. Better loop management, including automated and remote testing of a loop's ability to support DSL services, is a very simple way to conquer these issues. This whitepaper, jointly developed by TeleChoice, Inc. and Turnstone, focuses on loop management in an environment where DSL and POTS run over a shared line. The next section presents a brief overview of the DSL market through to the present. The third defines loop management, examines how it has been approached until now, and looks at some of the benefits that come with such a system. Before concluding, the paper then examines a solution that meets the need for loop management for both ILEC and the CLEC in today's increasingly standard regime of running DSL and POTS over the same line. Effective Loop Management and Testing for Residential DSL P 2

4 II. The DSL Market Broadband connectivity has increasingly become a necessity for U.S. businesses and consumers. Now the market is just beginning to move beyond the early-adopter phase of deployment into the mass-market phase. Whether business or residential, a mass-market customer expects basics like customer service, service uptime, and most fundamental of all - service provisioning - not to be done on a best-effort basis. U.S. Quarter by Quarter DSL Growth Lines Deployed (in 000's) % 60% 50% 84% 73% 115% 90% 4Q 98 1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 Figure 1: Source - TeleChoice, Inc. The Business Environment Through the end of 2000, the U.S. DSL market was largely split based on the type of end user. Competitive providers generally served the business market while incumbents primarily served the residential market. This segmentation was far from coincidental. CLECs chose to target SMBs (Small to Medium Businesses) as the most likely market for DSL services for two basic reasons. First, SMB customers tend to generate significantly more revenue per customer than residential customers do. Second, and arguably more important, targeting SMBs was a decision dictated by the costs of CLEC DSL deployment, which this paper will discuss later. To better serve the SMB market, the CLECs focused their efforts by: - Deploying SDSL (Symmetric DSL), which is better suited to the needs of business customers. - Partnering with ISPs (Internet Service Providers) who also targeted SMBs. - Collocating primarily in central offices located in or near business districts. P 3

5 One very compelling reason for this split in the market was that CLECs had to use 'dry' or separate copper loops to deliver DSL service. The ILECs were offering residential service using ADSL over lines that were also used for voice. ADSL works over a higher frequency than voice and can be transmitted simultaneously without interfering with POTS. But only the ILECs could take advantage of this fact. Although the CLECs were free to purchase ADSL equipment and deploy it in residential areas, they could not offer DSL over incumbent POTS lines. The FCC has a broad mandate under the 1996 Telecom Act to further local competition, but it did not initially find that this line-sharing capability was necessary to further that goal. Without line sharing, several factors tilted the residential market in favor of incumbent providers. Foremost among these was that a CLEC had to request a separate line to provide residential service. As an UNE (Unbundled Network Element), a separate loop usually cost between $15 and $25 per month. With the ILECs essentially paying nothing for loop access, this meant that CLECs could not price residential services competitively. Typically, they have had to price their residential DSL at least 25 percent per month higher than the incumbents do. Additional market conditions that contributed to the ILECs' advantage in the residential market included: - CLECs had to go through the process of working with the ILEC to turn up and qualify a previously dead line. - Copper exhaust - often there was no copper pair available. - Available copper was unsuitable for supporting DSL. - Customer installs required truck rolls to turn up lines, test lines, deal with inside wiring issues, and set up CPE (Customer Premises Equipment). - The need to coordinate the various steps among CLECs, ILECs, and the customers themselves led to slower installations and greater frustration among customers who chose a CLEC for their DSL service. Breakdown of Residential and Business Subscribers Among ILECs and CLECs - 3Q 2000 Lines Deployed (in 000's) % 80% Business Subscribers Residential Subscribers Incumbent Providers 71% 29% Competitive Providers Figure 2: Source - TeleChoice, Inc. The Residential Environment As mentioned previously, the 1996 Telecom Act gave the FCC a broad mandate to promote competition in the local telecom market. Although the Commission first concentrated its efforts purely on opening the local voice market, it eventually recognized the growing importance of the data component. To truly foster competition in local markets, the FCC thus decided that it was necessary to unbundle the portion of the loop used for carrying high-speed data. The subsequent order, which went into effect in June 2000, enables competitive providers to lease the spectrum capacity of a local loop that was already being used by an incumbent to provide POTS. Effective Loop Management and Testing for Residential DSL P 4

