residential broadband telephony: how and when sandy teger and david waks system dynamics inc. voice...

Residential Broadband Telephony:How and When

Sandy Teger and David WaksSystem Dynamics Inc.

Voice On the Net Asia 2000November 15, 2000

Copyright © 2000

System Dynamics Inc.

Copyright © 2000 System Dynamics Inc. Slide 2

Focus Of This Presentation

•Residential (including SOHO)– as opposed to business

•Broadband access networks– as opposed to backbone network – Multiple contenders - cable, twisted pair, ...– In-home issues in next session

•Mainly North America perspective– Cable telephony– DSL telephony

•Mainly view of facilities-based access providers– as opposed to other ISPs


“Broadband” Is...

•High Speed– Megabits: Millions of bits per second– … at least in one direction

•Always on– Continuous connection to the outside world

•Bidirectional– High speed from the home as well as to the home– Can “see” the home from the outside


Why Is Broadband Important for Telephony?

•Facilitates telephony competition– Existing telcos, cable operators and electric utilities– New entrants - wireless, satellite, ...

•Broadband access brings digital telephony all the way to the home

•Provides framework for new services– Multi-party video calls– Extension of office PBX– “Follow-me” services– Customer line provisioning

•Allows integration of previously separate services– Seamlessly integrate voice, video and data


Broadband Access Choices

•Many different approaches– Twisted pair (xDSL)– Hybrid fiber-coax cable (cable modem)– Fixed wireless– Satellite (two-way)– Fiber to the home or curb (ATM or Gigabit Ethernet - “GigE”)– Power line– Digital terrestrial

•Differing stages of development and deployment– xDSL and cable leading in North America, fixed wireless

distant third– GigE rolling out in Sweden and being tested elsewhere– First 2-way satellites being deployed now– Powerline testing now

•Most approaches suitable for telephony– Satellite and digital terrestrial are questionable


Factors in Broadband Access Choices

•Population density

•Existing infrastructure (e.g., twisted pair, cable, fiber)

•Government policies

•Competitive and regulatory dynamics

•Technology evolution

Farm

Homes

MDUGigE Fiber

Cable modem

Twisted pair DSL

Satellite

City: High-rise multi-family units

Suburbs: Individual single-family units

Rural: isolated single family unit

Copyright © 2000 System Dynamics Inc. Slide 7Source: Hughes from Pioneer Consulting, 1998

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

50

40

30

20

10

0

LMDSxDSL

SATELLITECABLE MODEMSUBSCRIBERS,

M

Subscriber Forecast

Global Broadband Access


Broadband Over Cable In The United States •Cable passes about 97% of TV households

– 100M households

•Cable penetration stable at about 68%– DTH has stopped cable growth

•Plant upgrades continuing– 62 million North American homes ready for high-speed

data

•High speed data over cable deployed to almost 4 million homes in North America – 6% of homes marketed

•Like any rapid growth sector, some challenges remain


Cable Industry Goals

•Defend video services business against DTH today and others tomorrow

•Enter new businesses - replace lost revenue, keep growing

•Be first to provide all pieces of “the bundle”

Video Data

Analog/digitalPPV/NVOD/VOD

Interactive servicesPC and TV

LocalLong distance

Telephony

Video telephonyVideoconferencing


Cable Telephone Services: The Landscape

•Multiple Markets– Residential - single family– Multiple dwelling units (MDUs)– Business

•Multiple Technologies– “HFC telephony” - Circuit-switched over HFC plant– IP telephony - Packet-switched over infrastructure

deployed for cable modem services

•Industry goals– Add to the “bundle” to promote customer loyalty– Incremental revenue stream


Today’s Circuit-Switched Network

OriginatingCarrier

SS7 Network

Access Network(twisted pair)

TerminatingCarrier


COCO

Inter-ExchangeCarrier

COCO

CO

CO

CO

CO


“HFC Telephony” Provides Alternate Access

OriginatingCarrier

SS7 Network

Access Network(Hybrid fiber-coax cable with “HFC

telephony”)

