residential broadband telephony: how and when sandy teger and david waks system dynamics inc. voice...
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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
Copyright © 2000 System Dynamics Inc. Slide 3
“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
Copyright © 2000 System Dynamics Inc. Slide 4
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
Copyright © 2000 System Dynamics Inc. Slide 5
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
Copyright © 2000 System Dynamics Inc. Slide 6
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
Copyright © 2000 System Dynamics Inc. Slide 8
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
Copyright © 2000 System Dynamics Inc. Slide 9
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
Copyright © 2000 System Dynamics Inc. Slide 10
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
Copyright © 2000 System Dynamics Inc. Slide 11
Today’s Circuit-Switched Network
OriginatingCarrier
SS7 Network
Access Network(twisted pair)
TerminatingCarrier
Access Network(twisted pair)
COCO
Inter-ExchangeCarrier
COCO
CO
CO
CO
CO
Copyright © 2000 System Dynamics Inc. Slide 12
“HFC Telephony” Provides Alternate Access
OriginatingCarrier
SS7 Network
Access Network(Hybrid fiber-coax cable with “HFC
telephony”)
TerminatingCarrier
Access Network(twisted pair)
COCO
Inter-ExchangeCarrier
COCO
CO
CO
CO
CO
“Circuit-circuit”
Copyright © 2000 System Dynamics Inc. Slide 13
“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)
Copyright © 2000 System Dynamics Inc. Slide 14
“IP Telephony” Can Provide Alternate Access...
OriginatingCarrier
SS7 Network
TerminatingCarrier
Access Network(twisted pair)
COCO
Inter-ExchangeCarrier
COCO
CO
CO
CO
CO
Access Network(Hybrid fiber-coax
cable with IP telephony)
IP Gateway
“Packet-circuit”
Copyright © 2000 System Dynamics Inc. Slide 15
…And Can Enable “End-to-End IP”
OriginatingCarrier
TerminatingCarrier
Access Network
(IP based)
Inter-ExchangeCarrier
CO
Access Network(Hybrid fiber-coax
cable with IP telephony)
IP Gateway
Access Network(twisted
pair)
“Packet-Packet”
Copyright © 2000 System Dynamics Inc. Slide 16
IP Telephony Overlays The Cable Plant
Local Cable Headend
HFC distribution plant
Customer home
Cable modemor OpenCable
set-top box with PacketCable™
functionality
GatewayCMS(Gatekeeper)
LocalPSTN
PrivateIP Networkwith QoS
RemotePSTN
Remote Cable Headend
Gateway
Customer home
HFC distribution plant
CMTS CMTS
CMS(Gatekeeper)
Copyright © 2000 System Dynamics Inc. Slide 17
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
Copyright © 2000 System Dynamics Inc. Slide 18
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
Copyright © 2000 System Dynamics Inc. Slide 19
Cable Telephony in North America
Packet-Packet
Circuit-Packet
Circuit-Circuit
Cox
AT&T
Videotron
Comcast
400,000
>100,000
Copyright © 2000 System Dynamics Inc. Slide 20
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
Copyright © 2000 System Dynamics Inc. Slide 21
VoDSL Provides Alternate Access
OriginatingCarrier
SS7 Network
Access Network(Twisted pair with
VoDSL)
TerminatingCarrier
Access Network(twisted pair)
COCO
Inter-ExchangeCarrier
COCO
CO
CO
CO
CO
Copyright © 2000 System Dynamics Inc. Slide 22
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
Copyright © 2000 System Dynamics Inc. Slide 23
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
Copyright © 2000 System Dynamics Inc. Slide 24
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
Copyright © 2000 System Dynamics Inc. Slide 25
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
Copyright © 2000 System Dynamics Inc. Slide 26
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
Copyright © 2000 System Dynamics Inc. Slide 27
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.
Copyright © 2000 System Dynamics Inc. Slide 29
Backup Slides
Copyright © 2000 System Dynamics Inc. Slide 30
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