HFC vs. FTTH:  Different Technologies Face Off

Background on HFC

HFC networks have been around for decades and they are the technology of choice for CATV Operators. The first systems were 300 MHz one way systems with the second generation providing 550 MHz, then 750 MHz, and now the latest is 860 MHz systems. To place these capacities in perspective, note that a 550 MHz system has the capacity to carry up to 80 Analog channels but it would not have any capacity for digital video. Digital video carrying systems usually need to be 750 MHz or greater in downstream (from the service provider to the home) capacity. It’s only been a decade since Cable companies have been upgrading their plants for two way capability and digital video. Two way is required in order to provide services such as high speed internet or voice. Since HFC systems have always been primarily video delivery platforms the upstream carrying capability and capacity is an afterthought and thus has always been limited to a 35 MHz pipe which represents only 4% of the total bandwidth on the network.

The Future of HFC

The MSOs realized a decade ago that they needed to provide services beyond the traditional CATV in maintaining growth in the revenue stream. Realizing that services such as high speed internet and voice services would be necessary, they began to expand bandwidth, push fiber closer to the customer to increase reliability, and upgrade for two way capability. This retrofit has taken them ten years and billions of dollars. The four main MSOs have most of their networks now with at least 550 MHz and two way capability, and are offering high speed internet as well as digital video and telephone in select markets.

HFC systems have just about reached their potential for delivering reliable, low maintenance broadband services. First let’s understand that the technology of amplifiers, coax, and optics used in HFC has been fully developed and cost reductions via technology manufacturing improvements will be modest. Second let’s realize that the available spectrum for up stream has remained at 35 MHz and unless there are significant retrofits to the networks it will remain at 35 MHz. This unbalance between upstream and downstream creates serious limitations for delivering services that require good upstream performance. Given the limited upstream bandwidth there is a need to always share upstream bandwidth and this places limitations on the available bandwidth for delivering carrier grade voice services. Third, the reliability of an HFC network that has amplifiers, taps, and couplers in the field is always going to be a challenge and the maintenance to keep high reliability and performance is going to be excessive. In summary one can say that HFC networks today have the ability to deliver a triple-play but do not align very well with future services that will require greater upstream bandwidth and reliability at low operational costs. The Cable Operators have a huge hurdle given that they spent the last 10 years investing billions of dollars to retrofit their HFC networks to deliver the triple play but realize that in three to five years from now they might be once again operating a network with limitations, unable to roll out emerging services, have higher operating costs, and lower reliability then competitors who have FTTH networks.

FTTH is here

FTTH has been the utopia of every operator but until recent has been cost prohibitive to deploy in real operations. Over the past two years the industry has seen prices come down to levels that has made people start paying serious attention to the viability of using this technology and some have already accepted the premium and deployed FTTH realizing that the benefits will outweigh the premium. The Operators that use FTTH technology have special business initiatives and are not the typical Cable Operator or Telco. FTTH today has reached costs that compete very well with HFC if you are in the business of providing triple play, high quality, and reliable services. What makes it even more compelling is if you don’t have legacy systems and you are not faced with retrofitting existing infrastructure. FTTH makes perfect sense for those who are starting today.

Why is FTTH the Ultimate System?

FTTH is the ultimate system because it brings unprecedented reliability to the last mile. Realize that the phone companies have been known for high reliability and the cable companies have not, and one needs to understand why this is the case. The reason Phone companies have high reliability is because they do not have active components in the field such as amplifiers. The phone company uses a pair of dedicated twisted wires to deliver voice to the home. Even when the phone company uses optics from their central office to some point in the field, the system in the field is very reliable electronics with battery backup in the event power fails and from there on it is a twisted pair without any electronics in the middle that delivers the voice service. In contrast Cable companies always have at least one and up to 5 amplifiers along the way to delivering the home its service. These amplifiers can fail or degrade and cause service interruption.

Reliability

FTTH is even better than the reliable phone network in that it also has no active elements along the way. It is simply a fiber path from the serving central office or headend to the home. Fiber as we know is more reliable than copper twisted pair and thus will even have greater reliability and quality than copper. The only electronic device is at the customer’s home and it will have battery backup to maintain its reliability. Fiber requires zero maintenance relative to copper or coax cables that will deteriorate with time and the environment. A fiber system is really a zero maintenance network along its fiber path with the exceptions of things like fiber cuts which will bring any network down. The only points of maintenance or failure are either at the headend or the home. These Fiber systems have the ability to monitor the health of the home electronics (ONU) and proactively schedule maintenance to avoid customer trouble reports. Also when an ONU fails it only affects one customer and not an entire group of customers. At the headend, the electronics can be made redundant and are monitored constantly to prevent any outages.

