Transcript No Slide Title

Residential Broadband Telephony:
How and When
Sandy Teger and David Waks
System Dynamics Inc.
Voice On the Net Asia 2000
November 15, 2000
System Dynamics Inc.
Copyright © 2000
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 2
“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 3
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 4
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 5
Factors in Broadband Access Choices
GigE Fiber
MDU
Cable modem
Homes
Twisted pair DSL
Satellite
Farm
City: High-rise
multi-family units
Suburbs:
Individual singlefamily units
Rural: isolated
single family unit
• Population density
• Existing infrastructure (e.g., twisted pair, cable, fiber)
• Government policies
• Competitive and regulatory dynamics
• Technology evolution
Copyright © 2000 System Dynamics Inc.
Slide 6
Global Broadband Access
Subscriber Forecast
50
LMDS
xDSL
40
SATELLITE
CABLE MODEM
SUBSCRIBERS,
M
30
20
10
0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: Hughes from Pioneer Consulting, 1998
Copyright © 2000 System Dynamics Inc.
Slide 7
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 8
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”
Data
Telephony
Interactive services
PC and TV
Local
Video telephony
Long distance Videoconferencing
Video
Analog/digital
PPV/NVOD/VOD
Copyright © 2000 System Dynamics Inc.
Slide 9
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 10
Today’s Circuit-Switched Network
Inter-Exchange
Carrier
CO
Originating
Carrier
CO
CO
CO
Terminating
Carrier
CO
CO
CO
CO
SS7 Network
Access Network
(twisted pair)
Access Network
(twisted pair)
Copyright © 2000 System Dynamics Inc.
Slide 11
“HFC Telephony” Provides Alternate Access
Inter-Exchange
Carrier
“Circuit-circuit”
CO
Originating
Carrier
CO
CO
CO
Terminating
Carrier
CO
CO
CO
CO
SS7 Network
Access Network
(Hybrid fiber-coax
cable with “HFC
telephony”)
Copyright © 2000 System Dynamics Inc.
Access Network
(twisted pair)
Slide 12
“HFC Telephony” - Technology Platform
HFC distribution plant
Arris Interactive
Cornerstone equipment
Host digital
terminal
Customer Home
Class 5
Switch
PSTN
GR-303
or V5.2
(T-1/E-1)
Multi-line
“voice port”
( or NIU)
Cable Hub Site and/or Headend
• Four major products deployed worldwide
– Arris Cornerstone (Antec/Nortel)
– ADC HomeWorx
– Tellabs CableSpan 2300
– Motorola CableComm
• Proprietary and mutually incompatible
Copyright © 2000 System Dynamics Inc.
Slide 13
“IP Telephony” Can Provide Alternate Access...
Inter-Exchange
Carrier
“Packet-circuit”
CO
Originating
Carrier
CO
CO
CO
Terminating
Carrier
CO
CO
CO
IP
Gateway
CO
SS7 Network
Access Network
(Hybrid fiber-coax
cable with IP
telephony)
Copyright © 2000 System Dynamics Inc.
Access Network
(twisted pair)
Slide 14
…And Can Enable “End-to-End IP”
“Packet-Packet”
Inter-Exchange
Carrier
Originating
Carrier
Terminating
Carrier
IP
Gateway
CO
Access Network
(Hybrid fiber-coax
cable with IP
telephony)
Copyright © 2000 System Dynamics Inc.
Access
Network
(twisted
pair)
Access
Network
(IP
based)
Slide 15
IP Telephony Overlays The Cable Plant
Local Cable Headend
Remote Cable Headend
Private
IP Network
with QoS
CMTS
CMS
(Gatekeeper)
Gateway
CMTS
Gateway
HFC distribution plant
HFC distribution plant
Local
PSTN
Customer home
CMS
(Gatekeeper)
Cable modem
or OpenCable
set-top box
with PacketCable™
functionality
Copyright © 2000 System Dynamics Inc.
Remote
PSTN
Customer home
Slide 16
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 17
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.
Sources: AT&T Investor Relations;
Cable Datacom News, August 1998
Slide 18
Cable Telephony in North America
CircuitCircuit
AT&T
Cox
CircuitPacket
PacketPacket
400,000
>100,000
Videotron
Comcast
Copyright © 2000 System Dynamics Inc.
Slide 19
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 20
VoDSL Provides Alternate Access
Inter-Exchange
Carrier
CO
Originating
Carrier
CO
CO
CO
Terminating
Carrier
CO
CO
CO
CO
SS7 Network
Access Network
(Twisted pair with
VoDSL)
Copyright © 2000 System Dynamics Inc.
Access Network
(twisted pair)
Slide 21
Elements of VoDSL
IAD
xDSL
DSLAM
Packet
Data
Access
ISPs
Voice
Gateway
Class 5
Switch
IAD
Voice Gateway
voice
• Offers data access
functions
(routing/bridging)
• Connects directly to
DSL
voice to PCM stream
• Supports TDM
connections to Class 5
switch
• Provides focus for
management of voice
service
• Digitizes & packetizes
Copyright © 2000 System Dynamics Inc.
• Converts packetized
Source: Martin Taylor, CopperCom
Slide 22
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
Copyright © 2000 System Dynamics Inc.
Source: Martin Taylor, CopperCom
Slide 23
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 24
Two Different Visions of VoB Evolution
End Goal
Cable and New
Entrants
End to end IP
Traditional
Carriers
?
Local access
VoIP over x
VoATM over x
Intelligence for PCs, SIP phones and Network-based
new services
SIP servers
softswitches
Penetration of
SIP phones
Fast
Slow or none
New
Applications
Voice as an
integrated element
with data and video
New voice
features
Copyright © 2000 System Dynamics Inc.
Slide 25
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 26
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
Copyright © 2000 System Dynamics Inc.
Slide 27
For More Information:
System Dynamics Inc.
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
Backup Slides
Copyright © 2000 System Dynamics Inc.
Slide 29
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
Copyright © 2000 System Dynamics Inc.
Slide 30