Aurora Networks, Inc.

Transcription

1 WHITE PAPER 12 Aurora Networks, Inc. February 2009

2 Fiber on Demand Opens Cable Path to Higher ROI Copyright 2009 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 12 Fiber on Demand Opens Cable Path to Higher ROI in Commercial Services With the cable industry becoming a major force in the commercial services market, the challenge MSOs now face is how to rapidly build ROI by expanding customer bases through the cost-effective delivery of advanced high-bandwidth services. Larger businesses within cable s targeted SMB (small to medium business) segment are in the market for better, lower cost services than they can typically obtain from telephone companies. But these businesses want carrier-grade transparent LAN, virtual private network and other advanced services that go beyond the VoIP and high-speed data packages that cable operators provide over their DOCSIS networks. For operators to maximize the returns on their considerable investments in commercial services organizations and operations they must find additional ways to serve customers. While Fiber to the Premises is an obvious alternative to coax, the absence of cable-optimized solutions has prevented operators from exploiting the full potential of fiber to provide the coverage and service support they need to efficiently serve this attractive market segment. Fortunately, technology available through the Fiber on Demand solution offered by Aurora Networks provides MSOs an extremely low-cost means of leveraging existing HFC infrastructure to deliver a higher level of service across the entire service area on an incremental, pay-as-you-go basis. Fiber on Demand is a field-proven Fast Ethernet solution with a global footprint, including wide deployments in Asia and South America as well as North America. With Fiber on Demand operators do not need to install new fiber or light up dark fiber, other than on the access link, and they can equip network nodes, hubs and headends with low-cost modules as needed to supply Fast Ethernet paths end to end as new customers are signed on. With Fiber on Demand, cable operators can execute efficiently and quickly on opportunities to provide businesses a full range of advanced telecommunications services that are fully compliant with the Ethernet Services Model formulated by the Metro Ethernet Forum. Fiber on Demand supports the service quality assurance, ease of provisioning and low-hassle customer service operations that are essential to efficient operations in this market. As operators push fiber to fiber-deep levels of node penetration, the cost benefits of Fiber on Demand are multiplied, providing a compelling migration path to high-bandwidth availability wherever demand for such service occurs in the commercial and residential markets. 3

4 Fiber on Demand Opens Cable Path to Higher ROI A MARKET-DRIVEN OPPORTUNITY WITH NEW CHALLENGES The Opportunity The cable industry has enjoyed considerable success in the commercial services market over the past few years, going from piecemeal pursuit of smaller businesses and occasionally large enterprises in select markets to a total commitment that has won credibility for many MSOs as viable competitors to traditional telecommunications providers. But the success to date pales next to the opportunity that still lies ahead. According to Morgan Stanley, while the top five MSOs in 2007 generated $1.9 billion in commercial services revenues, the size of the markets in their service territories, when counting just the small to medium business (SMB) segment, adds up to more than $40 billion. And, of course, many billions of dollars more in potential SMB revenues are in reach of dozens of smaller MSOs. Projections vary as to how large cable s market share will become. Comcast COO Steve Burke told analysts in April 2008 that he anticipated his company would capture 20 percent of the $12-$15 billion SMB market in its service area by Research firm Pike & Fischer predicts overall cable industry revenues from the SMB market will hit $11 billion by Another research firm predicts cable s share will hit 9 percent of the $50+ billion market in Many factors have converged to put commercial services on a fast growth track for cable. Specifically: Cable s customer-responsive approach at the local market level provides an alluring alternative to SMBs who are accustomed to low-priority treatment by telcos. MSOs have built strong professional sales and operations organizations staffed by people with deep backgrounds in business telecommunications services. Extensive fiber buildouts in the modernization of HFC plant have put fiber nodes within last-mile reach of 50 to 80 percent of commercial buildings in metro service areas. Cable s single-pipe advantage packages highspeed data and carrier-class VoIP at steep discounts to the two-line costs of traditional voice and data services. MSOs video service advantage allows them to offer business-optimized triple-play packages that include TV channels suited to business needs. With the wind in their sails the biggest question cable companies face on the commercial services front is whether or not they can cost effectively provide the infrastructure support essential to serving all tiers of the business market, including enterprises at the mid and upper ends of the SMB 4 Figure 1. Willingness of Enterprises to Use MSOs for Commercial Services (Source: Cable vs. Telcos: The Battle for the Enterprise Market, Heavy Reading, February 2006)

