All channels point to IP
Jun 1, 2007 12:00 PM, BY PATRICK SIMS
An IP-based network is the most cost-effective way to deliver HDTV and new multimedia services.
PON cost components
Component and interface costs change over time relative to different network architectures. Today, typical broadband PON (BPON) costs are significantly lower than either gigabit or GigE passive networks simply because of the maturity of the technology and the availability of the chip sets. When comparing the real cost of technology, however, BPON lacks the required bandwidth to support VoIP and video services.
Figure 2. PON and OLT capacities by services
Click image to enlarge.
The PON equipment component costs are found in the northbound network interfaces that physically connect the video headend to the PON OLT, the common OLT equipment and the PON interfaces to the outside plant.
A network's central office electronics and installation accounts for only about 8 percent of the network's total cost, whereas the outside plant hardware and labor typically account for about 40 percent of the total cost. (See Figure 3.) The customer premise equipment and installation account for more than 50 percent of the total cost. As one large telco has discovered, the real costs of deployment start at the drop box.
There is a clear positive relationship between technology changes and the interface costs. Higher line rate, higher split ratio and newer technology all lead to a higher PON interface cost.
As stated above, BPON is expected to incur a lower initial cost due to the maturity of the technology and higher volume. Gigabit networks may be expected to have a faster cost reduction rate. This may be partially due to the spreading out of the gigabit PON (GPON) cost over 64 subscribers over time and improvements in MPEG-4 performance. As that happens, the cost differences between BPON and GPON will be reduced.
PON revenues
Before any network design decisions are made, managers and system engineers need to ask themselves the following key questions:
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Figure 3. PON interface cost. As technology (bit rates) improve, split ratios also increase. For example, with a 622Mb/s system, the signal can be split into 32 feeds. A much faster 2.5Gb/s system would support four times as many feeds, or 128.
Click image to enlarge.Is this a greenfield deployment where, as the incumbent, I can expect a 100-percent take rate where all the service revenues are new?
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Am I overbuilding with existing subscribers who are already my customers for voice and data, and the only new revenue streams will come from video?
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Am I overbuilding myself to stem the tide of competition coming into my territory? If so, do I need to implement a copper solution first? Or, can I wait for higher-bandwidth solutions to come down in cost?
Because voice, video and data services represent significant revenues, ultimately there may be a high cost for delaying deployment and potentially losing market share.
Implications for broadcasters
New technology is available to make the implementation of high-bandwidth services easier and less expensive. Even those costs, however, will drop over time. If a service provider can wait, it will gain a cost build-out advantage.
If, on the other hand, the service provider needs to move now, there are copper and copper/fiber network solutions. These can be implemented now and updated to provide more bandwidth without a future forklift renovation.
MPEG-4 will be the compression of choice for these new services. While STB and encoder choices are limited today, more options are coming quickly. This new compression standard offers vast improvements over MPEG-2. The potential downside is that MPEG-4 installations usually require a greenfield.
Broadband service providers are investing billions to build out the infrastructure needed to support IPTV and the delivery of other IP-based services. These companies know that the demand for video is the main driver. Ultimately, the broadcaster must deliver sought-after content or face the risk of losing audiences to other forms of entertainment. While the service providers are laying the pipes, broadcasters have to fill the demand.
Patrick Sims is principal engineer for ADC.
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