6 After the FCC order was issued, CLECs and ILECs immediately began planning to operate in the new environment. Joint planning boards were set up to establish processes for the new environment and to deal with areas of contention on an ongoing basis. But from the start the main issue was the need to install splitters in central offices. Incumbents had long used splitters for their own DSL operations to separate POTS from data signals. Yet with line sharing, splitters had to be installed for competitive providers as well. The location of the splitter was one big issue because splitters commonly block the capabilities of DSL test equipment located on racks with the concentrators. Because of this, some competitors fought to have the splitter located in their collocation area. Private agreements between carriers determined most splitter placement issues, but in some cases state PUCs (Public Utility Commissions) mandated that certain placement options be made available. The amount of space available in a central office, carrier preferences, and most of all loop management issues played into the decisions on where splitters are located. Wiring all these splitters and preparing to deal with a flood of cross-connection requests has been a major chore for the incumbents. It has also highlighted the need for better loop inventory management, specifically for DSL. Thousands of central offices had to begin coping with requests for line sharing in a very short time period. Simply keeping inventory on the new UNEs has been a huge task for some ILECs. For all the incumbents, line sharing has resulted in extensive planning and forecasting for each of their central offices, and in some cases this planning has led to reorganizations of the networks. In a bow toward the growing importance of data, some incumbents are hardwiring splitters into the central office architecture. Doing so cuts down on the chances of improper wiring in the cross connects. This is a significant change because it shows that offering DSL, and opening the network to competitors' DSL, is no longer just a patch or an ad hoc task. Line sharing is one of the changes that is evolving the legacy POTS network into one that is more open to competition and more data-centric. As of November 2000, TeleChoice research has found that as many as two-thirds of new CLEC residential customers are using shared lines. By year-end 2000 some CLECs are shooting to have 90 percent of new residential customers on shared lines. ILECs are already offering virtually 100 percent of their DSL on lines that also carry POTS to their in-region customers. The evolution to an environment where all players offer DSL over POTS is also having impacts beyond the central office. Two of the most important changes are lower loop fees for the CLECs and the availability of self-installation kits for consumers. Loop Fees. The final costs for a shared loop are still being worked out, but they seem to be settling between $0 and $6 a month. There are some differences of opinion over what the rate will eventually be, but regardless of whether it is $0 or $6, the final cost will still be significantly less than the $15 to $25 per month that CLECs paid for separate lines in the dry environment. If this savings is passed through to end users, the CLECs' residential DSL pricing should become much more competitive. Self-Installation. Self-installation may be the Holy Grail for DSL service providers. DSL over the same line as POTS enables self-install because there is no need to send a technician to turn up the DSL line. Additionally, using a wet or live loop means that the copper is much more of a known quantity. That is, since it is already being used for voice services, chances are higher that it is also capable of supporting DSL. This also helps reduce the need for a technician at the customer premises. A self-install kit typically consists of a CD-ROM that automatically configures the customer's PC for service and a modem that plugs into a USB or Ethernet port. With a well-designed kit, most customers can set up their own service in a few minutes. The incumbents have been deploying DSL over POTS since DSL's beginning. Today, ILECs report that as many as 95 percent of new sales opt for self-installation and that approximately 80 to 90 percent of those customers succeed in setting up their own service. CLECs are just starting to offer customers the same option. A goal for all service providers is to increase self-install success rates. P 5