5 White Paper 12 scale. With marketing efforts in full sway and an expanding customer base that has grown confident in cable s ability to deliver commercial-class services, infrastructure limitations preventing delivery of services to all potential customers translate into lost revenues and lower ROI. The Challenge When it comes to the smaller size businesses in the SMB block, there is no more costeffective option than to use coaxial access links to leverage the high-speed data and VoIP capabilities of DOCSIS channels. But there are many businesses within easy reach of cable HFC fiber nodes that require services such as transparent LAN, virtual private networks, guaranteed data rates and Ethernet backhaul for which a coaxbased solution is inadequate. Moreover, many small businesses which might need only a multi-line voice service combined with highspeed data are located in multi-tenant buildings where the aggregate capacity needs of tenants outstrip the capacity available on the coax DOCSIS channels. In all these cases a 100 megabit-persecond Fast Ethernet connection provides the bandwidth and support for multiple types of service that these businesses are demanding. Many factors have contributed to cable operators hesitation to market services to these larger SMBs and to office complexes housing smaller businesses. The costs of extending fiber to provide such services top the list. Even in instances where the payoff would easily justify the costs of extending fiber over the last mile to the premises, cable operators often find the fiber counts over their distribution and backbone links are inadequate to provide end-to-end support for fiber-based commercial services. Moreover, prior to the availability of Aurora Networks Fiber on Demand (FonD) solution, fiber access links could not be easily connected to fiber nodes, even if excess fiber was available on the network. Thus, in order to deliver fiber-based service, operators had to install a separate network infrastructure at far higher costs than the business case typically justified. Another inhibiting factor to full-scale market coverage has been operators lack of familiarity with non-docsis-based data services typically supplied via Ethernet transport, which has supplanted ATM (Asynchronous Transfer Mode) as the preferred mode of connectivity for private line, point-to-point and multipoint VPN (virtual private network), transparent and virtual LAN, Internet broadband services and even traditional TDM categories of service, such as mobile backhaul. Compounding the problem has been the absence of cost-effective solutions for long backhaul Metro Ethernet. Reaching into the higher end SMB and enterprise markets also means cable operators must have infrastructure solutions that meet the guaranteed SLA (service level agreement) requirements of the telecom market. Without absolute assurance that fiber infrastructure could be implemented with appropriate fail-over and network management controls to meet these requirements, operators have been unable to compete aggressively for this business. 5

6 Fiber on Demand Opens Cable Path to Higher ROI BREAKING ACCESS BARRIERS WITH FonD All of these barriers can be overcome through deployment of Aurora s FonD technology. Infrastructure issues are resolved with a wide range of innovative, modular solutions that are designed to fit specific deployment scenarios in the most cost effective way possible. And Aurora has strictly adhered to the carrier-class service standards of the Metro Ethernet Forum in its development of Fast Ethernet transport mode for FonD. The Infrastructure Advantage FonD is designed to make use of existing HFC cable infrastructure to the maximum extent possible, thereby minimizing costs of delivering fiber-based Fast Ethernet services over the last mile. Operators can tie FonD Fast Ethernet access fiber into existing nodes using standards-based plugin modules that interface directly with existing distribution fiber, utilizing unused upstream bandwidth to accommodate commercial service return transport and CWDM (coarse wave division multiplexing) or DWDM (dense wave division multiplexing) techniques for transmitting downstream traffic. The FonD unit installed at the headend or hubs serves as the seamless interface between the Fast Ethernet commercial services transport layer and the external Fast Ethernet routing infrastructure, 6 Figure 2. Fiber on Demand offers the ability to immediately deploy applications such as transparent LAN service.

