Aurora Networks, Inc.

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1 WHITE PAPER 23 Surging Demand for Enhanced Services Puts Billions of Dollars on the Table for Low-Cost Cable-Optimized Fiber Networks Aurora Networks, Inc. March 2010

2 SMB Service Revolution Portends Big Gains for Fiber-Equipped Cable Operators Copyright 2010 Aurora Networks, Inc. All rights reserved. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, or transmitted in any form by any means, electronic, mechanical, photographic, magnetic, or otherwise without the prior written permission of Aurora Networks. Aurora Networks, Inc Betsy Ross Drive Santa Clara, CA Tel Fax

3 White Paper 23 Table of Contents Introduction Changing Commercial Services Profile New Role of Video Applications in Business Managed Services Collaboration Services Video Conferencing and Telepresence Telemedicine Energy Efficiency Cell Site Backhaul Fiber Imperative Coax Upstream Conundrum Layer 2 Performance Requirements First-Mover Advantage Low-Cost Fiber Opportunity Aurora Networks Platform Advantage Maximizing Capacity over Existing Fiber Incremental Single Customer Deployments Incremental Multiple Customer Deployments Node PON Architecture AUROS Enables DOCSIS Compatibility Fiber on Demand Architecture Metro Ethernet Forum Low-Cost Cellular Backhaul High Network Availability Summary

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5 White Paper 23 SMB Service Revolution Portends Big Gains for Fiber-Equipped Cable Operators Surging Demand for Enhanced Services Puts Billions of Dollars on the Table for Low-Cost Cable-Optimized Fiber Networks INTRODUCTION Surging demand for bandwidth-intensive commercial services worldwide is generating new opportunities in the SMB market for cable companies large and small, thanks to ground-breaking fiber solutions that allow them to leverage their HFC networks to maximum competitive advantage. Over the past three years major MSOs, especially in the U.S., have proven the case for substantial commitments to commercial service offerings that extend across the wide range of small-to-medium businesses (SMBs) and, in some cases, reach into the major enterprise and institutional markets as well. And now these companies are expanding on that commitment by pursuing cellular companies demand for fiber-based backhaul transport. But elsewhere cable operators have largely focused on delivering high-speed data and VoIP services over DOCSIS access networks to home offices and the lower end of the SMB market. Typically these endeavors have been closely linked to the consumer broadband services side of the business without requiring much investment in business service know-how and marketing. Now there are strong reasons for cable companies that have not gone beyond this level of business service to broaden their commitments. By dedicating themselves to delivering what businesses want in the way of new high-capacity video applications, managed services and specialized niche capabilities, cable operators can tap the billions of revenue potential for such services at cost levels wireline competitors cannot match. These new service requirements are not just the purview of major enterprises; they extend to small businesses as well. If cable operators can bring these advanced capabilities to businesses which were once demanding nothing more than a highspeed data pipe, typically a T1, and a few lines of voice, they will draw new revenues from existing SMB clientele as well as attract new customers whose current providers are not equipped to meet these needs. With the broad range of fiber access options now available from Aurora Networks virtually any cable operator, even those in smaller, rural markets, can expand their existing HFC fiber advantage to take the lead as the local providers of next-generation telecom services to SMBs of every description. And they can leverage those same fiber advantages to provide services to large enterprises, institutions and cellular operators as well. Of course, these same dynamics apply to cable operators who have already mounted full-scale commercial service efforts. Here, too, a big piece of the business has been built on DOCSIS connectivity over coaxial links. But now the opportunity to add new, bandwidth-consuming 5