7 Self-install is tremendously important to service providers for several reasons: - DSL providers do not want to be in the CPE business, and with self-install they can offload this responsibility to equipment vendors, retail outlets, and the customers themselves. This frees service provider resources for other purposes and potentially gives end users more choice in the equipment they use. - Self-install dramatically reduces installation times. By reducing or eliminating truck rolls, service providers can cut days off the time it takes to set up service. - It also improves the initial customer experience. Customers can set service up on their own time instead of having to take time off to meet a technician at their home. Reports of customers waiting to meet a technician who never shows up have plagued the early DSL market. Service deployment without truck rolls helps service providers by increasing scalability, saving on operating expenses, improving the customer experience, and speeding provisioning. III. Loop Management for DSL Over POTS Definition of Loop Management Loop management starts with the ability of a service provider to have efficient and accurate knowledge of the capabilities of the local loops under its control. This knowledge then guides decisions such as what services can be sold on that loop, what steps need to be taken to improve the capabilities of that loop, or what actions should be taken to resolve problems on that loop. Loop management includes both the knowledge and control of the last-mile physical plant. For a DSL service provider, effective loop management must include: - Passive Testing and Inventory. This is the ability to regularly test and keep track of all local loops specifically for DSL capabilities. This inventory would include categories for loops that could be conditioned, as well as loops that could not be served. It would also grade DSL-capable loops for the level of service they could support. The inventory needs to be easily accessible through electronic interfaces. - Active Testing. This is the ability to test individual loops instantly and remotely to verify the inventory for purposes of loop qualification. Loops can then be turned up very quickly - two to three days at the most. - Installation Verification. This is the ability to proactively verify correct cabling; at the splitter, at the voice switch and at the DSLAM, when connecting a subscriber loop for DSL service. It also includes the ability to proactively verify layer 2 and 3 network connectivity to insure that when a subscriber installs and configures DSL equipment at their premise, the network is ready for service. - Troubleshooting. This means giving customer service or end users the ability to remotely access information on the status of the loop and identify service issues. It includes visibility of the loop both inside and outside the central office. - Spectrum Management. This is the ability to identify spectral interference among different pairs in a binder group and work around them. Existing Loop Management Implementations Loop management implementations have reflected the split in the market between residential-oriented ILECs and business-oriented CLECs. They also reflect that the incumbents were large companies transitioning existing networks built to support voice services while the CLECs were generally DSL startups building their networks from the ground up. Effective Loop Management and Testing for Residential DSL P 6

8 ILEC Loop Management. The ILECs initially relied on existing tools deployed to support POTS in the copper loop to support DSL deployment. Since the ILECs could use a line that was already in service for voice, some of the uncertainty about the loops being able to work properly for carrying DSL data traffic was eliminated. Even now, most incumbents have not installed, or at least are not yet using, any DSL-specific remote test equipment. Instead, the incumbents rely on engineering inventories bolstered by low frequency testing done out of the Class 5 switch. ILEC testing verifies loop length, and their design inventory indicates whether any impediments such as load coils or bridged taps are on the line. However, TeleChoice research has found that these inventories are actually accurate only between 60 and 80 percent of the time. When the line doesn't support service even after it looked like it could, the ILEC's procedures revert to the costly and time-intensive procedure of sending out a technician with handheld test equipment to identify and try to correct the problem. CLEC Loop Management. The CLECs have integrated DSL-specific remote test equipment into their networks. Although DSL test equipment cannot see through most splitters, this was not a concern because the CLECs were deploying services on dedicated loops and therefore did not require splitters. They could collocate test equipment in front of their DSLAMs and gain an accurate picture of the capabilities and condition of the loops that were being handed over to them. DSL over POTS is enabling CLECs to become more like ILECs, and it will also nudge incumbents to become more like the competitive providers for their out-of-region offerings. This will further highlight the need for better loop management. - As a condition of their respective mergers with GTE and Ameritech, the FCC ordered Verizon and SBC to create separate subsidiaries for providing DSL. These new ILEC-DLECs have highlighted the need for better loop inventory and testing capabilities by the incumbents because the subsidiaries have to be dealt with at arm's length. As such they will come to realize, and should make it clear to their parents, that not having instant access to loop information creates a large and unnecessary drain on their resources. - As another condition of their mergers, the FCC stipulated that SBC and Verizon begin to service certain cities outside of their traditional territories. Qwest has already ventured out of region offering DSL service in Texas and California. The experience of being on the other side of the ILEC/CLEC debate doubtlessly drives home the importance of loop management. Seeing the benefits of better loop management as a CLEC should also highlight the advantages it would bring in an ILEC's home territory. P 7

