Carriers solve service needs with hybrid networks
Probe Research Inc.
In today`s telecommunications marketplace, where operating and capital costs have become crucial competitive weapons, U. S. telephone carriers are swiftly installing hybrid fiber/coaxial-cable networks to obtain immediate financial returns.
To the extent that broadband and fiber-in-the-loop network strategies evolved within a regulated monopoly context, the shift to a competitive context for telephone companies has been dramatic. Deluged by an array of conflicting market factors, the telephone carriers have been forced to examine the combined impact of lost market share, declining margins for existing product lines, high price tags for broadband upgrades, and higher operating costs and market size estimates for new services.
In combination, the uncertainties about revenues and the competitive pressures of a free-wheeling marketplace have driven the telephone carriers in a fiber-network/service direction, searching for fast deployment and low cost. For many local exchange carriers, hybrid fiber/coaxial-cable networks appear to fulfill their current service delivery requirements.
This network choice, when added to the earlier commitments by cable-TV companies to the same platform, has established a critical mass of support. Many network architects assert that hybrid fiber/coaxial-cable technology is motivating the telephony carriers to pioneer an array of information services, in a competitive environment, at lower costs than might have been possible using other widely promoted platforms.
Shift to broadband
The dramatic shift in local telephone company objectives for access platforms occurred in 1994, when a majority of local exchange carriers ratified hybrid fiber/coaxial-cable networks as the residential broadband platform. Among the carriers with extensive hybrid fiber/coaxial-cable plans are US West, Pacific Bell, GTE, Southern New England Telephone, Ameritech and Bell Atlantic. Sprint`s local telecommunications division is among those that have not yet made an official announcement, but are strongly leaning to hybrid fiber/coaxial-cable systems.
Still, some local exchange carriers remain on the fence. For example, Nynex Corp., which in the fall of 1994 had not made a firm commitment to a particular broadband access network in its region, chose hybrid fiber/coaxial cable for its network upgrades in Massachusetts and Rhode Island. BellSouth has not chosen a particular architecture either, according to Dan Spears, BellSouth telecommunications science and technology research manager. "We are keeping our options open," he says. Southwestern Bell Corp. is also keeping its options open.
Furthermore, most network architects point out that several cost and technology issues could change the telephony industry`s reasoning. Presently, fiber-to-the-curb networks for plain old telephone service might make sense because voice-over-coaxial-cable technology is still developing, says Spears. But BellSouth`s consideration could change once coaxial-compatible modem technology is widely proven and available, he adds.
Moreover, the fiber-to-the-curb, first-installed-cost curve might dip to the point where it is less expensive than the hybrid fiber/coaxial-cable solution. In addition, the cost for intelligent digital set-top terminals could decline to the point where an all-digital baseband solution would make sense, especially if video-on-demand becomes popular, notes John Boe, US West Communications technical director. "But it remains unclear how services might evolve in the future," he says. "The hybrid fiber/coaxial-cable bus might be the way to go. It`s just not clear."
Hybrid fiber/coaxial-cable technology has proven attractive for a number of reasons, including first-installed cost, role of analog video in the residential marketplace and customer convenience, says GTE spokesperson Dan Smith. For GTE, hybrid fiber/coaxial-cable networks offer adequate bandwidth for all projected residential broadband applications, and it costs less than fiber to the curb, says Smith. "We don`t currently see the need for fiber to the curb," he adds.
But lifecycle costs also play an important role, according to Southern New England Telephone director for network planning Hoshang Mullah. To the extent that analog video is a primary application, hybrid fiber/coaxial-cable technology offers premises equipment-friendly, low-cost transmission. But Mullah also emphasizes lifecycle costs as driving factors.
"Any optical/coaxial bus network avoids some problems of the twisted-pair plant," he adds. These problems include numerous crossconnect locations, the absence of accurate records detailing the use of all wire pairs in a thousand-pair cable, the random nature of damage or moisture ingress into wire pairs, high maintenance costs to find faults, matching wire pairs, and the lack of records addressing problems that have been fixed.
"Most of the (operating cost) savings come from a network that has smart elements and few points of intrusion," states Mullah. In fact, one attraction of a hybrid fiber/coaxial-cable plant using intelligent customer terminals is the ability to monitor the network all the way into the home. In addition to "vital signs" monitoring in optical network units, amplifiers and power supplies, in-home customer premises equipment can provide bit-error-rate readings back to network operations centers.
