Technology pendulum swings to switched-digital video

Technology pendulum swings to switched-digital video

GEORGE KOTELLY

By formally withdrawing from consideration by the Federal Communications Commission two pending Section 214 applications for the implementation of video dial-tone networks, Bell Atlantic Corp. in Philadelphia has apparently chosen an advanced fiber-to-the-curb network--switched-digital video--over its originally specified hybrid fiber/coaxial-cable approach. (For a detailed analysis of both technologies, see page 36.)

Officials at the regional Bell operating company acknowledge that recent developments in switched-digital video network equipment and technology have driven down costs while boosting performance and availability. Consequently, the telephone company wants to halt, rethink and re-evaluate its video dial-tone strategies and fiber cable networks to achieve optimum economy and efficiency.

In a letter to the FCC, Bell Atlantic Vice President Edward D. Young states that the company plans to file new applications at a future date, the timing and contents of which will depend on the outcome of ongoing rulemaking proceedings on video dial tone and the competition of vendor equipment negotiations.

According to FCC Chairman Reed Hundt, "We think it`s important for the country to ultimately have a common carrier of voice, video and data in the digital world. If Bell Atlantic rethinks its application to come up with a better idea to be that carrier, that`s great for the country."

Bell Atlantic spokesperson Shannon Fioravanti states that the new switched-digital video networks are expected to be an advanced form of fiber to the curb. She asserts that company officials have always viewed hybrid fiber/coaxial cable as an interim technology until switched-digital video costs equalized. "The price points on switched-digital video were coming more into line during this past year as our 214 applications were pending at the FCC," she adds. "Therefore, the cost issue was a key consideration for us to step back and take a closer look at switched-digital video."

On the other hand, industry analysts contend that the telephone companies are postponing their voice network upgrades and new installations because they are perplexed about which new interactive video services to provide, what prices to charge and which fiber-optic architecture to deploy.

According to Katherin Tito, senior industry analyst at the Business Research Group in Newton, MA, "To help assess the market demand for new services and delivery mechanisms, a growing number of telephone companies are testing the economical and technological feasibility of offering interactive network services to their customers. Bell Atlantic`s interest in the switched-digital video architecture is indicative of the experimental state of interactive networks. This is an alternate strategy to deploy a cost-efficient network that will carry an attractive mix of offerings to consumers and result in a reasonable payback horizon to the telephone company."

Comments Larry Yokell, president at Boulder, CO-based Convergence Industry Associates, a telecommunications consultancy, "During the past decade, the telephone companies have either discussed or trialed fiber to the home, fiber to the curb, asymmetrical digital subscriber line and hybrid fiber/coaxial cable. During the past three years, the telephone companies became enamored of hybrid fiber/coaxial-cable technology and its variants.

"Now, the latest rage is to implement a new and improved fiber-to-the-curb concept, known as switched-digital video in certain areas, while acquiring wireless cable operators in other areas where a telephone company wants instant video gratification. Switched-digital video proponents claim the deployment of switched-digital video costs essentially the same as hybrid fiber/coaxial cable and has many technical and reliability advantages. For the moment, Bell Atlantic seems to have bought these arguments."

Technological developments

Several technological developments that most likely influenced Bell Atlantic`s change in network strategy have occurred. Switched-digital video systems are almost identical to telephone networks. In these systems, fiber is deployed much deeper to neighborhood optical nodes than for hybrid fiber/coaxial-cable systems. From the nodes, coaxial cable connects the transmitted signals to each home. In switched-digital video systems, each node serves fewer than 50 homes; in hybrid fiber/coaxial-cable systems, each optical node serves several hundred homes.

Tony Farry, Bell Atlantic`s director of broadband multimedia network implementation in Arlington, VA, says, "Hybrid fiber/coaxial-cable networks only use 750 megahertz. Once you use up that spectrum, you are limited in bandwidth for the long term. The switched-digital video network relieves that constriction. It also saves equipment costs, reduces the chances of failure and decreases long-term maintenance."

However, the switched-digital video approach is no panacea. Some operational problems have not been fully resolved, says Farry. One shortcoming involves degraded network reaction to telephony signals run over coaxial cable. Other problems concern network reconfiguration, upstream traffic spectrum allocation and noise control.

"The switched-digital video network works, but we don`t know what really happens until we put it in the field," Farry adds. "But we do feel that a lot of network problems will be solved with the switched-digital video architecture. When costs and availability of switched-digital video and hybrid fiber/coaxial-cable equipment started to converge, it made sense to look strongly at the switched-digital video architecture as an initial rather than an evolutionary deployment."

Bell Atlantic is expected to wait approximately a year for switched-digital video equipment to become available in production quantities--predicted by analysts to take place in late 1996 or early 1997. Broadband Technologies Inc. in Research Triangle Park, NC, for example, has decreased its switched-digital video equipment costs by 50% during the past year. Other prominent switched-digital video equipment vendors include AT&T Network Cable Systems in Morristown, NJ; Reliance Comm/Tec in Bedford, TX; DSC Communications in Plano, TX; Alcatel Network Systems in Richardson, TX; and Fujitsu Network Transmission Systems Inc. in Richardson, TX.