9 POT Bay D S L A M M T A U DSL Signal MDF Collo Space Separate loops to customer prem DSL in a Dry Environment - Seperate Loops are Provided for POTS and DSL Class 5 Switch POTS Signal Figure 3 Loop Management in a Residential Environment ILEC Loop Management. ILECs have been deploying DSL over POTS from the beginning, and with their current processes they have been installing large numbers of new residential customers for the past several quarters. The ILECs are finding that as they begin to broadly market DSL and scale operations to serve a large number of deployments, they are having problems keeping up with demand. SBC, for example, reported a 100,000-subscriber installation backlog at the end of first quarter These circumstances highlight the need for the incumbents to have better loop management. Primarily citing a need for improved scalability, at least one ILEC is now deploying DSL test units in its COs. These test units are placed in front of the splitters in the central office, and the ILEC is trialing the units in several markets now (see Figure 4). It was anticipated that automated testing for DSL-specific functionality would help cut into the time it took to turn up service and thereby improve scalability. POT Bay DSL Test D S L A M Splitter M T A U MDF Binder Groups A Progressive Central Office Deployment - Splitters and DSL Testing Capabilities are built-in Class 5 Switch Figure 4 Effective Loop Management and Testing for Residential DSL P 8

10 The central office architecture described above is a good example of progressive planning for mass scale DSL deployment. - By hardwiring binder groups to and from the MDF to the splitter, as well as from the MDF to the Class 5, the chances of incorrect connections in the central office are greatly reduced. With such a setup it's now just a matter of doing two cross connections (from MDF to splitter and from splitter to Class 5). This greatly increases scalability because a single technician can now do the necessary wiring for hundreds of new subscribers a day. - In large central offices where the MDF, splitters, and Class 5 can be on different floors, this architecture also represents a significant reduction in labor from running cables. CLEC Loop Management. Depending on how a CLEC sets up in the shared environment, the benefits of existing test equipment could be completely lost. For example, if the splitter is placed in a common area in front of the CLEC equipment in the CO, then existing test equipment will not be able to see beyond that point. Most splitters simply block the test signals sent by a DSL test unit. Some competitive providers are requesting that splitters be placed in their collocation area. When this option is available, existing test equipment can be placed in front of the splitter, and the functionality of the equipment is retained. Unfortunately, this is frequently not an option. Sometimes there is not enough space for every CLEC to have its own splitter in the collocation area. Other times the state PUC has not supported this architecture as an option for line-sharing deployment. It's also possible that the CLEC does not prefer this option. TeleChoice has found that some CLECs do not want the splitter in their area because of a concern it could make them partially liable for voice services. Other CLECs have reported that incumbents are offering incentives to CLECs who agree to keep splitters in a common area. Whatever the reason, TeleChoice has found that the majority of splitter placements are in the common areas of central offices. This means that most of the previous shortcomings in loop management are continuing in the new line-sharing environment. In fact, because some CLECs who had testing capabilities before are basically giving up those abilities now, and because line sharing itself may create additional loop management issues, there may be less effective loop management in the DSL over POTS environment than there was before! Common Loop Management Issues With DSL Over POTS Issue Impact Solutions Existing DSL test equipment cannot see through splitters in a DSL over POTS environment. Splitters create need for additional wiring in the CO. With additional wiring, cross connections are often mishandled, and when this occurs, providers have no direct way of knowing what the problem is. - Service providers rely upon engineering inventories to tell them whether a loop is qualified for DSL. - No real testing is done to verify the ability of a loop to support DSL, and improper determinations can result. - Delays in provisioning and customer frustration frequently result. - Because there is no means of remotely testing wiring in the central office, a provider has no way of checking whether connections have been done properly or done at all before service is supposed to be turned up. - When a problem does arise, a technician has a laundry list of items to check including cross connections. - Frequently leads to delays in provisioning and customer frustration. - A few providers, including at least one incumbent, are now placing DSL test equipment in front of the splitter. - For competitive providers, this is a solution only if there is sufficient room to collocate a splitter in their cage. - Wiring issues in the central office are dealt with largely through a process of elimination. - One incumbent provider is hardwiring binder groups of 100 pairs in an effort to cut down on labor and room for error, but there is no means of automatically verifying cross connects. P 9