7 White Paper 12 ensuring that the HFC network performs as a transparent conduit for all categories of service defined in the standard Ethernet Services Model VPN, TLAN, TDM over Ethernet, etc. as ratified by the Metro Ethernet Forum. With installation of FonD support modules at the nodes, cable operators position themselves to move quickly in response to incremental demand for services in any given service area. Fast Provisioning The ability to run fiber from a node to a business office without incurring the heavy costs of end-toend fiber overlays enables operators to be more responsive to customer demand for fiber-based services. Once access links are installed, Aurora s state-of-the-art management software allows operators to provision links in a matter of minutes. Quick provisioning is something virtually unknown in telco-based commercial services. To businesses hungry for advanced service support, the MSO s ability to quickly respond can be as important to their purchase decision as the cost savings they achieve by choosing cable. Simplified Service Support Framework Because Aurora FonD has been certified to meet the rigorous multiple service delivery requirements of the Ethernet Services Model, cable operators can confidently move beyond the familiar DOCSIS domain to offer business customers the full range of telecommunications data services they are accustomed to receiving from incumbent carriers. There are no special service-related functionalities that need to be installed in the cable network. Instead, the service-specific features are determined by the types of equipment installed in customer premises, which communicate the required Ethernet routing and QoS parameters to routing points across the large area network. The entire multi-service paradigm is built on the universal Ethernet standard so that operators can Figure 3. FonD includes a powerful suite of element management tools. provide the required levels of customer service support for these types of services without imposing heavy new burdens on their service and operations centers. From a network management standpoint, they can simply focus on maintaining the transparent Fast Ethernet transport flow from FonD-connected end points through the HFC network, which is facilitated by standards-based FonD management tools that interface seamlessly into existing OSS frameworks. Carrier-Grade Service Assurance To expand their opportunities in the higher end SMB segment cable operators must be able to meet stringent SLA requirements, which is difficult to do over a shared access network. FonD, as a dedicated access solution, eliminates this barrier. Equally important, the FonD solution is designed to provide the end-to-end fail-safe redundancy that operators need in order to meet the SLA stipulations of carrier-class commercial services. Aurora provides a portfolio of optical switches that can be positioned at key optical routing points in the HFC and metro cable network to instantly reroute signals in case of fiber cuts or other damage to primary 7

8 Fiber on Demand Opens Cable Path to Higher ROI Figure 4. Aurora's products include a wide array of optical switches for highly reliable route redundancy. conduits. Thus, the operator, by installing switching modules that easily plug into existing network components, can create fully redundant paths between nodes and hubs, hubs and headends, and across all metro backhaul routes. The Backhaul Advantage The power of FonD to expand operators revenue opportunities cost effectively is further enhanced by the fact that Aurora has developed low-cost solutions for Metro Ethernet long backhaul. Aurora offers a wide array of pluggable transmitter options for distribution of Ethernet at distances up to 40 km over CWDM fiber links, allowing operators to use existing fiber for backhaul applications at minimal costs. And for longer distances of up to 200 km Aurora s specialized digital amplification modules can be used to shift the CWDM Ethernet transport signal to a DWDM wavelength over the metro backbone, again without requiring additional fiber. The Aurora FonD Ethernet backhaul solution opens a cost-effective way for operators to satisfy surging demand from mobile carriers for backhaul support between their cellular base stations and switching centers. With the introduction of 3G (third generation) and, soon, 4G services that are driving up data usage on mobile with media-rich applications such as video and gaming, mobile operators need much higher capacity backhaul than their traditional T1/ E1 links provide. But they also require the extremely high performance of TDM technology, where tolerance for jitter and latency is close to nil. Operators can meet this requirement by using Aurora s TDMover-Ethernet backhaul technology, which has been certified to the rigid requirements of the Metro Ethernet Forum s MEF 18 specifications. Used in conjunction with FonD, TDM-over-Ethernet provides cable operators the solution they need to deliver a high-capacity mobile backhaul service that meets carriers high performance requirements at far lower costs than they would otherwise incur using telco fiber. Figure 5. An extensive range of 1310 nm, 1550 nm, and CWDM optics provides flexibility in network design. 8