6 SMB Service Revolution Portends Big Gains for Fiber-Equipped Cable Operators service enhancements that are highly desirable to even smaller businesses requires new thinking about access architectures. While DOCSIS 3.0 will provide an immediate measure of flexibility to expand the product portfolio over coaxial links, the finite capacity of coax and the consumer s insatiable appetite for bandwidth can better be serviced via the use of low-cost fiber access alternatives. 6 CHANGING COMMERCIAL SERVICES PROFILE Soaring commercial service revenues recorded by the top five U.S. MSOs leave no doubt that cable operators who are not committing themselves to building this business are leaving money on the table. The U.S. companies reported commercial revenue growth rates in 2008 ranging from 15 to 41 percent, and, in their most recent quarterly reports, they signaled there will be no slow down in the growth rates for For example, Comcast reported its Q commercial service revenues jumped 49 percent from the year earlier period to $216 million. Privately held Cox Communications, which research outlet Heavy Reading estimated hit $853 million in commercial revenues for 2008, was on track to exceed $1 billion in 2009, according to public statements of company executives. Time Warner Cable, reporting a 15 percent year-toyear jump in Q3, says it hopes to derive 50 percent of its total revenues from commercial services within five years. Impressive as the growth rates have been to date, the U.S. cable industry has barely scratched the surface. Researcher Heavy Reading reports U.S. cable operators are garnering just $4 billion of the $130-$140 billion that U.S. businesses spend on telecom services. Counting just the SMB opportunity within the top five MSOs markets, which Heavy Reading says adds up to about $40 billion, the cable take in just this segment alone is a fraction of the potential. While much of cable s growth has been and will continue to be fueled by sales of bundled data, voice and TV services to smaller SMBs, some MSOs are acting on opportunities to serve larger companies as well. Comcast, for example, recently expanded its effort to include entities with as many as 250 employees in hopes of capturing 20 percent of the $15- to $20-billion SMB market in its territories over the next five years. But to meet such goals cable operators will have to satisfy rising business demand for sophisticated services that consume greater amounts of bandwidth than they ve traditionally supplied via HFC. Whether a cable company already has in place a full-service commercial services division or has yet to mount such an effort, the bandwidth and operations support requirements associated with these new opportunities should be central to everyone s strategic planning. New Role of Video Applications in Business While the bundling of a business-centric TV service with data and voice has long been a competitive selling point for MSOs, researchers report that new trends in video streaming and progressive download applications affecting businesses of every size and description are rapidly reshaping broadband service requirements. WinterGreen Research, for example, projects that

7 White Paper 23 streamed media applications, comprising $3.2 billion of the U.S. business telecom market in 2008, will jump to $14.4 billion in Much like video usage in the residential broadband market, video is becoming a routine component of training and marketing. Niche applications such as streaming of digital signage or streaming of content from remotely stored inventories to video kiosks are becoming commonplace. And, as discussed in more detail below, video is becoming an essential component in collaborative endeavors among dispersed personnel. Bit rates for streaming videos such as sales-training Webcasts easily run in the low megabits. When a large percentage of people employed in even a fairly small business are all running streamed video applications on their desktops the bandwidth consumed over access links goes well beyond traditional broadband requirements. Compound this impact across all the businesses on a shared HFC node and it is easy to see that a cable operator seeking to maximize the customer base in any given service area will quickly run out of bandwidth without making liberal use of fiber or wavelengths over existing fibers. This is further explored in the section on Aurora Networks Platform Advantage. Managed Services Managed telecom services, which at first were slow to take hold, especially in the U.S., now represent one of the fastest growing revenue sources for established carriers. As businesses cut back on IT expenses they are discovering they can get reliable support for management of LANs, wireless LANs, security, remote storage, software-as-a-service (SaaS) and niche-specific applications from their service providers. Rapidly adding to these traditional areas of telecom management services are the vast range of hosted applications that fall under the generic title of cloud computing. Cloud computing occurs when an application or service spreads its workload across hundreds, thousands or tens of thousands of servers and other hardware simultaneously. Such services afford SMBs access to processing-intensive applications and services without the hardware capital and operating expenditures. Moreover, because SMBs often have little or no in-house IT expertise, cloud computing, like other managed service categories, puts capabilities in the hands of businesses they otherwise would not be able to use. Major carriers and now cable operators are adding cloud computing services to their portfolios. For example, at an industry conference in December, 2009, a senior Time Warner Cable executive said the company was preparing to introduce a cloud computing/saas service targeted to SMBs in conjunction with an Ethernet Everywhere strategy that will leverage optical as well as HFC access links. Collaboration Services Demand for telecom services that support collaboration within and among enterprises of all shapes and sizes has grown to where network service providers ability to compete in the commercial services market increasingly depends on having the expertise and wherewithal to address these needs. Collaboration is a catchall term that spans a wide range of apps and 7