11 Benefits of Loop Management in a Residential Environment Efficiently Handle Large Quantities of Orders. As the market moves to mass consumer adoption, efficient provisioning and customer support have to become givens. Current loop management simply will not suffice. Some of the shortcomings with today's loop management include: - Only 60 to 80 percent accuracy in terms of telling a consumer whether service can be offered. - No ability to proactively verify correct splitter cabling, DSL service operation or voice service operation before the customer installs CPE and tries to initiate service. - No ability to test remotely to help in troubleshooting. - Technicians must complete testing for DSL-specific functionality with hand testers. With heavy deployment, this means that efficient provisioning is compromised, good customer service is compromised, and ultimately a carrier's ability to compete is compromised. Fewer Truck Rolls. When DSL over POTS is available, 90 to 95 percent of new residential sales are self-install, and 80 to 90 percent of these are successful and never require a truck roll. Yet with thousands of installations now being done per day by some providers, this still leaves hundreds of cases where truck rolls are necessary. In some cases, the end user might require assistance, or there might be an inside wiring issue. However, with accurate testing before the customer is given the go-ahead to self-install, many issues could be identified and dealt with before the customer is led to believe service is ready to turn on. Service providers have told TeleChoice that they estimate the cost of each truck roll at around $150 per occurrence. Sample Cost Savings by Eliminating Further Truck Rolls to Self-Install Customers # of new customers daily % of new customers who take self-install % of self-install customers who are successful Customers still requiring a truck roll Average number of truck rolls presently required Average cost per truck roll Daily truck roll cost still required by self-install customers Potential truck-roll savings per year Source - TeleChoice, Inc. ILEC % 85% $150 $64,125 $16,672,500 CLEC or Out-of-Region ILEC % (by end of 2001) 80% $150 $60,750 $15,795,000 Effective Loop Management and Testing for Residential DSL P 10

12 Faster Installs. Systems that accurately test loops before provisioning will further reduce installation time. Loop qualification can be done with greater certainty and on an expedited basis. Cross connections can be done and then checked quickly from the splitter. Layer 2 and layer 3 network connectivity can be verified before the customer tries to initiate service. This means a faster firm order commitment date and a higher rate of successful self-installs and fewer deployment delays. Customers can be given the self-install go-ahead on an even faster basis, and if there are issues like conditioning that need to be addressed by a technician, the provider can pinpoint the problems faster. Example of Incremental Revenues by Reducing Installation Times 50% Time to provision new customer with self-installation Time to provision new customer with self-installation and automated DSL-specific testing Provider with self-install and automated testing could turn up twice as many customers over same period $$ per residential customer per month Incremental transport $$ per month from better provisioning Incremental $$ per year from better provisioning Source - TeleChoice, Inc. ILEC 20 days 10 days 20,000 customers/month vs. 40,000 customers/month $40 $800,000 $9,600,000 CLEC 30 days 15 days 10,000 customers/month vs. 20,000 customers/month $40 $400,000 $4,800,000 Better Loop Qualification. Right now loop qualification is based on engineering inventories with low frequency testing to verify some basic characteristics such as loop length. With automated and see-through testing, true loop qualification can be done on a per-line basis. It also can be done remotely. In fact, there is no reason why it cannot be extended to end users just as present service availability queries are now being linked to the incumbent's design inventories. Better Troubleshooting. When issues arise in either provisioning or maintaining a DSL connection, a technician with a hand tester must usually be called in to zero in on the problem. From TeleChoice's research, no service provider has any means of remotely determining wiring issues in the central office or of checking on a line's status in a wet copper environment. Having visibility forward and back could eliminate the need for a technician to run through a laundry list of possible problems. DSLspecific testing could help pinpoint the problem so it could be directly addressed. P 11

