Transcript PPT - Frontiers in Distributed Information Systems

Residential Access Network Evolution
Fred Kemmerer
Access Architecture & Strategy
Lucent Technologies
[email protected]
June 1998
Current Environment
• Data is a primary driver for network upgrades
• There are a number of technology choices for broadband data
access
• Access competition is focused around data
• Keys to the industry’s success:
– Building on existing networks (at least in the short term)
– Supporting technologies
– New business models to support data services, particularly
addressing the customer interface challenges
Access Chessboard
Competition converging around data & mobile telephony
Services
Fixed
Telephony
Mobile
Telephony
Data
Video
RBOCs/LECs
Cellular;
PCS
- SBC
- Bell Atlantic
- GTE
IXCs
- AT&T
- MCI
- Sprint
Players
• Leased
Loop?
• Resale?
• IP Telephony?
2nd Lines;
ADSL
VDSL/
Video?
Leased Loop?
Cable Partnerships?
Fixed Wireless?
Cellular,
PCS
Cable MSOs
- TCI
- Time Warner
- Comcast
IP
Telephony?
Cable
Modem
Wireless
- Air Touch
- NexTel
- PCS Winners
Satellite
• Irridium
ISPs
• Direct PC
• Teledesic
• PanAm Sat
• Direct TV
• Dish
• Echo Star
- AOL
- Mindspring
Market Size (1997)
Growth Rate
$62B
3%
$32B
16%
$8 B
26%
$27B
8%
Household Data Demand
Subscribers
CPE
Cost ($)
millions
Avg. Service
Expenditure
($/mo.)
120
Fixed
Voice
Lines
$20-60
$27 (local)
$26 (LD)
Cable TV
$0-300 (DBS)
$42
60
Cellular/
PCS
$0-200
$56
40
PCs
$1,000-3000
-
100
80
Internet
20
0
1993
Total US households = 102M
Source: Veronis and Suhler, IDC, CTIA FCC
1994
1995
1996
1997
$100-250
$20-$40
Wide Range of Projections for Success
15
ADSL
15
Cable Modem
millions
High
millions
10
10
High
5
Medium
5
Medium
Low
0
Low
0
1998
1999
2000
2001
2002
1998
1999
2000
• One winner or zones-of-advantage based winners?
• Wireless, satellite?
Source: Cowles/Simba, Forrester Research, IDC, Yankee Group, Dataquest
2001
2002
DSL Business Model – Early Market View
A positive business model for DSL exists for business and is emerging in high-end
residential/SOHO.
1,000
Willingnessto-pay
T1
Small/Medium
Business
• Based on nearest
alternative currently
in use
Frac T1
ISDN
100
$ per
Month
(log scale)
Existing
Business
Market
Opportunity
Top 25% of
Residential Market
• Based on range of
current market
research
ADSL
HDSL
10
IDSL
Incremental Cost
Emerging High-End
Residential Opportunity
• Potentially higher if
businesses
subsidize (As in
early cellular
business model)
(vs. Analog Modem)
1
0.1 Mbps
Source: Mercer management Consulting
1 Mbps
Downstream Speed (log scale)
10 Mbps
What’s Required?
