1. Copyright © 1996, Bellcore All Rights Reserved Fiber’06 Paul W. Shumate Executive Director Broadband Local Access & Premises Networks NFOEC’96, Denver September 9, 1996

2. Fiber Deployment 1995 FCC Update Total Fiber = 14.4 M miles IXCs: 2.8 M miles, up 8% LECs: 10.9 M miles, up 18% CAPs: 0.8 M miles, up 92% Cable TV, Utilities: N.A. Estimate for 2006 Total Fiber = 110 M miles

3. What’s Needed in 2006? Several forecasts indicate: Backbone: 5X today’s traffic (Erlangs) and 20X today’s bit rate Backbone: 5X today’s traffic (Erlangs) and 20X today’s bit rate Loop: 5X today’s traffic and 100X today’s bit rate, plus heterogeneous traffic Loop: 5X today’s traffic and 100X today’s bit rate, plus heterogeneous traffic

4. (Erlang Mbit/s) Total Throughput Growth in Network Busy-Hour Traffic RACE Analysis for the U.K. 300x 100x 30x 10x 3x 1x 198519901995200020052010 Source: Analysys / RACE, IEEE Commun. Mag., February 1995 Growth 150x 8x (Erlangs) Total Load 2% / month

5. Internet Evolution Growth in Packet Traffic 10 100 1,000 10,000 100,000 197019902000 (Mpackets/mo) Arpanet TCP/IPtransition NSFNetstarts 1980 Source: Richard Binder, Corporation for National Research Initiatives High-capacitytrunksintroduced WWWstarts 10% / month!

6. World Wide Web Growth 120120 100100 8080 6060 4040 2020 0 0 WWW Sites (Thousands) (Thousands) Sources: Sun Microsystems, Wall St. Journal 6/936/9312/9312/936/946/9412/9412/942/952/95 130130 623623 1,2651,265 11,57611,576 27,00027,000 4/954/9510/9510/95 110,000110,000 40,00040,000 30% / month!

7. The Backbone Network Fiber capacity seems on-track Recent WDM up to 40 ’s, TDM up to 40 Gbit/s Recent WDM up to 40 ’s, TDM up to 40 Gbit/s Cost? Cost? Complexity and network management? Complexity and network management? Reliability and increased survivability? Reliability and increased survivability? Switching and power? Switching and power?

8. The Access Network Current options and new initiatives should meet 2006’s needs A dozen choices now A dozen choices now High costs for digital services High costs for digital services Fiber-to-the-home? Fiber-to-the-home? Premises wiring, networking, and automation Premises wiring, networking, and automation

9. Fiber to the Home What’s the Status of Key Issues High cost? High cost? – PONs, loop lasers, Li-ion plastic batteries – MPEG compression – ATM multiplexing – VLSI, other opto, fiber Operational savings quantified (M&P, powering) Operational savings quantified (M&P, powering) Bandwidth needs emerging (e.g., WWW, HQ TV) Bandwidth needs emerging (e.g., WWW, HQ TV) Continued focus outside U.S.; “FSAN” initiative Continued focus outside U.S.; “FSAN” initiative

10. FTTH Can Prove-In Now FTTHLessExpensive FTTCLessExpensive Service Demand Homes Passed per Mile Rural Suburban R. C. Menendez et al. (to be published)

11. The Premises Challenge Residential Gateways and Home Networks Telephone wiring TV, A / V, PC networks Security networks Home automation networks HVAC network AC power network Telco Cable TV Electric utility Satellite antenna RF, MMDS, LMDS antenna “RG”

12. Premises Opportunities By 2006, > 20 M homes rewired By 2006, > 20 M homes rewired – Solves technical issues with digital delivery By 2006, $5B market for gateways By 2006, $5B market for gateways – Fully automated provisioning & testing – Simplify a multi-access environment – Important new home “appliances” Likely new opportunity for fiber Likely new opportunity for fiber