Based on announcements made by U.S. telephony carriers, hybrid fiber/coaxial-cable capital investments in the United States will be great, representing in excess of $60 billion in local loop spending during the next 10 to 15 years.
The choice of hybrid fiber/coaxial-cable technology initially was made by US West in 1993; the telephone company pledged to deploy the technology throughout its 14-state region. Pacific Bell and Southern New England Telephone followed suit in the first half of 1994; both companies plan ubiquitous hybrid fiber/coaxial-cable deployment within their service territories.
Recently, GTE announced the use of hybrid fiber/coaxial-cable for its network upgrades in St. Petersburg-Tampa, FL; northern Virginia; Ventura County, CA (Thousand Oaks); and Honolulu. GTE`s construction schedule calls for 550,000 homes passed in those communities by the end of 1995. It expects to wire some 7 million to 10 million residences during the next 10 years, completing the build by 2003.
The related investments by the telephone companies are enormous:
Pacific Bell--a $16 billion, seven-year conversion of its entire region to hybrid fiber/coaxial-cable technology, representing 1.5 million homes by the end of 1996, and possibly 5 million homes by the turn of the century.
US West--a $10 billion to $15 billion investment in hybrid fiber/coaxial cable with initial builds in Denver; Minneapolis/St. Paul; Portland, OR; and Salt Lake City--communities of approximately 1 million homes out of 4.4 million territorywide.
Southern New England Telephone--a $4.5 billion, 15-year hybrid fiber/coaxial-cable upgrade will reach approximately 500,000 households during the first three years, beginning in 1995.
Ameritech--will install primarily hybrid fiber/coaxial cable in 134 communities. There will initially be 1.2 million customers, maybe 5 million total--especially in Chicago, Cleveland, Columbus, Indianapolis and Milwaukee. During a 15-year period, the telephone company will spend approximately $4.4 billion to upgrade its networks for video.
Bell Atlantic--will install fiber-to-the-curb, hybrid fiber/coaxial-cable and asymmetrical digital subscriber line architectures. The company plans to have 1.5 million video homes connected by the end of 1995; it looks to add another 1.5 million homes a year, reaching 9 million homes by 2000, spending $15 billion in the process.
Hybrid fiber/coaxial--a local loop access technology--combines the implementation of singlemode optical fiber in the feeder portion of the network (stretching from the central office or cable-TV headend out to an optical network unit or node in a neighborhood) and coaxial cable in the distribution portion of the network (reaching from an optical network unit to a cluster of residences, ranging in size from 80 to 500 living units).
Typically, the network is structured to transport a variety of signals including analog video, digital video and digital information, including 64 kilobit-per-second voice signals and low-speed and high-speed data over a single wiring infrastructure. In some installations, however, hybrid fiber/coaxial-cable networks are integrated with separate subnetworks, which might use separate fibers and optical-network unit locations to transport voice/narrowband/digital traffic (on one fiber) and broadband/video services (on a second fiber). Yet another installation puts all digital traffic on one fiber and all analog traffic on a second fiber.
In an integrated approach, all signals are carried over one or two fibers to the optical network unit. There, the signals are combined on a single coaxial cable that runs approximately 1000 feet to a mile in length. At the tap location or pedestal (curbside, serving four to 32 residences), telephone signals might be routed down a twisted-pair cable, whereas broadband and video signals enter the residence over the coaxial-cable drop. In a less-integrated approach, a fiber-to-the-curb deployment (one optical network unit serving as many as 32 living units) is combined with a parallel hybrid fiber/coaxial-cable overlay to deliver video and other analog signals. US West provides an example of this approach in its latest configuration, which calls for a hybrid fiber/coaxial-cable network with approximately 400 homes served from each video optical network unit, or node.
On the other hand, some carriers, such as Pacific Bell and Southern New England Telephone, for example, have elected to put all in-territory traffic on a single, integrated platform.
What about fiber to the curb?
Ironically, carrier commitments to install millions of hybrid fiber/coaxial-cable access lines may not spell an end for fiber-to-the-curb deployments, even though hybrid fiber/coaxial cable and fiber to the curb are widely classified as competing platforms. Indeed, industry analysts foresee continued experimentation with a variety of hybrid fiber/coaxial-cable platforms, where both hybrid fiber/coaxial cable and fiber-to-the-curb networks coexist.