8 SMB Service Revolution Portends Big Gains for Fiber-Equipped Cable Operators services, including messaging, Webcasting, internal Wikis and blogs, document management, videoconferencing and unified communications. Many collaboration applications can be hosted by service providers in the SaaS model. Several factors are helping drive the collaboration market, including most recently the poor economy, which has induced companies to look for new ways to maximize productivity rather than staffing up. Mergers are another driver because companies often don t want to risk losing top talent at acquired companies by forcing those employees to relocate. Collaboration tools provide a way for those remote offices to work efficiently with headquarters. SaaS-based collaboration products also can have a lower upfront cost than if the enterprise buys everything. That s one reason these activities are now a fundamental part of doing business with SMBs as well as big enterprises. Large or small, enterprises get a fourfold return on investment in collaboration using SaaS services, according to an October 2009 study conducted by Frost & Sullivan. Collaboration, of course, can consume a lot of bandwidth, as is the case when an auto manufacturer, for example, exchanges CAD files with one of its suppliers. Collaboration products offered on an SaaS basis can also mean more revenue for broadband providers because enterprises often have to pay for SLAs (service level agreements) as they become highly dependent on apps and services that reside outside their domain. 8 Video Conferencing and Telepresence A particularly bandwidth-intensive aspect of collaboration service is video conferencing and its cutting-edge successor, telepresence. While the latter started out as an application employing big multi-screen Hi-Definition (HD) system requiring up to 30 megabits per second of bandwidth per room, it has rapidly evolved into an HD version of traditional video conferencing where low costs and high-quality imaging on large screens have put the service in reach of smaller businesses. One vendor, for example, is offering a telepresence system that employs a single, 65-inch display rather than multiple screens. Another is providing a telepresence network appliance for small and home offices that supports functions such as NAT (Network Address Translation)/firewall traversal, routing, traffic shaping and bandwidth allocation. Such tools are extending use of telepresence to telecommuting employees and to smaller firms such as public relations and consultancies where employees spend a lot of time interacting with clients in distant cities. Prospects for this type of down-market expansion of telepresence services are one reason Frost & Sullivan, in another recent report, predicts the global market for telepresence services will jump from $3.2 million in 2009 to $4.7 billion in While the bandwidth requirements are falling as the telepresence market expands to smaller businesses, the HD-quality feeds still represent a much higher video bit rate requirement than typical Web video applications. When combined with the other high bandwidth-consuming applications described above, telepresence offers another powerful revenue driver behind cable operators use of high-bandwidth fiber access options.

9 White Paper 23 Telemedicine After years of limited use within the medical profession, telemedicine is reaching an inflection point that extends all the way to the home. As a result it is a service opportunity cable operators can ill afford to ignore. By 2014, annual U.S. telemedicine spending will approach $3.6 billion, according to an October 2009 Pike & Fischer report. Incumbent carriers are rapidly gearing up for this opportunity, the report says. It predicts AT&T will have the largest market share, followed closely by Verizon and Sprint Nextel. A number of factors are combining to drive greater use of network connectivity in health care, including government determination to lower health care costs, the ubiquity of high-speed networks and growing use of video and data feeds in conjunction with a new generation of portable devices tied to remote care procedures. The federal government, with $20 billion earmarked for healthcare IT, will spend at least $5 billion on broadband-enabled telemedicine services such as remote patient monitoring and network access to medical records, Pike & Fischer says. Another market driver is the democratization of medical equipment. For example, over the past several years, ultrasound gear has steadily decreased in price and size, to the point that home health nurses can take the equipment to patients. Even if that diagnostic information is read in the patient s home, it still has to be uploaded to the physician at some point. The telemedicine market is segmented by specialties, such as teledermatology and telepsychiatry, each of which has different needs in terms of bandwidth, as well as different levels of maturity. A remote consultation between a patient in a rural clinic and a specialist in a city hospital may only require a video stream consuming 1 Mbps or less, whereas teleradiology image scans transferred from one institution to another can consume hundreds of Mbps. Telemedicine is obviously a highly specialized service, but MSOs can participate by partnering with companies that have the necessary expertise to offer a portfolio of solutions, from bandwidth to hardware to systems integration. There is no reason to leave this fast-growing segment to the telcos. Energy Efficiency Another vertical arena where a big government push promises to create a much greater opportunity for service providers is energy management. In late October the U.S. Department of Energy (DoE) awarded $3.4 billion to help improve energy efficiency with more than half the money earmarked for building and expanding smart utility grids. The DoE s $3.4 billion is being matched by private investments, pushing the total amount for smart grids and related initiatives to more than $8 billion. Smart utility grids are all about collecting information lots of it about the electrical infrastructure, from long-haul transmission systems down through distribution lines to meters and energy-consuming equipment inside homes and businesses. That data requires a network to get back to the utility and, in some cases, to third parties, such as Google and Microsoft, which are looking to make a business out of helping consumers manage their consumption. 9

