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WHITE PAPER 16 Aurora Networks, Inc. July 2009

Thinking Green Strengthens the Case for Fiber Deep in Cable 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. 5400 Betsy Ross Drive Santa Clara, CA 95054 Tel 408.235.7000 Fax 408.845.9045 www.aurora.com 2

White Paper 16 Thinking Green Strengthens Case for Fiber Deep in Cable Aurora Networks Solution Maximizes Energy Efficiencies while Minimizing Capital and Operating Expenses INTRODUCTION THE CABLE GREEN MANDATE As cable operators intensify their search for efficiencies in energy consumption, operations costs and bandwidth utilization, the case for rapid migration of their networks to Fiber Deep architectures is becoming more compelling than ever. This is especially apparent now that the effort to combat global climate change has become a major priority worldwide. Amid mounting green sensibilities among regulators, industries and the general public worldwide, the cable industry s drive for energy efficiency is not just about saving costs. It has also become a matter of social responsibility, which a few network service providers from both the cable and telco sides have begun to stress in their public messaging and in the specifications they set for new equipment. Fiber Deep architecture stands out as a uniquely advantageous approach for cable operators given that it delivers major efficiencies across all these areas of concern, including net gains to the bottom line, customer satisfaction and corporate standing with the public and regulators. By leveraging existing HFC infrastructure to radically reduce the number of customers served by a single node, Fiber Deep raises the proportion of available bandwidth on a per-household basis, cuts plant power consumption, reduces maintenance costs, lowers the amount of gas consumed in truck rolls and provides cable operators the results they need to take credit for significant greening of their operations. The past year has witnessed emergence of government and public consensus on the urgency of global warming and, with it, an expansion of green initiatives on the part of regulators, institutions and businesses everywhere. Cable operators and network service providers in general are no exception. In growing numbers they are taking proactive steps to reduce energy consumption and to educate their customers on best practices with respect to use and disposal of consumer electronics equipment. And some are making environmental considerations a key part of their equipment purchasing decisions as well. Consumer electronics is an especially high-profile early indicator of the role environmental issues will play in cable operators thinking about their responsibilities and public positioning in the months and years ahead. For example, the Environmental Protection Agency has launched a program known as Energy Star, which rates the energy efficiency of set-top boxes and encourages cable operators, telcos and DBS providers to commit to purchasing Energy Star-qualified terminals. The EPA estimates that energy savings amounting to $2 billion per year could be realized if all set-tops in the U.S. met these requirements. Resulting reductions in green house emissions would equal the annual emissions of 2.5 million vehicles, the EPA says. Working in tandem with these goals, cable interests in 2008 launched the Screen to Green 3

Thinking Green Strengthens the Case for Fiber Deep in Cable initiative with events and dissemination of information educating consumers to the dangers of TVs in landfills and on how to dispose of equipment in an environmentally responsible way. Comcast Colorado took a proactive role in Screen to Green by promoting a Recycling Rally in Denver via messages in bills, on-screen alerts and commercials co-produced with Discovery Communications Planet Green channel. The cable operator also promoted attendance by sponsoring a drawing at the rally with an HDTV set and one-year service subscription as the prizes. One of the early leaders in cable industry efforts to emphasize responsible environmental behavior is Cox Enterprises, which launched its Cox Conserves initiative in 2007. Promoting responsible disposal of consumer electronics equipment is an important part of the effort. But Cox, which has holdings in newspaper publishing and other businesses as well as cable, is also focusing on its own efforts to conserve. The company says it cut energy consumption by 10 percent between 2000 and 2007 while sustaining an annual corporate growth rate of 12 percent, and it says it intends to cut energy consumption by additional 20 percent by 2017. These efforts include use of fuel-efficient vehicles, exploration of solar and other energy-saving technologies and promotion of energy-saving behavior on the part of its 80,000 employees. Network equipment is now becoming the focus of green initiatives as well, most notably through the IEEE s Energy Efficient Ethernet Committee, which is tasked with suggesting ways to minimize Ethernet network equipment power consumption during periods of low link usage. The committee 4 estimates that one percent of all power consumption in the U.S. is attributable to the operations of telecommunications network equipment of all types. It says inefficiencies in Ethernet equipment alone waste up to 5.8 terawatt-hours annually at a cost of about $450 million. These various individual and group initiatives are just the beginning of what is sure to be a groundswell of activity and publicity focused on energy savings in telecommunications. Fortunately for cable operators, deployment of Fiber Deep, arguably the most cost-efficient step they can take toward addressing long-term bandwidth needs, also happens to offer major benefits when it comes to reducing energy consumption, increasing operational efficiency and positioning cable operators as leaders in the greening of telecommunications. This is why Fiber Deep, especially when deployed using the innovations provided by Aurora Networks, has emerged as the logical next step in cable network evolution. From a green perspective, the benefits of Fiber Deep are extensive. In the Aurora Networks architecture extension of fiber to where there is no longer a need for RF amplifiers in the coaxial plant serves to cut the number of active devices in the distribution portion of the network by 70 percent. This results in a 50 percent reduction in power consumption and significant reductions in the maintenance requirements, including truck rolls. Of course, the radical reduction in the number of active devices in Fiber Deep networks has a major impact on other maintenance requirements as well. All told, the savings in plant maintenance and power costs averages out to over $5 per house-