About FTTH Technologies

Fiber is a communications medium that provides for great reach and vast amounts of bandwidth unlike no other medium used today. The state of FTTH technologies is one that provides for a single strand of fiber to leave the headend and be split in the field into typically 32 or 96 fiber strands each serving a home. The splitting is done with passive devices that do nothing more than act as prisms splitting light into various paths which then get carried over it’s own fiber to the homes. These passive devices do not use power, do not have moving parts or electronics, and thus makes them as reliable as a fiber splice in the field. The passive splitting of fiber in the field yields to the name PON (Passive Optical Networks).

The PON systems that have been developed properly provide for a 1550nm transmission carrying all the traditional HFC analog bandwidth of 860 MHz. This is so that a FTTH operator can deliver the same exact services with the same headend and set top boxes used in a traditional CATV operation. This path enables what is called analog service in the clear, meaning that there is no need for a set top box to receive the analog basic CATV service in all the rooms that are wired within the house. This 1550 path also provides for the traditional digital video services, PPV and VOD services as if it was being delivered over an HFC system. The difference here is that the 1550 path over FTTH is much more reliable and provides for much better signal quality. The signal quality of the basic analog will rival any DBS digital signal provided from DBS providers. In addition to the 1550 path, FTTH provides for an Ethernet data path of 10/100 Mbps over the same fiber strand carrying the 1550 path. The data path is sent on 1310 nm wavelength in the downstream direction and 1490 nm wavelength in the upstream direction. In total a single fiber is carrying three paths in three different wavelengths and delivering vast amounts of data to the end user with great quality and reliability. As technology evolves we will be able to utilize the same fiber strand to deliver many more paths and much greater bandwidth than today, even if today it is more than what services require. An important aspect of the Ethernet path is that it has the ability to deliver up to 100 Mbps of constant data rate speeds in a symmetrical fashion. This capability is not possible with an HFC system.

Services

With the FTTH bandwidth and reliability it is now possible to deliver services such as IPvideo, real-time streaming multimedia, gaming, telemedicine, and more. We would be just beginning to tap the potential of a FTTH system bandwidth with today’s services rather than stretching them as we do with HFC.

Voice

Voice services with carrier grade quality have been a great challenge for cable operators mainly because of bandwidth limitations and reliability issues. Voice being a real-time service that is highly sensitive to delay requires what is known as QoS (Quality of Service) capability on the digital transport medium. HFC Cable modem services have just gotten to the state of being able to provide QoS that lends itself for primary grade voice and that is if you take measures in the engineering, construction, and maintenance of the system. Voice service also requires high reliability and again HFC systems need to be engineered, built, and maintained to a high standard in order to stand a chance of meeting the reliability. FTTH on the other hand has the inherent bandwidth, QoS, and reliability to provide voice service with even higher quality and reliability than traditional twisted copper. Many of the PON systems on the market will provide for traditional POTS or VoIP over the Ethernet connection. VoIP is mature enough, and if provided over FTTH and designed carefully will provide voice services of equal or better quality than traditional POTS with the added benefit that it offers enhanced features not available with POTS as well as lower costs.

Internet and Data

High speed internet access is becoming part of every home. In 2004 the US population of online subscribers just crossed the 50% mark of being high speed subscribers. Cable Modems on an HFC system along with ADSL comprise the major percentage of these residential high speed users. ADSL and Cable Modem provide asymmetrical services with typical speeds of 1.5 Mbps and 3 Mbps downstream with upstream speeds of 256 Kbps. These speeds are best efforts and very asymmetrical due to the limitations of the technology and bandwidth available for this service over twisted pair and HFC. The current service is acceptable for the current uses of residential high speed internet but will have limitations when new services get introduced. FTTH provides the capability to deliver up to 100 Mbps of fixed and dedicated bandwidth to every home with the capability to upgrade the system and deliver 1 Gbps. In essence this platform can deliver bandwidth to the residential home equal to that being delivered to the largest businesses over carrier networks such as AT&T, Broadwing, Sprint, MCI, etc. Once the infrastructure is in place to deliver this bandwidth it will be a matter of services to use the bandwidth. New services such as VOD over IP, live events over IP, video conferencing, telemedicine, online gaming and more will be possible. The true distinction in Data services over FTTH versus HFC is in its ability to deliver symmetrical data, the fixed data rates that are achievable versus the best effort in HFC and ADSL, reliability and quality.