10 SMB Service Revolution Portends Big Gains for Fiber-Equipped Cable Operators Many of the government-backed projects require a local- or wide-area network, or both. One example is a nationwide mesh of sensors that will monitor the entire U.S. electric grid. Another entails deployment of 345,000 load-control devices, such as smart thermostats, that will manage networked appliances such as water heaters. Miami alone will get more than one million smart meters, connecting virtually every business and residence in the metro area. As those projects take shape over the next couple of years, utility companies and their customers will start pumping out more data, which means more business for service providers. Although a low-usage application such as automated meter reading might not sound like a major revenue opportunity, it can be when there are hundreds of thousands of meters sending data in a single metro area. Over the next few years, significant amounts of additional data traffic both upstream and downstream will come from energy-management applications. Cell Site Backhaul Several cable operators have already mounted initiatives aimed at capturing some of the estimated $32 billion mobile service providers were spending as of 2009 on backhaul equipment and services, which, according to Infonetics Research, represents about 30 percent of mobile carriers operating costs. Increasing carrier demand for capacity to accommodate the high bandwidthconsuming capabilities of 3G and 4G services will continue driving rapid growth in backhaul spending, which, according to Infonetics, saw a 60 percent jump between 2006 and Infonetics says average bandwidth requirements per backhaul link doubled over that period and now stands at 9 Mbps in As this capacity surge outmodes the usefulness of legacy T1/E1 backhaul links, carriers are looking for cost-effective fiber-based Ethernet solutions such as those provided by cable operators. Cable operators can provide new technology solutions that allow wireless carriers to add capacity for 3G and 4G IP traffic while aggregating legacy T1/E1 circuits via advanced circuit emulation techniques over the same Ethernet link. Research firm In-Stat predicts Ethernet pipes will account for over half of all mobile backhaul capacity by the end of A cable-optimized backhaul solution that accommodates cellular traffic by extending fiber to base stations from nearby HFC nodes not only represents a margin-rich revenue opportunity for cable operators, as one recently quoted executive put it. With anywhere from 500 to 1,500 base stations and base station controllers to connect in any given metro region, a major backhaul contract also provides an ROI-driven reason for laying an extensive network of access fiber that can be used to serve many other businesses as well. As Pike & Fischer chief analyst Tim McElgunn pointed out in a recent article appearing in ScreenPlays Magazine, Every foot of fiber [cable operators] put out there to serve a cell tower also is usable for other purposes. It gives them a way to fund some expansion that otherwise probably wouldn t happen. 10

11 White Paper 23 FIBER IMPERATIVE Taken individually, many of the foregoing new service categories entail bandwidth commitments which, in and of themselves, would require extensive use of fiber access links with sufficient upside potential to justify the costs. Taken together, they represent an explosive revenue opportunity that can only be seized through aggressive and pervasive use of fiber. Coax Upstream Conundrum The bandwidth inadequacies of coax-based solutions are especially conspicuous on the upstream spectrum, where DOCSIS platforms top out at ~30 Mbps per upstream channel and, in most cases, can only deliver 10 Mbps. Assuming an operator can find usable spectrum to accommodate two 10 Mbps upstream channels, the capacity available for a dedicated symmetrical 10BaseT Ethernet service would service just one business customer on any given node, assuming the remaining capacity would have to be available for residential and other business customers to share. Many operators are upgrading their upstream capacity, some in conjunction with the deployment of the DOCSIS 3.0 platform, which allows them to bond channels together to minimize the impact of multi-user contention for bandwidth on the bit rates available for any given session stream. These upgrades may involve increasing the QAM (quadrature amplitude modulation) level from 16 to 64 QAM and may even involve implementation of the seldom used SCDMA (Synchronous Code Division Multiple Access) noise reduction technique for purposes of opening additional upstream channels. But, given the fact that DOCSIS 3.0 bonding does nothing to increase the overall available upstream capacity, the best operators can hope for if they use 64 QAM with SCDMA to open as many as four channels is still only ~100 Mbps of total upstream throughput. As upstream traffic surges from the residential side, often from several users in the home sharing media content with friends or uploading videos to YouTube and other destinations, the net impact on bandwidth availability for upstream commercial service applications resulting from even the most aggressive DOCSIS upgrade measures will remain far less than is needed to provide multiple business customers the bandwidth they require for new services and applications. Layer 2 Performance Requirements Beyond the bandwidth requirements there are other reasons why operators seeking to capitalize on new commercial service opportunities should plan for liberal use of fiber access links. Commercial services applications are very demanding when it comes to network performance and reliability. While DOCSIS over coax has been the technology of choice for providing residential data services the performance limitations imposed by shared access over HFC coax may not be acceptable to business customers. Cable operators feel the need to look beyond DOCSIS for more sophisticated Layer 2 technologies to meet the stringent performance requirements of commercial services applications. Carrier Ethernet over optical access is touted as the next generation access architecture that will enable cable operators to meet the capacity and performance demands of commercial and 11