TerminatingCarrier


COCO


COCO

CO

CO

CO

CO

“Circuit-circuit”


“HFC Telephony” - Technology Platform

•Four major products deployed worldwide– Arris Cornerstone (Antec/Nortel)

– ADC HomeWorx

– Tellabs CableSpan 2300

– Motorola CableComm

•Proprietary and mutually incompatible

Cable Hub Site and/or Headend

HFC distribution plant

Customer Home

Multi-line“voice port”

( or NIU)

Host digitalterminal

Arris InteractiveCornerstone equipment

Class 5Switch PSTN

GR-303or V5.2

(T-1/E-1)


“IP Telephony” Can Provide Alternate Access...

OriginatingCarrier

SS7 Network

TerminatingCarrier


COCO


COCO

CO

CO

CO

CO

Access Network(Hybrid fiber-coax

cable with IP telephony)

IP Gateway

“Packet-circuit”


…And Can Enable “End-to-End IP”

OriginatingCarrier

TerminatingCarrier

Access Network

(IP based)


CO

Access Network(Hybrid fiber-coax

cable with IP telephony)

IP Gateway

Access Network(twisted

pair)

“Packet-Packet”


IP Telephony Overlays The Cable Plant

Local Cable Headend


Customer home

Cable modemor OpenCable

set-top box with PacketCable™

functionality

GatewayCMS(Gatekeeper)

LocalPSTN

PrivateIP Networkwith QoS

RemotePSTN

Remote Cable Headend

Gateway

Customer home


CMTS CMTS

CMS(Gatekeeper)


PacketCable Initiative

•Cable industry cooperative effort– Modeled on success of MCNS/DOCSIS initiative– Under CableLabs umbrella– MSOs work together to agree on and implement common

specifications for a family of products– Vendors part of process (and do most of work)

•Two phases– Phase 1 (Single domain, VoIP access) – Phase 2 (Multi-domain, End-to-end IP)

•Timetable/Status– Started September 1997– Pre-certification field tests 1999-2000– Phase 1 certification and deployment 2001– Phase 2 specification development now under way,

deployment 2002-2003

•Requires DOCSIS 1.1 modems with Q0S– Certification in process


Sources: AT&T Investor Relations; Cable Datacom News, August 1998

AT&T/TCI Cable Telephony Plan (6/98)

•Phase One - Circuit-Circuit: “Early to mid 1999”– Deploy circuit-switched HFC telephony– Scale OSS systems– Gain marketing experience

•Phase Two - Packet-Circuit: “Late 1999”– Local loop bypass with bundled AT&T long distance– Connects from headend into PSTN via 5ESS– Compatible with all CPE, including fax and modems

•Phase Three - Packet-Packet: “By yearend 2000”– End-to-end packet telecommunications– Connect all long-distance IP telephony traffic to AT&T

national packet network


Cable Telephony in North America

Packet-Packet

Circuit-Packet

Circuit-Circuit

Cox

AT&T

Videotron

Comcast

400,000

>100,000


Digital Subscriber Line - A Long Evolution

•xDSL - Digital data over local loop– while preserving existing analog telephony

•Initial trials - Television delivery by telcos

•ADSL deployed for high-speed Internet access– Meet competitive threat from cable operators– Both ILECs and CLECs deploying– Over 1 million residential ADSL subs in US

•Starting to be used for digital telephony– Original thrust by competitive carriers– Bundled with high-speed Internet access– Incumbent carriers now moving in this direction– Targeted on small business market; unclear when it will

reach residential market


VoDSL Provides Alternate Access

OriginatingCarrier

SS7 Network

Access Network(Twisted pair with

VoDSL)

TerminatingCarrier


COCO


COCO

CO

CO

CO

CO


Elements of VoDSL

IAD•Digitizes & packetizes

voice

•Offers data access functions (routing/bridging)