In some instances, such as high-density urban environments or where business customers are served, fiber to the curb may make sense for new construction, with or without a hybrid fiber/coaxial-cable overlay. What`s more, some carriers may find areas of a plant where an earlier fiber-to-the-curb deployment for narrowband services could require an additional hybrid fiber/coaxial-cable upgrade for broadband capability.
In simple terms, the difference between hybrid fiber/coaxial cable and fiber to the curb amounts to a comparison of the distance a length of coaxial cable travels between an optical-network-unit location and a single customer premise. Especially when coaxial cable is deployed in a passive configuration (without the use of signal repeaters between the optical network unit and the customer`s location), little distinction appears between hybrid fiber/coaxial cable and fiber to the curb in the capabilities area. Whether the optical network unit is placed within 150 feet or 1000 feet from a customer location makes fundamentally no difference when weighing network functionality, at least when the connection is an inert, passive length of cable.
In any event, network architects face the necessity of placing one active network element (the optical network unit) between the customer and the central office or headend; there must be one location where optical energy is transformed into radio-frequency and electrical form, and vice versa. A passive hybrid fiber/coaxial-cable network, in fact, might be thought of as a logical fiber-to-the-curb network, even when the physical topology is fiber to a node, which in turn connects to 120 homes.
The ability to push fiber closer to the customer over time, to accommodate new interactive and symmetrical services requirements, also blurs the distinction between hybrid fiber/coaxial cable and fiber to the curb. Whatever the initial design, hybrid fiber/coaxial-cable architects are retaining the inherent ability to migrate fiber and the optical-network-unit sites closer to the customer over time. Though an early-deployment network might retain the use of a few radio-frequency amplifiers as part of the distribution plant design, virtually all hybrid fiber/coaxial-cable proponents foresee--and desire--a migration to an all-passive network requiring no amplifiers (signal repeaters) at all.
For that reason, it is difficult to predict how long hybrid fiber/coaxial cable might reign as a major access platform, before some other alternative, such as fiber to the curb, replaces it. Indeed, the ability of a hybrid fiber/coaxial-cable platform to migrate fiber closer to the customer over time makes an abrupt technology transition unnecessary, argues Mullah. "Fiber to the curb is fiber to `a` curb, not `the` curb, somewhere in the neighborhood," he says. "Fiber to the curb is aggressive hybrid fiber/coaxial cable," he adds. So, to the extent that hybrid fiber/coaxial cable is positioned as an "interim" technology, it is by no means clear what span of time that represents. Hybrid fiber/coaxial cable represents "the lowest-cost getting-started" technology, according to Nynex director of access technology, Tom Jurus.
But just how long a lifetime hybrid fiber/coaxial-cable technology may have depends partly on customer demand for new interactive services that will require greater packet-switched data access, as well as symmetrical bandwidth. High demand will require a network featuring fiber far closer to the customer, possibly to the curb. On the other hand, if customer demand for broadband services consists largely of entertainment video, including cable-TV-type services and movie-on-demand, then hybrid fiber/coaxial-cable designs are a longer-term solution. Also, says Jurus, continued developments in video compression technology, which allow more efficient use of available copper-based bandwidth, also tend to lengthen the time hybrid fiber/coaxial-cable networks remain viable.
In other installations, network architects may attempt to meld hybrid fiber/coaxial-cable designs, used primarily as a conduit for high-bandwidth services, with fiber to the curb, used primarily for switched narrowband traffic. This approach has been taken by US West, for example, in its early upgrades.
Indeed, carriers may evolve "four or five unique architectures," says Antec executive vice president Andy Paff. One approach involves putting intelligent customer premises equipment inside a customer`s home or at curbside to serve eight to 16 residences. In some networks, twisted-pair cable might be left in place to provide a conduit for customer-premises-equipment powering. In other networks, a hybrid drop might suffice. In yet other networks, separate fibers might carry broadband and narrowband traffic. Lastly, in some networks, all traffic will be carried over one physical medium. Bell operating companies might even use different hybrid fiber/coaxial-cable architectures inside their original operating territories than those they use out of territory, says Paff.
Nevertheless, local exchange carriers appear to have swung in the direction of hybrid fiber/coaxial-cable architecture. "This is fiber in the loop," says Jack Reily, ADC Telecommunications vice president and general manager, access platforms. Carriers might start with optical serving areas of 500 homes, but will migrate over time to clusters of maybe 100 homes, to boost the amount of return bandwidth, he says. "I don`t see hybrid fiber/coaxial-cable designs running out of gas." Cable-TV and local-exchange-carrier executives tend to concur that fiber to a passive coaxial distribution network offers as much flexibility as is likely to be needed.