12 SMB Service Revolution Portends Big Gains for Fiber-Equipped Cable Operators business subscribers. Carrier Ethernet is highly scalable with sophisticated Quality Of Service primitives and when combined with optical access is perfectly suited to provide advanced services for commercial applications. The types of advanced services outlined here, not to mention traditional LAN extension, WAN management and private line service, require guaranteed levels of performance with regard to latency, jitter, video picture quality and other parameters, often with formal SLAs, which are hard if not impossible to achieve over coaxial shared access networks. Security, too, can be an issue. The higher levels of sensitivity attending managed services and other complex new applications are best met through use of dedicated fiber based dedicated ethernet transport. First-Mover Advantage Another reason for moving expeditiously into fiber-based commercial services is the fact that cable s window of opportunity to set the benchmarks in prices and services as the leading provider to the SMB market will only last as long as incumbent carriers remain hobbled by dependence on their copper access infrastructures. Eventually telcos everywhere will replace copper with fiber, just as Verizon Communications has done in the U.S. Cable operators will be better positioned to compete if they are there first rather than playing catch up. Low-Cost Fiber Opportunity But if cable operators only reasonable recourse is to make liberal use of fiber access if they want to enjoy the rewards of full-service participation in commercial services, they must find ways to minimize the cost barriers that remain the primary impediment to all-fiber solutions. While there is no way around last-mile construction costs, operators can significantly balance out these costs through the savings to be achieved by making use of high-performance carrier-quality solutions that have been fine tuned to fully exploit existing cable fiber infrastructure. Fortunately, the optical solutions developed by Aurora Networks do just that. There is now a cable-optimized option for delivering virtually any type of commercial service an operator may want to offer at cost levels that provide assurance of high margins even in instances where last-mile fiber deployment incurs significant trenching and other costs. And these solutions give cable operators a great cost advantage over telco competitors, which must incur higher construction costs because their existing fiber plant is typically much farther from end user premises than is the case with HFC fiber nodes. AURORA NETWORKS PLATFORM ADVANTAGE Aurora Networks has developed a port folio of products that allow cable operators to optimize use of fiber in all three deployment scenarios that generally characterize the commercial services market. These include situations where: a single fiber or pair of fibers is extended from the node to single customers on an as-needed basis; there are multiple tenants to be served over a single fiber access link; 12

13 White Paper 23 a high geographic concentration of businesses is to be served from a given node. Maximizing Capacity over Existing Fiber A central component to all these solutions is the use of multi-wavelength technology to maximize the carrying capacity of already deployed fiber. By employing CWDM (coarse wavelength division multiplexing) or DWDM (dense WDM) to deliver dedicated business services over the optical portions of HFC plant operators limit fiber construction costs to the access segments. CWDM, by spacing multiple wavelengths farther apart than DWDM, allows operators to use transceivers (transmitter/receivers), including small form pluggable (SFPs), which are much more cost-effective than transceivers that have to meet the rigorous frequency stabilization requirements of DWDM transceivers. But the usefulness of the low-cost CWDM option depends in part on a supplier s ability to maximize the number of wavelengths that can be used over a single fiber, which Aurora has done by creating a full duplex passive 15-wavelength distribution solution. Each wavelength on the downstream fiber and on the upstream fiber can be used to carry a dedicated stream to and from a single customer or to serve multiple customers. As discussed below, in its Fiber on Demand and Virtual Hub (VHub ) applications Aurora Networks also provides advanced technology by which multiple end users can be provided upstream capacity over the upstream fiber link between the node and hub without using multiple wavelengths on the upstream path. Figure 1. Maximizing Capacity over Existing Fiber 13