White Paper 16 hold passed per year, based on analysis of field data generated from Aurora Networks Fiber Deep deployments over the past several years. Equally important, Fiber Deep has major implications for the operator s ability to demonstrate significant reductions in energy usage. Analysis shows that a typical Aurora Fiber Deep deployment results in an annual reduction in plant power consumption of about 25.8 kilowatt hours per household passed in comparison to power consumption over an average HFC network. And fewer truck rolls results in significant reductions in fuel consumption and therefore generation of greenhouse emissions. THE GREEN BENEFITS OF FIBER DEEP With Aurora s Fiber Deep platform now widely deployed around the world, there is an abundance of data attesting to the technology s dramatic impact on energy consumption. One example of how this impact has been calculated is summarized in the following tables. This analysis compares a one-year period of HFC operations with a one-year period of Fiber Deep Table 1. Node Maintenance on a network passing 70,000 households. It should be noted that the households passed (HHP) ratio of this particular Fiber Deep deployment averaged 84 per node. Even so, the data amassed by this operator offers dramatic proof of the green benefits to be realized from Fiber Deep. As shown in Summary Table 5, the company reports a net savings of $618,667 in combined costs of maintenance and power consumption for Fiber Deep compared to HFC over the course of one year. This translates to a savings of $619 per mile or $8.84 per home passed. The green impact, in terms of power consumption, is undeniable, with a wattage variance of 185,478 Watts and a savings in kilowatt-hours per year of 1,805,314, adding up to a power cost savings of $234,691 in favor of Fiber Deep. Table 2. RF Active Maintenance 5

Thinking Green Strengthens the Case for Fiber Deep in Cable Table 3. Power Supply Maintenance Table 4. Network Power Costs Table 5. Summary A UNIQUE FIBER DEEP SOLUTION Generically Fiber Deep refers to any number of vendor solutions that serve to extend fiber deeper into the coaxial plant than is typically the case in HFC architectures. However, the Aurora Networks Fiber Deep solution is a unique, widely deployed approach which relies on key innovations, such as Aurora Networks patented digital return path technology, Virtual Hubs (VHub ) and remote optical power balancing, to deliver the highest possible performance at construction costs that are comparable to a typical HFC new build/rebuild. A representative diagram of one portion of a typical Fiber Deep network is shown in Figure 1. The largest Fiber Deep project underway in North America, encompassing the 1.8-million household Videotron network in Montreal, is based on the Aurora Networks platform. This is an especially important indicator of future trends, where, along with new builds and rebuilds, Fiber Deep has become the architecture of choice for the evolution of a state-of-the-art 1,000 MHz HFC network serving a major metropolitan area. Aurora Networks approach to Fiber Deep entails use of existing fiber and coaxial plant to deliver 6

Figure 1. Representative Fiber Deep Network 7

Thinking Green Strengthens the Case for Fiber Deep in Cable signals optically to strand-mounted, environmentally hardened optical nodes that are positioned to eliminate all RF amplifiers and most power supplies. Depending on neighborhood densities, the resulting node service area might serve anywhere from 50 to 200 households. The average benchmark is 125 households. Typically, in a 1,000 MHz plant this configuration results in the provision of 25 megabits per second or more of dedicated narrowcast capacity per subscribing household in the downstream, depending on service penetration and simultaneous usage rates, and about 2.1 Mbps of dedicated capacity per household in the upstream. And because the elimination of RF amplifiers on the coaxial plant serves to expand the potential coaxial capacity to as much as 1.5 GHz, the proportion of dedicated downstream and upstream bandwidth can be significantly increased beyond these ratios. The VHub (Virtual Hub) The linchpin to cost-effective reuse of existing plant to achieve this level of fiber penetration is the Aurora Networks Virtual Hub, a fully operational hub encased in environmentally hardened strand- or pedestal-mounted node housing. Through innovative use of passive optical modules in the downstream and digital multiplexing in the return path this architecture radically reduces the number of active components not only in the coaxial portion of the network but in the optical distribution portion as well. In the Aurora Networks Fiber Deep architecture signals are distributed and returned optically over multiple wavelengths to and from Virtual Hubs using either dense or course wavelength division multiplexing technology (DWDM or CWDM). DWDM, because it allows use of more wavelengths and is compatible with optical power amplification, is the preferred mode, especially in larger cable systems and in any systems where operators will require dedicated service capacity and sufficient light power to support eventual migration of fiber to the home. Fed by as few as two fibers, a Virtual Hub can serve up to 24 optical nodes (or downstream service groups), with four fibers needed if including redundant routes for downstream and upstream signals. A single fiber serving a cluster of up to 12 nodes delivers a unique combination of broadcast and narrowcast channels over two wavelengths to each node with a separate fiber to carry the return signals. The highly compact Virtual Hub, along with housing all the combiners, splitters, redundant switching and other modules, can also accommodate an optical amplifier (EDFA) if needed to maximize the distribution reach of optical signals. Efficiencies in the Downstream In the downstream, the Aurora Networks DWDM platform delivers RF-modulated narrowcast signals in the 1531-1571 nm spectrum window and broadcast signals in the 1565 nm. window to each Virtual Hub. At the Virtual Hub Aurora Networks passive Light-Plex broadcast/narrowcast modules combine each narrowcast wavelength with the broadcast wavelength into separate optical outputs. One combiner can create up to eight such outputs to support delivery of a unique combination of narrowcast and broadcast services over a single fiber to each node or service group. 8