9 White Paper 12 Support for High-Tier Residential Services Together with providing a low-cost means of expanding service offerings to the higher end of the SMB market, the Aurora FonD solution offers operators a compelling way to meet incremental demand for very high-speed Internet access among SOHO and heavy casual users in the residential market. This is an especially vital opportunity in markets where cable operators are under competitive pressure from all-fiber telco networks to let customers know they can get a 100 Mbps service from their cable provider. As operators have found in promoting their highest broadband tiers in markets everywhere, the percentage of people who actually want 10 or 15 Mbps service has been very low. Yet being able to tout a service that vastly surpasses the speeds typically offered over DSL has been extremely important to cable s broadband marketing success against telcos. While there s no doubt that heavy media usage over broadband coupled with the phenomenon of multiple simultaneous online users in the home is pushing once high-end multi-megabit tiers into the mainstream, operators are likely to find that, when it comes to 50 or 100 Mbps service offerings, the take rates are going to be extremely incremental for some time to come. Yet they must be in a position to offer such services well before demand becomes mainstream. The FonD approach opens a pay-as-you-go migration path to high-tier TV services as well, where a service such as the widely contemplated home-theater first-run movie tier in 1080P HDTV format could be offered over the Fast Ethernet connection as an MPEG-4 IPTV stream. This, too, could help defer costs of introducing an important new service that otherwise would consume inordinate amounts of bandwidth on coaxial plant to serve a relatively low percentage of subscribers. The Fiber Deep / FonD Advantage The deeper fiber goes in the HFC network, the more cost-efficient the FonD solution becomes. With only 125 households and businesses per node service area, the fiber runs are much shorter, resulting in simpler and much lower costs for fiber and its installation. Many operators are deploying Aurora s Fiber Deep solution, including Montreal-based Videotron in the largest fiber deep project yet implemented in North America. Such operators are discovering that the combination of Fiber Deep and FonD offers them the most cost effective way to meet the bandwidth requirements of next-generation services across all segments of the residential and commercial services markets now and well into the future. 9

10 Fiber on Demand Opens Cable Path to Higher ROI TRADITIONAL FIBER COST BARRIERS NO LONGER APPLY Aurora s Fiber on Demand solution positions cable operators to use Fiber to the Premises for serving incremental high-end commercial service and residential needs at far lower costs than have been historically associated with endto-end fiber deployments. Rather than having to add fiber end to end, operators using FonD merely need to draw fiber from the node to the customer as revenue-generating contracts are signed. The solution is much cheaper than cable-optimized RF fiber solutions that require installation of pure media converters at the premises, more extensive fiber layouts and installation of multiplexers, demultiplexers and passive elements in the network. The biggest cost factor in non-cable-based optical networks is construction and fiber, representing about half the costs in the Carnegie Mellon study. Trenching costs are especially important variables affecting construction. And high take rates are essential to cost recovery, with penetration of percent deemed essential to achieving ROI within five years. FonD eliminates trenching and other fiber construction costs associated with all segments of the network beyond the access link. And the low costs of headend, hub and node module installations are amortized across all access links. Thus, the operator is incurring minimal costs to deliver a FonD solution to the first customer in a given service area and continues to lower the overall percustomer costs with each new connection. Operations costs are minimized as well, since the basic maintenance of the network is already factored into the HFC operations costs. Proactive fault monitoring all the way to the fiber-connected premises and the redundancy fail-safe components of the FonD solution further serve to reduce truck rolls and lower operational expenses. Figure 6. FTTH Capital Cost Structure (Source: Banerjee, Anupam, and Sirbu, Marvin. Towards Technologically and Competitively Neutral Fiber to the Home (FTTH) Infrastructure. 2003, Carnegie Mellon University. 10