14 SMB Service Revolution Portends Big Gains for Fiber-Equipped Cable Operators Moreover, where high bandwidth is required, Aurora Networks Node PON GEPON-based (Gigabit Ethernet Passive Optical Network) solution provides a very high-bandwith, fiberefficient solution. With one or many GEPON OLT (Optical Line Terminal) modules distributed in the network using our VHub technology, cable operators can elect the solution which best-suits their requirements. For Node PON deployments, the same multi-wavelength technology can be incorporated for the down and up links. In situations where capacity requirements for a given node serving area exceed what can be delivered using CWDM, operators can implement DWDM options that provide two and a half times the carrying capacity over existing feeder fiber. DWDM also allows operators to transmit signals over greater distances through use of optical amplification, which is not feasible on CWDM links. In all cases, the Aurora Networks solutions simplify installation by utilizing plug-in modules housed in strand- or pedestal-mounted nodes that directly interface the distribution fiber pairs terminated at the node with the access fiber pairs. Indeed, for Node PON deployments, just a single fiber is required for both the down and the up links; a fiber pair is no longer required. Incremental Single Customer Deployments - SMART Media Converters Aurora Networks SMART Media Converter platform provides a straightforward means of adding commercial customers on a pay-as-yougo basis. In instances where the situation calls for provisioning a high-end dedicated Layer 2 service to a single customer, the operator simply installs a module with transceiver components at the headend to provide the required Gigabit Ethernet or Fast Ethernet service transport over the cable distribution network. At the customer premises Aurora Networks provides a range of Fast Ethernet and Gigabit Ethernet SMART Media Converters to interface with LANs and other premises wiring. The SMART Media Converters include transceiver options for operation in either the 1310 nm or the 1550 nm wavelength window. This solution provides symmetrical, dedicated bandwidth to each business customer up to 1 Gbps if required. The platform provides true transparent LAN service and advanced management features in conformance with the IEEE 802.3ah OAM (Operations, Administration and Management) standard, and it is certified as fully compliant with the Ethernet User Network Interface and Traffic Management requirements of the Metro Ethernet Forum s MEF-9 and MEF-14 specifications. The platform also includes an optional module for emulation of TDM-over-Ethernet in conformance with the MEF-18 standard, which is especially important for cost-effective cellular backhaul solutions. Incremental Multiple Customer Deployments - Node PON and Fiber on Demand Cable operators are in a strong position. They can deploy Aurora Networks Node PON and Fiber on Demand technologies today to generate new revenues from business parks, delivering up to 1 Gbps bidirectional Ethernet to commercial users. 14