Video

There is a great push in development to deliver video over IP because it provides a more efficient mechanism for delivering content. It is the FTTH viability that is creating the confidence to develop these video IP services. IP video requires a huge amount of bandwidth if one is to provide multi-channel broadcast video over IP. Even with Mpeg4 encoding we are looking at about 2Mbps per every regular resolution video channel. Assuming that each home might have at any one time the potential to view four different programs given the number of rooms and residents in any one house, we would require 8 Mbps just for those broadcast channels being watched. Throw HDTV and now you go to 40 Mbps and you quickly realize that you need FTTH bandwidth. The move towards IP video is also being driven by the power of the internet protocol.

Smart Home

We expect that all services (video, voice, alarm monitoring, video surveillance, home appliance control, music, etc.) will be delivered over IP and allow for the creation of an IP centric smart home that will now have one Home Network with all its services integrated, controlled, and served by one network. This Home network will be connected to the service provider’s network via fiber.

FTTP (Fiber To The Premise) the right technology today and in the future….

This paper addresses the common question being asked by builders, land developers, technology savvy consumers, and many others exposed to the broadband services world. Broadband service is now becoming a headline and topic of discussion on a daily basis and associated with this topic is the technology and services that go along with it. What is broadband? Broadband is the term that refers to services or networks that deliver applications requiring more bandwidth (faster speeds) than traditional dial-up. ADSL and cable modem high speed internet are examples of broadband and they have been the catalyst for the incubation, development, and acceptance of services such as online purchasing, and peer-to-peer file sharing. Now that we have all experienced the potential of broadband and see the speed at which it is evolving, we must ask the question of where is it going and what technology it will require to keep the pace of future applications. This question is of special interest to land developers and builders that want to create a special community that will best serve its residents with the most future-proof technology and services. To answer the question of what is the best technology to deploy in Greenfield communities we have to first learn about what is in existence and what is being projected by experts.

ADSL and Cable Modem

Pike & Fisher published that “about 60% of all U.S. homes will subscribe to broadband service by the end of 2007”. Most of these subscribers are served by ADSL and cable modem service through their phone companies or cable companies. Cable modems and ADSL account for the majority of the broadband high speed internet services with the remaining share being provided via wireless service or fiber based services. ADSL is provided over existing phone lines but have limitations in speed and reach. Cable modem is provided using the CATV network. Both ADSL and Cable Modem speeds are typically 1.5 Mbps and can go up to 10Mbps downstream and are typically 256Kbps on the upstream. Both technologies are asymmetrical in that the downstream speeds are greater than the upstream which is severely limited and current offerings do not exceed 1.5 Mbps. An important question is whether ADSL and Cable Modem technologies can keep up with the demands of the future and the unanimous answer is no they can’t. Both of these technologies and services are an afterthought adaptation of an existing network, and thus they were never designed from the beginning to support broadband data. Both of these technologies will suffer the fate as the dial up modem when it peaked at 90kbps. So why do the big giants like Comcast and AT&T use these technologies? The answer is because they have billions of dollars sunk into the ground that they are trying to squeeze as much revenue from before they are forced to retrofit their networks to fiber. AT&T has already started the transition by moving to Fiber To The Node, which limits the amount of copper to only 3,000 feet and the rest is fiber. Verizon has taken a more aggressive approach in that they are simply abandoning their copper network and are replacing it with Fiber To The Premise. Comcast is still holding back because they just finished spending billions of dollars adapting their CATV network to support cable modem service and Wall Street would not be happy to find out that they now plan to scrap that network.

Wireless

Wireless broadband via Wi-fi hot spots has become an important service; especially for business travelers who need internet access on the go. The technology uses unlicensed spectrum, meaning that its power levels are small enough to not warrant FCC intervention for its deployment. This technology is one that straddles the residential personal use and commercial/retail use application. Wi-fi was made to create convenience rather than performance. People use this to create a wireless home network and avoid wiring the house with CAT5. If you ever used one in your home, you have learned that depending on the type of walls and distance you are from your wireless router, your internet speeds will vary greatly. If you want consistent performance and the highest speeds throughout your house, you will want to wire your house with CAT5 cable. This same technology is used in open public areas such as airports, coffee shops, and convention centers where business travelers can quickly and conveniently access their internet at acceptable but not excellent speeds.

