1. All rights reserved © 2005, Alcatel, IBSI 2005 APPA Community Broadband Conference Operating an HFC Network? How is FTTH in Your Future Mark Klimek Alcatel  919-850-6554  Mark.Klimek@alcatel.com Bill Lee IBSI  215-354-1604  blee@ibsionline.com

2. All rights reserved © 2005, Alcatel, IBSI Page 2 Overview  HFC Network-Bandwidth Usage  Future Services  HFC to FTTH - Determining When to Convert  HFC to FTTH - A Case Study  Top 4 Reasons for FTTH

3. All rights reserved © 2005, Alcatel, IBSI Page 3 HFC Network-Bandwidth Usage  80 Analog Channels (500 MHz)  120-160 Digital Channels (100 MHz)  High Speed Data Channels (18 MHz)  Video on Demand Channels (30 MHz)  High Definition Channels  8 Off Air HD Channels (48 MHz)  8 Satellite HD Channels (48 MHz) Total Bandwidth Usage: 744 MHz

4. All rights reserved © 2005, Alcatel, IBSI Page 4 Future Services  Voice over IP  Gaming (MMDS, Interactive, etc.)  Network PVR  Security  Distance Learning  HD VoD  Other Services not yet conceived

5. All rights reserved © 2005, Alcatel, IBSI Page 5 HFC to FTTH-Determining When to Convert?  Existing Network  System Size  Customers/Subscribers  Services Offered/Planned  Construction (Make Ready)  Upgrade  Rebuild  New Build  New Deployment

6. All rights reserved © 2005, Alcatel, IBSI Page 6 HFC to FTTH- A Case Study (HFC)

7. All rights reserved © 2005, Alcatel, IBSI Page 7 HFC to FTTH-A Case Study (proposed FTTH migration)

8. All rights reserved © 2005, Alcatel, IBSI Page 8 HFC to FTTH-Things to Consider  Proper sizing of HFC network early on - Critical  Case Study was from Node+0, Node+1 HFC (125 HP)  6 fibers to each node  Nodes replaced by Fiber Enclosure (splitters)  Split into 32 (64-GPON) home pockets  Port utilization  Majority Overlash is with 24ct fiber

9. All rights reserved © 2005, Alcatel, IBSI Page 9 Top 4 Reasons for FTTH  Future-Proof Network  Same network for business & residential customers  Protection from Competition  Avoid Make Ready Work

10. All rights reserved © 2005, Alcatel, IBSI Page 10 What is a Passive Optical Network (PON)?  Physical point-to-multipoint fiber connection  Passive splitters split feeder fiber  Multiple drops connect end users  Outside plant requires no power, low maintenance  PON is an end-user technology optimized for the mass scale Glass splitter CO Customer  Three models of PON available today:  Broadband PON (BPON)  Gigabit PON (GPON)  Ethernet PON (EPON) (also called Gigabit Ethernet PON, GEPON)

11. All rights reserved © 2005, Alcatel, IBSI Page 11 Standards Comparison Overview

12. All rights reserved © 2005, Alcatel, IBSI Page 12 Service Support With GPON  Voice Service  POTS to Class 5 switch (requires voice gateway)  POTS directly to softswitch (usually SIP or H.248)  Via Ethernet with SIP-phone  Data Service  High-speed Internet (HSI) service –Prioritized and differentiated service capability  DS-1 / DS-3 Service –Circuit based services including “Specials” –Use TDM over Packet (CESoIP) technology  Video Service  IPTV –MPEG2/4, Ethernet transport, IGMP signaling  RF video –Analog + digital RF-based, same as CATV operation

13. All rights reserved © 2005, Alcatel, IBSI Page 13 PON Components  Packet Optical Line Terminal (P-OLT)  Located in headend / central office  ATM or Ethernet switch  Sources PONs (typically 40-80 PONs per OLT)  Optical Network Terminal (ONT  Equipment at customer location  Optimized for application and number of interfaces  Video OLT (EDFA)  Video amplifier, power sized for PON outside plant  Used for RF video only; same model as CATV  WDM  Used to merge the data and RF video paths on fiber  Splitter  Optical devices that allow multiple users to share the single fiber

14. All rights reserved © 2005, Alcatel, IBSI Page 14 Typical GPON Deployment Voice, data and video (bi-directional) for up to 64 subscribers over a single fiber Coarse WDM supports 2 or 3 wavelengths — 1490/1310/1550 nm 2.5G/ 1.2Gb/s line rate over two wavelengths – RF video is independent 20 km (12.4 mi.) span 20 km (12.4 mi.) 1,550 nm 2.5 Gb/s 1,490 nm 1,310 nm Splitters V-OLT (EDFA) P-OLT Management System Central Office or Headend Fiber Distribution Passive Outside Plant 1.2 Gb/s RF Video ONTs WD M HSI, DS-1 Voice IP Video RF-Video Source

15. All rights reserved © 2005, Alcatel, IBSI Page 15 Outside Plant Parameters Will be evaluated for a PON deployment Should be taken into account in an HFC deployment if considering PON for future Topology  Centralized vs. distributed splitting Splitter variables  Optical loss Split ratio  1:16 / 1:32 / 1:64 Distance  1-20km Optical Budget  Typically 28dBm  FEC extends digital path reach  RF budget varies with analog / digital channel mix, EDFA power level

16. All rights reserved © 2005, Alcatel, IBSI Page 16 Alliance Feeder OSP Cable From CO / Headend Fiber Distribution Hub (FDH) Splice Case Distribution Cable Access Terminal TAP- Terminal Access Point Drop Cable ONT FTTU Outside Plant Similar to HFC OSP architecture

17. All rights reserved © 2005, Alcatel, IBSI Page 17 Operational and Maintenance Costs Maintenance costs can differ significantly between fiber and copper technologies  PON is passive from the CO/headend; no nodes to maintain and power  Fiber splices have longer lifetimes than copper joins  No corrosion issues with fiber Operational costs also differ  GPON designed to deliver triple-play services  The ONT is a very intelligent device at the user premise –Full enable/disable control of each service –Management, measurement and statistics for operations and marketing  End-to-End management is standardized via the OMCI reducing provisioning time, allowing inter-operability, and simplifying testing Industry estimates of the OPEX cost savings of a fiber deployment over a copper deployment range from 20% - 50% annually  When factored into a business case, this is a significant saving

18. All rights reserved © 2005, Alcatel, IBSI Page 18 HFC to PON: How to Transition? Cap and grow:  Transition from HFC to PON  Complete build of areas covered by HFC nodes  Begin deployment of PON in new areas  Challenge: Can only offer HFC-level capabilities on higher performance PON  Benefit: Do get benefits of reduced operational and maintenance expenses Overbuild / replacement  Replace existing HFC plant with PON  Allows ubiquitous service offering to all customers  Gains of operational and maintenance expenses  Challenge will be to depreciate / payoff HFC equipment Likely scenario is a combination of both models  Retain existing HFC as long as possible  Begin deployment of PON as soon as possible  Overbuild high take rate or areas challenged by competition

19. All rights reserved © 2005, Alcatel, IBSI Page 19 GPON Replacing HFC in Field Splitters Replace active HFC node V-OLT (EDFA) Could reuse if power level is appropriate P-OLT replaces CMTS Management System ONTs WD M (new ) HSI, DS-1 Voice IP Video RF-Video Source Splices, additional splitters or homerun fiber Distribution fiber could be reused. Need to size it correctly during HFC build Drop fiber to replace coax drops

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