15 White Paper 23 Node PON Architecture In circumstances where an industrial area represents an opportunity for the operator to serve a number of large enterprises or large multitenant buildings the optimal fiber networking solution may entail deployment of a standardized Gigabit Ethernet PON (passive optical network) architecture but only if this can be done cost effectively by leveraging the HFC infrastructure. Aurora Networks has made this possible by designing a cable PON architecture with nodehoused OLTs (optical line terminals) and premises ONUs (optical network units) that are certified compliant with the MEF-9 and MEF-14 GbE specifications. And the technology allows operators to leverage their DOCSIS provisioning systems to integrate PON into their back-office NMS and OSS platforms. Used in combination with DWDM and other optical networking techniques, Aurora Networks Node PON provides an incremental approach to implementing PON where each OLT can serve up to 64 customers with 1 GbE bidirectional service. The node can accommodate up to five such OLTs, bringing the total of PON customers to be served per node to a maximum of 320. This architecture provides operators far greater reach for PON than could be achieved at comparable costs by telcos. With the OLT positioned at node locations operators minimize the distance limitations of PON technology, which tops out at 20 km between the OLT and ONT (CPE device). And use of DWDM over the backbone allows the PON nodes to be positioned up to 100 km from the headend. Two main products comprise Aurora Networks Node PON solution the GE4132M Gigabit Ethernet Node PON optical line termination (OLT) module and the ONU family of customer premises equipment (CPE). Designed to work in all of Aurora Networks NC4000 and NC2000 series nodes, the GE4132M enables Gigabit Ethernet Passive Optical Network (GEPON) functionality to be available from a cable node. Cable operators wishing to cost-effectively and selectively migrate an installed HFC network to a standards-based GEPON FTTP network can deploy the module into their existing nodes and ultimately support 64 business consumers per GE4132M output. Designed for scaleability, a single NC4000 series node can house up to five modules, with an NC2000 series node up to two modules, and deliver triple-play services to as many as 320 and 128 customers, respectively. Operators install the CPE device at the customer premises. The plug-and-play unit supports delivery of up to 1,000 Mbps bidirectional Ethernet service over fiber to the subscriber. AUROS Enables DOCSIS Compatibility A key differentiator of Aurora Networks Node PON solution is its AUROS software, which ensures compatibility with existing DOCSIS provisioning and billing systems. AUROS enables the GE4132M to look and behave just like a cable modem termination system (CMTS). Operators can use their existing DOCSIS provisioning systems, configuration servers, network management consoles, and back-office infrastructure to provision, manage, and bill for services delivered over the GEPON network. 15

16 SMB Service Revolution Portends Big Gains for Fiber-Equipped Cable Operators AUROS also supports the DOCSIS 3.0 quality of service features, enabling cable operators to collect new revenues from sophisticated usagebased and tiered-pricing packages without having to deploy new provisioning systems. Fiber on Demand Architecture Aurora Networks Fiber on Demand (FonD) solution is today's most cost-effective solution for delivering ultra-high-speed services. Fiber on Demand delivers up to 100 Mbps symmetrical bandwidth dedicated to each subscriber. Fiber on Demand employs a headend/primary hub chassis module and plug-in node modules to support the dedicated Fast Ethernet service. Up to five node modules can be installed at any node, each with interfaces supporting up to four Fiber on Demand Fast Ethernet links. These node modules link to the chassis module at the headend or master hub, which serves as the interface to WAN routers and switches in the metro backbone network. Building on the capabilities of its CWDM technology, Aurora Networks has created a unique Fiber on Demand solution that allows operators to rapidly provision Fast Ethernet services to multiple customers via a single fiber pair extending across many fiber nodes. In this version of the platform, each of 15 CWDM wavelengths is divided into 16 time division multiplexed timeslots to support delivery of Fast Ethernet service to 16 customers. Thus a single fiber pair extending across 15 nodes can serve 240 customers using passive optical modules to capture a single wavelength on the downstream path at each node. On the return, Fiber on Demand assigns each user s stream a time slot 16 for transmission over the 1 GHz of spectrum that s currently not in use on most upstream feeder links, thereby avoiding the need to use CWDM on the return path. Metro Ethernet Forum Aurora Networks Node PON and Fiber on Demand solutions also leverage the strengths of Carrier Ethernet. The Metro Ethernet Forum (MEF) has certified that both families comply with the MEF-9 and MEF-14 specifications. Carrier Ethernet benefits include: Reliability: Detects and recovers from incidents without impacting users Scalability: Scales to gigabit speeds, enabling cable operators to offer ultra high-speed data services to residential and commercial users Cost-effectiveness: Uses gigabit Ethernet (GbE) components, which are mature, standardized and less expensive Quality of Service (QoS): Supports standardsbased verification of service quality for implementing carrier-class service level agreements Low-Cost Cellular Backhaul Cable operators are well positioned to offer cellular backhaul services. Their fiber-rich networks can accommodate the exploding bandwidth needs while their residential concentration gives them close proximity to most of the nation s cell tower sites. However, wireless networks have demanding requirements. Operators pursing this market need scalable, reliable and cost-effective equipment that is engineered to meet the stringent performance needs of today s wireless carriers. Aurora s GT3410A module meets them all.