White Paper 16 The VHub can support up to three Light-Plex modules to distribute signals to up to 24 service groups, which, at 125 households per node with four nodes per service group, translates to a service area of 12,000 households per VHub. This unique approach to optically passing signals from the Virtual Hub to Fiber Deep nodes eliminates the need for signal regeneration and RF combining at the hub, as is the norm in HFC or other approaches to Fiber Deep distribution. Upstream Efficiencies A key innovation in this architecture is the technique Aurora Networks has developed to allow the return signals to be combined from all the nodes served by a single fiber link. Rather than employing RF combining at each node, Aurora Networks uses a patented digital return technology which digitally combines or concatenates the signals at each node. At the Virtual Hub each set of concatenated return signals are multiplexed together for transmission back to primary hubs and ultimately the master headend. This approach to delivering return signals not only lowers initial capital costs of field distance limitation / link budget concerns and headend optics; it greatly reduces power consumption on the return path. In addition, with Aurora Networks Digital Return the network is futureproofed; Digital Return can provide sufficient system performance to support DOCSIS 3.0 channel-bonding. Remote Optical Power Balancing and Route Redundancy The Aurora Networks system supports remote optical power balancing at the virtual hubs to maintain precise broadcast/narrowcast ratios across all receivers at the final node points. The Light-Plex s built-in optical power level management capabilities greatly simplify the installation, set up and maintenance of the Fiber Deep DWDM architecture. As operators add new video or data carriers, they can realign power levels remotely via an SNMP interface to an element management system, eliminating the need to coordinate between headend and field technicians. And they can add optical wavelengths without interrupting existing narrowcast services to their subscribers. Cost-effective redundant routing is also essential to a robust Fiber Deep architecture. Aurora Networks unique optical switch, which can reroute signals with very low insertion loss at switching speeds of less than 5 milliseconds, is housed in the secondary headend, eliminating the need for separate switching facilities. The switch can simultaneously protect both forward and return signal flow over the alternately routed fiber. Moreover, remote power level management allows operators to set new power levels to maintain required broadcast/narrowcast ratios over alternate routes that may vary in distance from the primary route. This flexibility in alternative route selection lowers the costs of providing infrastructure support for route redundancy. 9

Thinking Green Strengthens the Case for Fiber Deep in Cable Migration Flexibility Aurora Networks approach to Fiber Deep also serves to cut costs with regard to operators flexibility to configure serving areas in the downstream and upstream differently and to provision for lowcost migration to all-fiber networks. For example, if the upstream segmentation provides a dedicated return path for each 125-household node serving area, but the downstream partitioning of optical signals is designed so that each combination of dedicated narrowcast and broadcast signals is distributed to two nodes serving a total of 250 households. This allows the company to peg its initial costs to actual demand for narrowcast services while holding in reserve the ability to easily move to partitioning of the downstream carriers on a 125-home-per-node basis. Moreover, through use of DWDM, the potential cost of fiber extension to the home can be lowered. By installing EDFAs in the Virtual Hubs and implementing additional wavelengths per service area, it is possible to maximize use of existing infrastructure to deliver signals optically to the premises without having to incur the costs of optical signal regeneration. CONCLUSION Even without the energy savings to be realized with Fiber Deep, operators have every reason to move in the direction of Fiber Deep, given the great service benefits to be gained in the context of the low deployment and maintenance costs associated with the Aurora Networks solution. With the green attributes the case for Fiber Deep will only grow stronger as energy conservation becomes a major strategic priority for cable operators. There is no better way to cost-effectively meet the three inter-related goals of bandwidth efficiency, operations efficiency and energy efficiency. By taking steps now to exploit these immediate benefits operators will also position themselves to greatly reduce the costs and hassles of making the inevitable migration to FTTP. 10

White Paper 16 This page intentionally left blank 11

Thinking Green Strengthens the Case for Fiber Deep in Cable Aurora Networks, Inc. 5400 Betsy Ross Drive Santa Clara, CA 95054 Tel 408.235.7000 Fax 408.845.9043 www.aurora.com 12