11 White Paper 12 Figure 7. FTTH Sensitivity Analysis (Source: Banerjee, Anupam, and Sirbu, Marvin. Towards Technologically and Competitively Neutral Fiber to the Home (FTTH) Infrastructure. 2003, Carnegie Mellon University. Aurora s FonD architecture accommodates up to 16 Fast Ethernet channels per wavelength. The modular headend/hub and node components provide operators the flexibility to allocate resources down to the per-premises level in accord with demand requirements as they develop. Components KEY DESIGN ATTRIBUTES OF THE FIBER ON DEMAND SOLUTION The DS4004 Optical Ethernet Multiplexer is a nodebased plug-in module that interfaces with the access fiber and that can support up to four FonD Fast Ethernet links. Up to four of these modules can be installed in any given node, allowing the MSO to deliver Fast Ethernet services to up to 16 customer locations in the service area. The DS4004 modules connect through the existing fiber network to the Aurora NI3030E Network Interface Module, which is a chassis-based module that interfaces FonD service streams with the headend, hub or regional data center WAN routers Figure 8. DS4004 Optical Ethernet Multiplexer Figure 9. NI3030E Network Interface Module A single DS4004 can be installed in Aurora s HFC or Fiber The NI3030E can be installed in Aurora s CH3000 Universal Deep node platforms (as shown here), or up to four DS4004 Chassis at headend and hub sites for both Ethernet transport modules can be installed in a single Virtual Hub node housing. and local or remote monitoring and management of every active device in Aurora s fiber network. 11

12 Fiber on Demand Opens Cable Path to Higher ROI and switches. Each NI3030E module supports up to four DS4004 node modules, which is to say, up to 16 full duplex 100 Mbps dedicated connections to up to 16 customers, for a total aggregate wirespeed throughput of 1.6 gigabits per second. The NI3030E can provision new customer connections from the headend in minutes, as well as being capable of locally or remotely monitoring and managing every active device in Aurora s fiber network via standard SNMP, including nodes, transceivers, and receivers. The Downstream and Return Paths FonD eliminates the need to install new fiber other than between the node and the premises. The solution relies on use of small-form factor plug-in (SFP) modules to create DWDM and CWDM wavelength paths over existing fiber to accommodate the downstream Ethernet service streams from headends to hubs and from there to the nodes. These modules provide a flexible way to equip the network to transport FonD services across relevant segments on an as-needed basis. To minimize costs on the upstream fiber path, rather than requiring a separate wavelength, Aurora s patented digital return technology exploits unused RF capacity on the return fiber, thereby conforming to the way spectrum is allocated on the existing HFC network. The Aurora digital return is designed to support four Fast Ethernet streams within each traditional upstream RF spectrum channel, which allows the upstreams from multiple customer connections to be cascaded together at up to 400 Mbps over the unused capacity on the return fiber. Operators can choose from a wide range of plugin SFP laser modules depending on path distance requirements, thereby conforming costs precisely to network dimensions. Over the standard 1310 nm return wavelength for distances up to 10 km operators can use low-cost FP (Fabry-Perot) lasers, and they can operate at up to 40 km using DFBs (distributed feedback lasers). For longer runs there are CWDM and DWDM options, with a maximum distance of 200 km available with use of optical amplification. CONCLUSION MSOs have established themselves as major players in commercial services, with the market credibility and support staffs needed to serve the full spectrum of business customers in their service areas. By exploiting the multi-service capabilities of Aurora s Fast Ethernet Fiber on Demand platform they now have an opportunity to deliver the complete range of voice and data services that medium and large businesses have come to expect in a standards-based environment that minimizes costs and service complexities. FonD provides operators a way to leverage their existing fiber infrastructures to deliver these carrierclass services incrementally with the SLA guarantees that customers require. The low costs and rapid provisioning advantages afforded operators through the FonD solution open a major opportunity for operators to build ROI in the commercial services market by serving a segment that is hungry for better service at lower prices. 12

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14 Fiber on Demand Opens Cable Path to Higher ROI Aurora Networks, Inc Betsy Ross Drive Santa Clara, CA Tel Fax