Emerging services favor new architectures
Emerging services favor new architectures
The fiber-to-the-passive coaxial cable network architecture would prove cost-effective in providing high-bandwidth services--provided a demand exists.
By DONALD T. GALL and MITCH SHAPIRO
Last month we described a "fiber-to-the-passive coax" (FTPC) variation of the hybrid fiber/coaxial-cable network (HFC) architecture that offers several key advantages in a "greenfield" situation.
To put the capacity advantages of an FTPC architecture in perspective, let`s compare it to an HFC network likely to be deployed by a cable operator. The latter will typically include an upstream frequency band of 5 to 40 MHz, with 40 to 550 MHz used to deliver analog broadcast channels and 550 to 750 MHz for some mix of digital broadcast services, VOD, high-speed Internet access, and other new services. Assuming that each optical node serves roughly 500 homes via three coaxial feeder legs, then the 35 MHz of upstream capacity and the 200 MHz of "digital" capacity is shared by about 165 homes on each coaxial leg. Ignoring spectral inefficiencies caused by ingress, etc., this total equates to 212 kHz of upstream capacity and 1.2 MHz of downstream "digital" spectrum per home.
In addition to deploying fiber deeper and having smaller optical serving areas, a greenfield FTPC network also enjoys extra flexibility in terms of spectrum usage since, unlike an incumbent`s cable network, it does not have to deal with a legacy analog service. So, an FTPC network could allocate the same 750 MHz quite differently. For example, it might use an expanded 5- to 130-MHz band for upstream signals, 130 to 250 MHz for delivery of 120 to 200 channels of "broadcast" digital video services, and 250 to 750 MHz for "dedicated" digital services delivered to televisions, PCs, and perhaps other devices.
If we assume this FTPC network has a fiber-serving area of 75 homes on three coaxial legs, each leg could support 5 MHz of upstream capacity and 20 MHz of dedicated downstream capacity per home. This total is more than 23 times the per-home upstream capacity and nearly 17 times the downstream capacity calculated in the above "incumbent HFC" example.
Growing appetites for bandwidth
Market segments that might be targeted by FTPC networks include consumers, telecommuters/home offices, and small businesses. While none of these market segments have historically been heavy users of "nonbroadcast" bandwidth, all are quickly acquiring megabit-grade appetites and could together drive enormous future demand for both downstream and upstream bandwidth.
According to 1998 research by International Data Corp. (IDC--Framingham, MA), the number of U.S. households with home offices is roughly 37 million. Of these, more than 26 million (71%) have PCs and nearly 18 million (47%) have access to the Internet. While the total home office number increased only 7.5% from 1997 to 1998, the Internet-linked group experienced annual growth of 45%. The telecommuter population, according to New York-based Cyber Dialogue, reached 15.7 million in July 1998 and is expected to reach about 18 million in 2000. JALA International (Los Angeles, CA), which specializes in the telecommuter market segment, expects to see 23 million telecommuters by that time.
According to Access Media International (AMI--New York City), the nation`s seven-million-plus small businesses (those with fewer than 100 employees) spent more than $1600 per month on telecommunications and information-technology products and services during 1997, for a total of $138 billion annually. Of this, nearly half ($775 monthly per business and $66 billion total) was accounted for by local and long-distance phone service. While AMI estimates that 77% of all small businesses had PCs in 1997, only 35% had Internet access, 20% operated a local area network (LAN), 13% had a Web site, and 8% made use of high-speed lines.
Analysts expect small businesses to aggressively embrace the Internet in the next several years. AMI, for example, projects the number of small businesses with Web sites to more than double from 2.4 million in 1998 to 5 million in 2002, with small-business Web-site spending more than tripling during the same period from $4.1 billion to $12.7 billion. The dollar value of e-commerce conducted by small businesses, according to AMI, will expand from less than $10 billion this year to $50 billion in 2002. The research firm also sees strong demand for broadband upstream capability in the small-business market. In a 1997 survey, it found that 54% of small businesses with Internet access felt that broadband upstream capability was at least "somewhat" useful--a percentage that can only grow higher as multimedia content and services continue to penetrate the Web.