•Connects directly to DSL

Voice Gateway•Converts packetized voice

to PCM stream

•Supports TDM connections to Class 5 switch

•Provides focus for management of voice service

IADxDSL

DSLAMClass 5Switch

VoiceGateway

ISPsData

Access

Packet

Source: Martin Taylor, CopperCom


VoDSL Solution Characteristics

•VoDSL Solution Characteristics– Today supports up to 16 lines of toll-quality voice plus

data on as little as 384 kbps DSL connection– Leverages existing DSL deployments

(both ADSL and SDSL)

•Based on ATM, not on IP– Voice packetization based on native ATM using AAL2

•Why ATM?

– ATM is there: most DSL is ATM-based

– Bandwidth efficiency is much better

– QoS is available and proven

– No security concerns (using PVCs)

– Almost no local service providers looking for a VoIP solution

Source: Martin Taylor, CopperCom


Gigabit Ethernet Over Fiber - B2 in Sweden

•Pure Ethernet for broadband access– Gigabit Ethernet over fiber to each MDU– Ethernet switch in basement– New structured wiring to each apartment– Engineered for 100 Mbps per apartment– Now delivering 7-8 Mbps symmetric

•“IP-centric” approach– High-speed data– IP telephony– IP television (broadcast and on-demand)– Interactive TV

•Competitively priced– Internet access 200 SEK/month (about $20 US or $150 HK)

•Status– Rolling out building by building in Stockholm– High-speed access now, IP telephony and TV in 2001


Two Different Visions of VoB Evolution

Cable and NewEntrants

TraditionalCarriers

End Goal End to end I P ?

Local access VoI P over x VoATM over x

I ntelligence fornew services

PCs, SI P phones andSI P servers

Network-basedsoftswitches

Penetration ofSI P phones

Fast Slow or none

NewApplications

Voice as anintegrated elementwith data and video

New voicefeatures


The “Innovator’s Dilemma” in Action?

•Cable and others building framework for end-to-end IP in belief that it will enable wide range of new applications which can only come from having voice as an integral building block in IP applications

•Telcos seem to be preserving existing infrastructure - circuit switches and ATM, not using broadband to implement IP voice

•“End-to-end IP” could be a “disruptive technology”– Doesn’t threaten existing markets today but could

tomorrow

•High risk to incumbents if new entrants are right

•See “The Innovator’s Dilemma”, Clayton Christensen


How and When

•How– Multiple access mechanisms for broadband telephony – Traditional telcos will use VoATM and circuit switching– New entrants will use VoIP– IP will win

•When– Circuit-circuit now– Will start transition to packet-circuit in 2001– End-to-end IP deployed in volume 2002 to 2003

•But– The future is unknowable

18 Beaver Ridge Road, Morris Plains, NJ 07950-1901

(973) 644-4739 Fax (973) 538-6003

dave @ system-dynamics.com

sandy @ system-dynamics.com

http://www.system-dynamics.com

For More Information:

System Dynamics Inc.


Backup Slides


Some Broadband Acronyms and Definitions

•Cable Operators– Broadband access system: Cable modem + CMTS (cable

modem termination system)– DOCSIS (“Data Over Cable Service Interface

Specifications”) - North American industry initiative for standardized cable modems, led by CableLabs

– MCNS - Consortium of MSOs which funded DOCSIS– OpenCable™ - NA industry initiative for digital set-tops– PacketCable™ - NA industry initiative for IP voice and

video

•Telephone Companies– Broadband access system: ADSL modem + DSLAM (DSL

access multiplexor)– Digital Subscriber Line (DSL)– Asymmetric DSL (ADSL)– UAWG - Universal ADSL Working Group

residential broadband telephony: how and when sandy teger and david waks system dynamics inc. voice...

Documents

data slide

outside slide

questionable slide

global broadband access

cable operators

telephony satellite

david waks system dynamics

cable industry goals