13 Expense Savings Example by Reducing Troubleshooting Truck Rolls % of customers who unnecessarily require truck roll or CO technician per month* Installed customer base Customers who unnecessarily required troubleshooting truck roll or technician in one month period Average cost of truck roll or central office technician to troubleshoot Unnecessary troubleshooting costs per year Large DSL Provider 2.5% 500,000 12,500 $150 $22,500,000 Mid-Size DSL Provider 2.5% 150,000 3,750 $150 $6,750,000 * Examples include wrong configuration, CPE failure, or other problems not the responsibility of the DSL provider Source: TeleChoice, Inc. IV. A Solution Loop management systems, such as those that automate loop testing, identify issues like faulty cross connections and verify higher layer network connectivity, will greatly enhance the benefits of offering DSL over POTS. TeleChoice's research has shown that as service providers tackle loop management in a residential environment, they will need solutions with testing capabilities not found in the testing equipment deployed today. One possible solution is a new type of splitter, a 'smart splitter', that combines traditional splitter functionality with metallic test access.. With this ability, a service provider can connect DSL test equipment to the splitter and 'see through' the splitter for DSLspecific testing to the subscriber. The provider can also see back from the splitter to determine whether central office wiring is connected correctly, verify that the subscriber voice service operates correctly and verify that the DSL service operates correctly. This solution eliminates the extra cabling and equipment cost incurred when a separate metallic test access unit (MTAU) is integrated into the loop for DSL testing. Arguably the best aspect of all is that providers can perform these functions remotely and on an automated basis. Providers can use existing test heads deployed for the dry environment without having to collocate the splitter in their cage. POT Bay DSL Test D S L A M Smart Splitter MDF Binder Groups A Central Office environment with a Smart Splitter and test head testing for DSL can now see through the splitter Class 5 Switch Figure 5 Effective Loop Management and Testing for Residential DSL P 12

14 V. The Return on Investment The following case study outlines potential operational savings DSL service providers can achieve by implementing remote loop management in their consumer DSL networks. The following assumptions are made in this case study: - The service provider has an installed base of 5,000 subscribers and 50 COs deployed in the first month - DSL central office deployment grows to 317 COs over 2 years, subscribers grow to approximately 397,000 - The average service revenue per customer is $40 - Customers are self-install, with an 85% success rate, loop management products eliminate at least one truck roll per unsuccessful self-install, the cost per truck roll is $150 - The service provider deploys Turnstone Smart Splitter (tm) SX500 splitters with test access and for each 2000 subscribers in a CO, one Turnstone CX100 Copper CrossConnect (R) loop management system - An average selling price is used for the Turnstone equipment The return on investment results over a two year period for this scenario are provided below: Total number of COs Total subscriber lines Cumulative savings from reduced truck rolls and early revenue recognition Cumulative Turnstone loop management equipment cost Internal Rate of Return NPV at 16% required rate of return ,000 $ 17 million $ 4.6 million 16.9% $ 977,000 For this scenario, the service provider reaches the breakeven point in the eighth month of deployment. Return on Investment Dollars $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 Savings Cost Months P 13