"We like fiber to passive coaxial architectures with about 80 homes as the cut-off" for customer locations served by any single optical network unit, says Northern Telecom Inc. associate vice president, Stephen Fleming. Though shrinking the size of the serving area is a key technique for boosting return bandwidth, there are "diminishing returns" as the serving area size shrinks toward the fiber-to-the-curb model, he says.
Ironically, even in advance of widespread hybrid fiber/coaxial cable or fiber-to-the-curb deployment, carrier thinking has begun to swing toward a world in which bandwidth and processing power are no longer fundamental constraints. "One can assume that transport is a commodity, with marginal pricing," says Bellcore member of the technical staff, Stewart Personick. Emphasizing that point, Fleming argues that "memory is free today. CPUs are on the same curve, only five years delayed. Bandwidth will also be free."
Easing the constraints
Fiber-to-the-home platforms were generally seen as the local-exchange-carrier access choice throughout the late 1980s. Then, fiber-to-the-curb surged to the forefront in the early 1990s as carriers grappled with the uncertainties of market size for new services, dictating a measure of caution about new broadband investments. Network architects, unwilling to gamble heavily on a near-term fiber-to-the-home strategy based strictly on support for narrowband telephone service and hindered by a restrictive regulatory environment from plunging headlong into video services, switched their focus on less-expensive curbside solutions.
Interim copper technologies such as asymmetrical digital subscriber line also received close scrutiny, especially after video compression techniques became practical in the late 1980s. In part, the feasibility of using video compression techniques dramatically changed the economics and capabilities of copper media in the access loop, much as pair-gain technologies earlier had been used to boost the throughput of wire pairs.
Asymmetrical-digital-subscriber-line technology offered the promise of a near-term video solution, at least at loop lengths to 12,000 feet using in-place twisted-pair cable. (Widespread 18,000-foot deployments remain impractical.) But carriers now tend to reject that approach. "Asymmetrical digital subscriber line is a high-cost, low-functionality approach. It just doesn`t make sense," says Nynex`s Jurus.
But video compression technology also changed the capabilities and throughput of other platforms as well, ranging from satellite and terrestrial microwave to cable-TV. It might permit these platforms to realize transmission bandwidth increases of four to 10 times the current limits, without additional spectrum allocations.
Hybrid/fiber coaxial cable
The effects of several unrelated technology advances proved especially interesting for networks using coaxial cable. Beginning in 1988, cable-TV operators, for example, pioneered methods for transmitting analog video on optical fiber, thereby overcoming the reliability and image quality problems caused by networks using only coaxial cable. In fact, the availability of moderately priced optical transmission dramatically increased the value and usable bandwidth of the remaining coaxial cable employed to cover the last mile or so between the optical network unit and a customer location. Once bulk signal transport had been converted to optical format, it became viable--technically and financially--to use 750 MH¥or more forward bandwidth on the coaxial portions of the network, though this transport had been impractical in the past.
In addition to optical fiber, stunning advances in signal compression meant that networks once capable of delivering 110 channels to a residence now were capable of delivering several hundred channels. New Bell Atlantic video dialtone networks, for example, will provide 384 digital video and 70 or so analog video channels.
Other developments, including major local loop competition, have also affected carrier thinking.The emergence of the US West/Time Warner and BellSouth/Prime Cable alliances, as well as the brief Southwestern Bell foray into Bell Atlantic`s backyard (with the purchase of two cable-TV systems), sharply highlight the looming divergence of major carrier interests in wireline and wireless areas. This has occurred despite the failures of highly touted telco/cable-TV company megamergers, such as the scuttled Bell Atlantic/Tele-Communications Inc. combination and the derailed Southwestern Bell/Cox Cable joint venture.
These partnerships point to a hyper-competitive world where LECs will be competing against other LECs, competitive access providers, cable-TV companies, interexchange carriers, specialized mobile radio companies, personal communications providers and low-earth-orbit satellite and cellular carriers for broadband network services.
The mad scramble by cellular carriers to reposition themselves in the wake of the AT&T-McCaw Cellular combination is the wireless counterpart to the intense maneuvering by the Bell operating companies.
Gary Kim is senior vice president at Probe Research Inc. in Cedar Knolls, NJ.