Residential users are also coming to recognize the value of a high-speed upstream link. For example, an AMI study of cable modem trial subscribers found that 57% considered a high-speed cable modem return (as contrasted with a relatively slow telephone return path) either important (19%) or very important (38%). AMI also discovered that these trial users were quickly embracing high-bandwidth applications. On average, it found usage levels of 1.2 to 1.6 hours per week for a range of high-bandwidth applications, including exchanging photographs (1.2 hours per week), viewing video clips (1.3 hours per week), real-time document sharing (1.4 hours per week), videoconferencing (1.5 hours per week), online gaming (1.5 hours per week), and remote LAN access (1.6 hours per week).
Already, the cable industry is running into problems supporting the bandwidth appetites of cable modem subscribers--especially those that are heavy users of audio and video streaming technologies such as RealNetworks` RealPlayer. In response to this growing demand, @Home decided to limit individual Web-streaming sessions to 10 minutes to avoid overloading its network with streaming traffic. This problem is likely to get only worse, since RealNetworks` new streaming technologies support even higher bit rates (100 kbits/sec to 1 Mbit/sec) than before and should spawn new streaming content and services designed to take advantage of these higher bit rates.
At the high end of the video-streaming spectrum are VOD systems that deliver movies, sports, and other programming to TV sets at MPEG-2 bit rates ranging from 1.5 to 6 Mbits/sec. Several years ago, the cost of VOD servers and related equipment led cable operators and telephone companies to abandon their VOD plans. Today, however, declining equipment costs have fueled a resurgence of interest among cable operators, VOD service providers, and equipment vendors. Asymmetrical in nature, VOD could put extremely heavy demands on available downstream spectrum if it becomes a high-penetration, high-usage service. This burden will be magnified further to the extent that consumers and VOD programmers embrace the newly introduced and extremely bandwidth-intensive high-definition TV formats.
Growing videoconferencing market
Videoconferencing is another bandwidth-hungry service that, because it is symmetrical in nature, is likely to be especially challenging in terms of upstream capacity The videoconferencing market has been growing 48% annually from a base of $1.1 billion in 1995, according to the Gartner Group (Stamford, CT). Frost & Sullivan (Mountain View, CA) sizes the market even more aggressively, at $2.9 billion in 1995, nearly $10 billion in 1998, and forecasted to reach $35 billion by 2002.
According to IDC, the number of business and consumer videoconferencing units were roughly equal in 1997, at 250,000 units each. Looking forward, IDC sees the number of business units expanding at a healthy clip to 600,000 in 2001. But this growth is dwarfed by a skyrocketing consumer market that IDC expects will reach 5.4 million units by 2001. Helping to fuel growth on the consumer side will be the availability of very low-cost PC-based hardware and software. Already today, Microsoft`s NetMeeting is available free with its Windows operating system, while competing software such as White Pine`s CU-SeeMe and Intel`s Proshare are packaged with hardware (cameras, PC cards) at current prices in the $150-to-$200 range. At the same time, some Internet service providers are beginning to host multi- person videoconferences at prices around $5 per hour per participant.
Given the rapid pace of development in PC hardware and software, it seems likely that PC-based videoconferencing systems will experience rapid improvement in their ability to support the level of quality (frame rate, resolution, and picture size) that can fuel the demand levels forecasted by IDC for consumer videoconferencing. That, in turn, could drive dramatic increases in demand for downstream and upstream capacity in residential networks, a dynamic likely to favor operators that can support such expanded traffic levels cost-effectively and reliably.
Though it can be argued that the growth of these emerging markets will not unfold as the more bullish forecasters predict, there is no ignoring the explosive Internet traffic and frenzied development of Internet protocol-based digital networks, services, and content. Together, these trends suggest that an operator able to provide the lowest-cost, most reliable broadband links to end-users will be well-positioned to capture market share in whatever new services the market does embrace. For those enjoying the flexibility provided by a greenfield situation, FTPC appears to provide an attractive option. q