There are some city wide deployments of Wi-fi underway and some have even claimed that it will replace wireline broadband. It is important to understand the real motivation for city wide deployments. The real motivation is to create a ubiquitous service that can be accessed by every common resident for free or for a nominal fee. The funding for these networks is speculated to come from the enterprise sector via advertisement or paid-for subscription for the internet service. This is a very risky model and it has not been proven. Even if it is to be successful it will not be able to provide the necessary bandwidth, performance, reliability, or security that is necessary for implementing services such as multi-channel broadcast video better know as CATV. While laboratory experiments and field demonstrations claim that wireless can deliver enough bandwidth for this service, it is only under controlled and optimal conditions. True CATV type video delivery with high quality requires huge amounts of bandwidth with QoS (Quality of Service) control mechanisms that are beyond the capabilities of wireless due to the fact that bandwidth performance is impaired by distance and objects in the line of sight. Wireless is also not as secure a medium as fiber and this poses major obstacles in obtaining carriage rights for premium video sources such as HBO, FOX, Turner, etc. The real application for Wireless is high speed internet access made for convenience rather than performance, and with limited applications such as internet surfing, email, VoIP, and limited video streaming applications. Another application for wireless in for quick deployment in rural areas where the phone company or CATV company do not want to invest money to provide broadband. Also it is important to keep in mind that all wireless stations are connected via fiber to the rest of the world, and fiber connectivity plays an integral part of this wireless solution. A broadband Properties article dated June 2006 states, “We find an enormous amount of synergy between wireless and fiber. The two technologies could not exist without the other. But they do separate things. We are frankly nervous about municipalities making deals for “free” low-data-rate WiFi as a substitute rather than a supplement for true broadband. We also worry about municipalities trying to piggyback public safety tasks on an inherently insecure WiFi network”. Another quote from Jim Hettrick, Director of IT at Loma Linda, in the same article states, “Fiber is a necessity, not a convenience, for the future and fiber is a foundation for a comprehensive infrastructure”.

FTTP (Fiber To The Premise)

After three decades FTTP is finally here and in wide scale deployments throughout the world. The question has never been whether fiber is the best technology but rather how can we afford it. Today it is now affordable and the benefits of capacity, future proof growth, low maintenance, reduced operating expenses, and high performance more than outweigh the small premium paid over traditional copper or coax networks. Fiber has an inherent virtual-unlimited capacity and thus it provides for unforeseen growth in the future. Today’s GPON systems are capable of 2.5 Gbps downstream and 1.25Gbps upstream. This bandwidth is typically shared among 32 subscribers yielding 75 Mbps dedicated speeds in the worst case scenario per subscriber with the ability to dedicate the entire 2.5 Gbps to a subscriber if one chose to do so. In contrast to Cable Modem, ADSL, or WiFi of at most 10Mbps, this is 250 times the capacity. Also, keep in mind that all this capacity is delivered over one single wavelength out of the multiple wavelengths that a fiber can carry. Operationally, fiber implemented in a GPON architecture has no active components in the field and thus it does not require any maintenance. It also has no components that can fail in the field except at the subscriber which limits the outage to a single subscriber in the event of a failure. The current GPON systems also have the embedded triple-play capability integrated into one network, one device, and one management system making for improved operations and customer service.

Today there are more than 1,000 FTTP deployments in the US, equating to more than 4 million homes passed with FTTP. On average there is a new FTTP deployment lit every day in the US, and this number will increase as the trend is exponential. The US is behind Japan and other European countries in the deployment of fiber. Japan is deploying approximately 3 million homes per year. The dominant telecommunications companies in the US have already started their transformation from the old to the new (fiber). Verizon has spent over $4 billion dollars in its first 2 years of deployment and AT&T has committed to spending $2 billion per year on this transformation. Everyone realizes that fiber is the future and the key to delivering the new services that will generate revenue. In a broadband properties article dated January 2007 it states, “This year will see a further increase in the emergence of triple-play business model, and while VoIP will be a key element in triple-play packages, it is broadband video that will make the products viable. Other important applications for 2007 and beyond lie in social networking and broadband e-health, including home-care services for aging populations. But these services can only be fully developed once high-speed broadband networks are widely available, says the Budde report”. Also a report by heavy reading confirms that there is a massive adaptation of fiber throughout the world and that the US is in fact lagging countries such as Japan and Sweden, and within the next 15 to 20 years we will see the old copper and coax networks disappear as they will no longer be able to keep up with the service demands. Some key findings in the report include:

• FTTH growth over the next five years will be dominated by Asia, which will have 69% of the world’s subscribers. The rest of the subscriber base will be split equally between the Americas and Europe/Middle East/Africa Region.

• During the next 12 to 24 months, we will see the emergence of a new broadband “gold standard” of 100 Mbps symmetric, driven by HDTV, next-generation gaming, personal video, and digital photography. This standard will strain the capabilities of VDSL2 and encourage telcos to begin the transition to FTTH.

• GPON is the solution of choice in most Asian countries, but GPON will dominate in the U.S. In Europe, most municipal and utility builders are opting for active Ethernet, which will make it a more important technology there.

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