• Loop Technologies
– Leverage existing copper and coax loops
– Wideband base stations for wireless
• Dollars
• Supporting Technologies
– CPE
– Applications enablers
– Core Network Capacity
• Focus on Customer Interface
• Industry Cooperation
• Encouraging Regulation
Integrated Voice/Data Networks
Existing Infrastructure
Switch Line Unit
w/ Integrated
DSLAM
Circuit
Packet
ADSL via Metallic
Distribution
DLC w/
Integrated
DSLAM
Circuit
Packet
Cable Modems via
Coaxial Distribution
Cable
Modem
Terminating
System
Integrated Voice/Data Networks
New Build
Circuit
Packet
Fiber-to-the-Home
Circuit
Packet
Fixed Wireless
New Access Networks Are Expensive
Leveraging existing infrastructures is a critical advantage
Cumulative Investment in Residential Access Plant
$Billion
100
$92
90
80
70
60
$54
50
40
$32
30
20
10
0
PSTN
Cable TV
Wireless
High First-Costs favor:
• Incremental Upgrades - ADSL, Cable Modems
• Focused Builds - CAPs
• Variable Cost Approaches - Satellite
Source: FCC, CTIA, Kagan
Expected Cable MSO HFC Upgrade Path
2-way HFC Upgrade
% of Homes Passed
80%
70%
60%
50%
40%
30%
20%
10%
0%
1996
1997
1998
Source: Average view of Forrester, Jupiter, Datapro, Company Announcements
1999
2000
2001
2002
Bandwidth Likely to Bring New
and Increased Usage
% of Internet Users Who Would Start/Increase
Use if the Net Were Much Faster and Had
Better Audio-visual Quality
100%
75%
Use More
Start Using
50%
25%
0%
Make
Video
Calls
Watch
Videos
Source: Mercer management Consulting Internet Lead user Study
Make
Voice
Calls
Surf/
Browse
Broadcast
Videos
Play
Games
Purchase
Goods or
Services
Key Related Technologies to
Support Applications
Technology
Some Applications/Benefits
•
Always On/Permanent Network
Connection
Quick-use applications; real-time communications
•
IP Telephony
Flat-rate long distance; E-mail & Voice Mail
integration
•
Streaming Audio/Video Hardware
and Software
High quality gaming, Video clip newsfeeds, Sports
replays, Video-on-demand, Video-mail
•
Push
Personalized information, targeted advertising to
help fund network costs
•
New classes of Plug and Play DataEnabled Devices/Modems in Consumer
Devices
Internet access via TV, smart appliances, ease of
use
•
Home LANs
Reduced cost for multiple broadband modems;
Intra-home networking; Home Management
Business Model/Customer Interface
Cable Modem Example
Business Model
Cable
Modem
MSO Regional
HeadData
End
Center
National
Backbone
Content
Servers
•
Focal point for industry cooperation issues
•
Backbone and server architecture/capacity
for end-to-end high speed experience
•
National branding and marketing platform
•
Uniform nationwide standards
- Technology
- Standard Operating Procedures
•
Customer Interface Development
- Customer support
- Operating systems
•
National scale for content, advertising plays
•
Centralize data networking expertise
•
Raise funds from the capital markets to
supplement limited cash flows
PC
NAP
Network
Caching
Management
Servers
& Admin.
Cable
MSOs
Cable Modem
National ISP
Broadband Access Lift-Off Enablers
Cable Modems on the inside track?
Cost
Cable Modem
Standards
Customer
Coverage
Trials-Proven
Technology
• HFC upgrades
on track
ADSL
Wireless
Satellite
• Spectrum available,
but infrastructure
build can be time
consuming
• Need satellite
launch
• Can ramp to
100% quickly
Full Service
Network/FTTH
Business Model/
Customer Interface
What Will the Access Landscape Look Like?
Near Term
•
•
•
Focused demand
High cost for new network builds
Current applications dominate
–
–
Long Term
•
•
•
Broad Demand
Cost curves decline
Data, Video and Voice
PC
Internet
•
Sow the seeds for new broadband
applications
•
Always-on, Many devices
•
•
VF modems continue to dominate
Incremental upgrade technologies
•
Fiber Close-to and Into the Home
–
•
•
Cable Modems & ADSL
Pull Fiber to the Neighborhood
Wireless as a Wild-Card
Rate of Access Plant Fiberization
% of Plant
100%
Long Distance
Carrier Network
Local Inter-office
Trunking
80%
60%
40%
Local
Distribution
Feeder
20%
0%
1984
Source: FCC Filings, Lucent Estimates
1986
1988
1990
1992
1994
1996
1998
Thank You!!