17 White Paper 23 Aurora Networks T1/E1 access solution enables wireless operators to migrate their backhaul links to Carrier Ethernet without the need to replace the TDM equipment already deployed at base stations. The GT3410A T1/E1 access module leverages Carrier Ethernet strengths such as scalability, reliability and cost-effectiveness to provide significant advantages over the TDMbased backhaul technologies currently deployed. The GT3410A functions as an inter-working agent, and: Connects the wireless operator s T1/E1 links to the cable operator s metro Ethernet network utilizing CWDM/DWDM, Fiber on Demand, or Node PON. Aggregates the T1/E1 links from base stations. Transports the T1/E1 links using GigE uplinks over long backhaul distances. Supports 10/100/1000 Mbps native Ethernet interface. The GT3410A features four T1/E1 interfaces, one GbE pluggable optics interface and one 10/100/ 1000 copper interface. Aurora packages the module in both 3RU (CH3000 chassis) and 1RU (CH1301) platforms for headend and customer premises deployments. Designed for high density, a single 3RU platform can aggregate up to 80 T1 ports in the headend. At the premises, cable operators can daisy chain the 1RU units to maximize fiber efficiency. Figure 2. Low-cost Cellular Backhaul 17

18 SMB Service Revolution Portends Big Gains for Fiber-Equipped Cable Operators Stringent Engineering Requirements Wireless carriers are demanding customers. Cable operators providing cell tower backhaul services must meet very rigorous performance metrics related to frame delay, frame delay variation, and jitter. Aurora s GT3410A delivers this superior performance by implementing several innovations, including: MEF-18 certification. The Metro Ethernet Forum (MEF) certified that the GT3410A complies with its Circuit Emulation Services over Ethernet specification, which includes stringent jitter and wander requirements. Superior network engineering: Aurora designed the GT3410A for delay sensitive traffic with very low latency and jitter requirements. Both frame delay and frame delay variance parameters meet the guidelines specified by the MEF. Timing and clock synchronization: The GT3410A employs in-band adaptive clocking to achieve timing synchronization across the metro GbE network. Aurora Networks is vigilant in its quest for highperforming products. It is the only vendor to achieve three MEF certifications MEF-9, MEF- 14, and MEF-18 for both its T1 and E1 solutions. High Network Availability for Mission Critical Commercial Applications Commercial services subscribers demand five 9 s reliability and 24/7 availability from their transport networks. All Aurora Networks product platforms are designed keeping in mind this requirement of zero tolerance for network downtimes. Path level redundancy is built in by employing optical switches (<5 ms switchover) on the critical transport fiber links. Ring-in-ring architectures, module level redundancy and redundant powering support at the head end, node and CPE locations are some examples of the robust resiliency features incorporated in Aurora platforms. Additionally Ethernet OAM, advanced diagnostics and sophisticated network management tools constitute a highly robust carrier-class solution perfectly suitable to serve the stringent reliability needs of business subscribers. SUMMARY Dramatic changes in the service requirements of businesses across the SMB spectrum are rapidly altering the perspective on cable s potential in this market. Big jumps in bandwidth requirements, new valueadded functionalities and higher network performance benchmarks represent challenges that can t be met through DOCSIS-based HFC solutions alone. The revenue potential associated with these service needs is too great to ignore, as demonstrated by big U.S. cable operators who have redoubled their efforts in light of successes registered so far. But they and the legions of cable operators worldwide who have yet to make this level of commitment will have to adjust their networking strategies if they are to do more than scratch the surface of the SMB markets within easy reach of their networks. Where meeting this challenge once seemed out of reach in light of the traditional costs of building 18

19 White Paper 23 out all-fiber infrastructure, cable operators today can take aggressive action to meet new service requirements by tapping whichever of Aurora s platforms fit the demand profile in any given service area. Whether the situation calls for incremental deployments to single customers, a low-cost approach to adding multiple customers or solutions meant for high concentrations of business users, operators can achieve high margins on their high-bandwidth services by limiting fiber construction costs to the access component. The extraordinary opportunity cable operators have to meet the new service demands of the SMB and enterprise markets by leveraging existing plant gives them a huge cost advantage against copperbased competitors. By being first to market with low-priced next-generation commercial services cable operators will position themselves to ride a revenue wave that will continue growing well into the future. 19

20 SMB Service Revolution Portends Big Gains for Fiber-Equipped Cable Operators Aurora Networks, Inc Betsy Ross Drive Santa Clara, CA Tel Fax