Fibre to the home

November 2001 A recent entrant into the race to deliver broadband to the consumer could not only scoop the prize but change the rules for its rivals. Can Gigabit Ethernet work in practice as well as it does on paper?

Well connected: Broadband homes in North America

With the world in the shadow of an economic slowdown, it seems many governments are following the old maxim ‘spend your way out of recession’ – 21st century style. However, instead of the traditional road or track building programmes often used to stimulate business activity, public funds are today going into broadband networks.

Recognising broadband's benefits to business productivity and consumer spending, the Irish government, for example, is sponsoring a fibre-optic backbone in the west of the country, the UK is offering incentives to build broadband in rural areas, and metropolitan projects are taking root across Europe. Similar initiatives are helping to lift a troubled US and a stagnating Japan, which is aiming to have at least 10 million users connected to broadband by 2005.

The biggest barrier to fulfilling these ambitions is delivery through the local loop or ‘first mile’ of a network, where the network backbone's local exchange or central office links into each individual household or business. A recent report from research group BDRC identified the local loop as a crucial nut to crack if the EU's stated intention of converting Europe to broadband is to be met quickly.

The report states that take-up of broadband will be faster where access to the local loop in a given region is open to more than one service provider, and encourages policy makers to support competition between platforms and content providers to reduce the cost of access. The report also indicates that 2.4 per cent of European households enjoy broadband access compared with 9.4 per cent of American homes.

There are numerous methods of delivering broadband services, including: DSL, cable, fixed wireless and satellite with each displaying their set of pros and cons. However, each has its own Achilles heal meaning that, at present, the no de facto last mile technology has yet emerged leaving the field still wide open. And, it is into this environment that the latest ‘pretender’ to the broadband access throne has entered: ‘Gigabit Ethernet’.

Most fibre networks in place today follow the PON (passive optical network) approach, which reproduces a copper network's branching-out structure. Here capacity is fed into community distribution points or exchanges and then onto subscribers. The drawback of the branch-based approach, whether fibre-or copper-based, is that as more subscribers sign up in a given area, they have to share the existing exchange capacity, which can lead to bottleneck issues.

An alternative approach to fibre networking is attracting increased interest, however. While most branch-based networks deliver between 500 and 1,500Kbps to subscribers, Gigabit Ethernet is entering the market with the startling proposition of being able to deliver its entire 1,000Mbps capacity direct to any subscriber, while offering a business model that offers strong prospects for recovering costs.

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Point to point

One of the foremost proponents of the Gigabit standard is World Wide Packets. Although the firm bears all the hallmarks of a wet-behind-the-ears start-up – it was founded in 2000 and has secured two rounds of capital totalling 64 million euros – the company CEO is Bernard Daines, who worked on the original Ethernet development team in the 1980s and has worked ceaselessly to promote Ethernet ever since.

In a market where relatively few customers have even 500Kbps connections, the Gigabit Ethernet standard is a massive step forward. "We're focused on providing solutions for the first mile – high bandwidth at the lowest cost," says WWP's European vice president David Allen.

"When Bernard Daines sold his previous company," explains WWP vice president for Europe David Allen, "he was looking to see where Ethernet could be used next. He found that the next market was in the local loop." After an initial trial project in Washington State's Grant County, WWP opened a European sales office in London in May, then announced a partnership with Hitachi in August as its move into the Japanese market. "There's perhaps more market opportunity in Europe and Asia than in the US," says Allen.

WWP is currently participating in projects and proposals across Europe; "We'll be going to market with a partner model," says Allen. Most of the company's attention is focused in Scandinavia, the Netherlands, France and Italy, although Allen says it will not be until mid-2002 that specific projects are announced.

Three key partner profiles are being established at this time. Gigabit Ethernet should appeal to service providers and cable companies looking for high-capacity alternatives to copper for their new projects, and the firm is active in the municipal market, where city authorities and rural development agencies are allocated funding for networks.

A more surprising source of potential partnership is utility firms, such as electricity providers. "These are the people we see as the next network providers," says Allen. "They're looking to start providing telecoms because they own the rights of way into the home."

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The technology

Gigabit Ethernet has seen the Ethernet standard evolve greatly from the system used in an estimated 90 per cent of companies' internal networks. Obviously, these networks are far slower, with typical transfer speeds of 10 or 100Mbps; but they also share their bandwidth, so that transfer speeds decrease as traffic grows.

Gigabit Ethernet uses full-duplex communications so that each user on the network is guaranteed capacity, and is also able to manage usage so that bandwidth not being employed at the time is opened up to other traffic. "We use multicast, which basically means you only take the bandwidth that's required," says David Allen. "Each switch controls the bandwidth going through to each user."

This means that if a subscriber is on a pure fibre network, with optic cable used in the home, they can receive a full gigabit or 1,000Mbps of bandwidth – currently, far in excess of what most customers require, of course, but that excess means the delivery section of the network is well-placed to support future demand. WWP also offers solutions for multi-dweller buildings, delivering one fibre connection for the entire building, then using copper or cable inside to supply up to 100Mbps per subscriber.

The benefit of this direct-access model is that the local loop need not be confined to one service provider, but can be opened to competition. This makes Gigabit Ethernet attractive to municipalities and utilities, despite the relatively high installation costs caused by the need to install a brand-new network infrastructure.

"They realise that they have a revenue model to charge access to other service providers. As soon as you have built the fibre, it means there's no more control over the local loop by one company. That opens the field to many different models of content provider; whoever wants to provide material just needs to see how they can provide content on a server basis,” says Allen.

More capacity?

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The message seems to sinking in that consumer appetite for broadband is not being met by current solutions, however. A willingness to invest is apparent, with the BDRC report on broadband in Europe suggesting that as many as one in three EU households could have access to pure fibre or fibre-hybrid networks by 2004, compared to the quarter of households with access to cable modems by that point.

Gigabit Ethernet also carries the benefit of being scalable: WWP CEO Bernard Daines has said he anticipates that the capacity available today will be sufficient for the next decade. The excess capacity can also be used as overbuild, supporting other networks in the same area. Meanwhile, Daines is active in the 10 Gigabit Ethernet Alliance, an affiliation of firms promoting the next stage in Ethernet standards.

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