Faraj Aalaei, senior manager of broadband systems planning at Fujitsu Network Transmission Systems agrees with the move to fiber to the curb. "We have always contended that fiber to the curb is the appropriate architecture for current and future services," he says. "The decision by increasing numbers of service providers to abandon hybrid fiber/coaxial cable for fiber to the curb indicates the direction the industry is taking."

The other regional Bell operating companies are also experimenting with fiber-optic network technologies. Apparently fully committed to the hybrid fiber/coaxial-cable approach are Ameritech Corp. and Pacific Bell. Investigating both approaches are Nynex with one field trial of each technology and BellSouth Corp. with six fiber-to-the-curb trials and one hybrid fiber/coaxial-cable trial. Committed to a deeper penetration of fiber is SBC Communications with two trials of fiber to the curb and two trials of fiber to the home. The leading fiber advocate is US West Inc. with four fiber-to-the-curb trials, two fiber-to-the-home trials and one hybrid fiber/coaxial-cable trial.

In fact, US West has also decided to re-examine its broadband networking strategies. The telephone company has requested the FCC to suspend consideration of its five pending 214 applications for the deployment of video dial-tone services. Gary Ames, US West president and chief executive, says it would be a disservice to proceed with broadband deployment before it receives results from the company`s Omaha, NB, interactive video network trial or until other network investigations are concluded. The Omaha trial involves a hybrid fiber/coaxial-cable network that will start delivering various voice and video services to as many as 50,000 homes this summer.

Remarking on the networking changes made by the telephony industry, Donald L. Dittberner, president at Dittberner Associates Inc., a telecommunications management consultancy in Bethesda, MD, advises, "Bell Atlantic and several other Bell holding companies are moving away from hybrid fiber/coaxial-cable architectures for cable distribution because of the need to focus on more interactive service modality to have even a fighting chance of selling their business case to their boards and major investors. Hybrid fiber/coaxial cable is not as well adapted to the interactive mode as other technologies.

"In fact, it may prove that no technology solution can support the business case for telephone company involvement in cable TV--broadcast or interactive. Telephone companies are not likely to choose and hold to any one direction for cable/video dial-tone for several years to come. There needs to be a clearer definition of interactive services that sufficient subscribers are willing to pay for to permit a specification of the network and terminal facilities required to cost-effectively support the desired programming. Until the whole industry learns a lot more, mass deployment of any cable-related technology by regional Bell operating companies is unlikely to take place."

Bart Stuck, president at Business Strategies LLC, a networking, computer and telecommunications consultancy in Westport, CT, foresees a move to cost-effective products. "The Bell Atlantic and US West decisions (and most likely Pacific Bell--soon) to delay their broadband deployments confirm that U.S. local exchange carriers have realized hybrid fiber/coaxial cable is not as cost effective as new emerging photonic networking technologies. They will find that a 6- to 12-month delay is well worth an assessment of the new product offerings.

"When carriers deploy network infrastructure equipment, they depreciate this equipment typically over 10 to 20 years. Hybrid fiber/coaxial-cable technology is at least five years old, and it will not be cost effective during the next one to two decades. The emergence this year of such cost-effective products as lasers, detectors, Bragg gratings, erbium-doped fiber amplifiers and lithium-niobate external modulators, all of which operate in the 1.5-micron band, strongly suggests that the most cost-effective broadband network technology will be largely photonic rather than electro-optic."

The first plan

The two Bell Atlantic video dial-tone applications, which were filed in June 1994, specified the deployment of hybrid fiber/coaxial-cable technology for more than three million homes in New Jersey, Philadelphia, Pittsburgh, Baltimore, Washington and Virginia. At that time, Bell Atlantic claimed that the hybrid fiber approach was best. Now, however, the company has determined that the switched-digital video architecture pushes fiber deeper into the neighborhood, makes possible a variety of interactive multimedia services, offers more flexibility in installations, increases reliability, decreases maintenance and adapts more easily to upgrades and changes.

Bell Atlantic already has an FCC-approved switched-digital video system in Dover Township, NJ. This system is under construction and will pass 38,000 homes in three years. The first customers will be connected this summer. All the information channels are encoded digitally. Therefore, the system requires set-top boxes. Bell Atlantic is continuing to evolve the Dover installation to the point where it becomes a broadband pipe to homes and offers symmetrical services.

In Dover, the networks have eight homes connected with coaxial cable to an optical network unit. Future node sizes are looking at eight to 32 homes in densely populated areas. Node sizes depend on such neighborhood demographics and living variables as row houses vs. single-family homes, aerial vs. buried installation and population distribution.

According to Bell Atlantic`s Farry, "The next steps include numerous evaluations of equipment vendors; the regulatory environment; the time sequence of operations; submitting 214 applications to the FCC later this year or the first part of next year; analyzing vendor data and costs; and planning new fiber network deployments for late 1996, early 1997."

Farry acknowledges what the market impact will be for the implemention of fiber-to-the-curb technology. "The number of strands we specify per fiber depends on such factors as the particular run, capacity and services. We do anticipate a significant increase in fiber-optic cable deployment with small optical node sizes of eight to 32 homes. We are also aware of the recent shortage of fiber and the recent increase in fiber-optic cable costs. Those factors are continually being analyzed." (For more information on the fiber shortage and the increase in fiber cable pricing, see page 1.)

"There is a real opportunity to move fiber closer to the home, which we believe is the wave of the future," concludes Farry. q

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