15 VI. Conclusion Rapid market adoption of DSL service and competition means that service providers will have to execute flawlessly as they scale their business in order to survive. In this environment, offering DSL over POTS is a good start - it allows greater likelihood of service availability and enables self-installation. Still, offering DSL and POTS over the same line does not eliminate all uncertainty from loop qualification. It leaves many troubleshooting tasks to costly manual completion, and it cannot tell a provider when cross connections in the CO or provisioning in the network have not been properly done. Remote loop management is critical for efficient installation and operation of DSL over POTS networks. Implementing a remote loop management solution can help customers and service providers out of DSL Hell by: - Automating loop testing so that service providers can compile an accurate inventory of qualified loops without the cost and delay of dispatching technicians. - Increasing the success rate of self-installs by proactively verifying physical layer connectivity, layer 2 and 3 network connectivity and voice service operation prior to customer equipment installation. - Eliminating the need for technicians to manually hunt down a missed cross connect or troubleshoot faulty lines. - Providing a means of accurately knowing the capabilities of a loop to support additional services. - Marketing additional services based on that knowledge. No DSL service provider has yet implemented a loop management system tailored specifically for DSL over POTS. So for now, having these kinds of abilities could help a service provider differentiate itself to Wall Street and to customers in a competitive field. Soon, however, these same capabilities will be a necessity, and any carrier who cannot efficiently provision and support services will quickly be weeded out of the marketplace. DSL operations may take years to reach 'DSL Nirvana,' but by utilizing loop management systems in a DSL over POTS environment, DSL service providers will certainly escape from DSL Hell. Effective Loop Management and Testing for Residential DSL P 14

16 EMEA Sales Headquarters: Turnstone International Ltd. 400 Thames Valley Park Drive Reading, Berkshire RG6 1PT United Kingdom Telephone: +44 (0) Fax: +44 (0) Germany Sales Office: Turnstone Systems GmbH Dusseldorf Prinzenpark Prinzenallee 7 Office Number 36 Dusseldorf, GERMANY Tel: +49 (0) Fax: +49 (0) East Coast Sales Office: Turnstone Systems, Inc. 33 Boston Post Road West Suite 270 Marlborough, MA U.S.A. Tel: Fax: Central US Sales Office: Turnstone Systems, Inc Irene Road Sandwich, Il U.S.A. Tel: Fax: West Coast Sales Office (except CA): Turnstone Systems, Inc East Davies Drive Littleton, CO U.S.A. Tel: Fax: California Sales Office Turnstone Systems, Inc Central Expressway Santa Clara, CA U.S.A Tel: Fax: About Turnstone Turnstone is a leading provider of hardware and software products that enable local exchange carriers to rapidly deploy and efficiently maintain DSL services. Turnstone's flagship product, the Copper CrossConnect CX100, is a loop management platform that is deployed in central offices to enable automation and remote control of physical layer tasks related to DSL installation, qualification and maintenance. Turnstone's Smart Splitter SX500 platform enables comprehensive loop management solutions for residential DSL services. Turnstone's CrossWorks software enables service providers to integrate these loop management functions into back-office Operational Support Systems (OSS), enhancing their ability to efficiently scale their DSL service offerings to meet demand. Turnstone is based in Santa Clara, California and has sales offices worldwide. For more information about Turnstone, visit info@turnstone.com or phone the toll-free number COPPER. About TeleChoice TeleChoice provides business and market strategy consulting to the telecommunications industry worldwide. Applying hands-on experience and user insight, TeleChoice helps clients enter promising markets and expand existing ones, so they gain market presence faster, attain profitability sooner and build sustainable competitive advantage. For more information, visit TeleChoice, Inc S. Boulder Ave., Suite 120 Tulsa, OK Tel: Fax: Corporate Headquarters: Turnstone Systems, Inc Central Expressway Santa Clara, CA U.S.A. Tel: Toll Free: COPPER Fax: info@turnstone.com URL: