IPTV AND BROADBAND INFRASTRUCTURE June 2007

USING OPTICAL+ETHERNET NETWORKS

The strong worldwide demand for next-generation broadband

services is driving service providers to invest heavily in first-
mile access technologies such as DSL, HFC and FTTH. Now,
end-user bandwidth is set to rise dramatically as new IPTV
video service bundles are offered. To remain competitive and
profitable, providers need cost-efficient, scalable second-mile
solutions that provide affordable backhaul to their service
nodes.

The deployment of high-capacity Internet Protocol TV (IPTV),

video, data and triple play services presents service providers
with many challenges. The tremendous increase in service
bandwidth combined with unpredictable service adoption,
leads to uncertainty in traffic patterns and required capacity. The Fiber Service Platform (FSP) is a
So backhaul networks that provide very high scalability and family of innovative products that
flexibility for future traffic demands must be planned and provide comprehensive Optical+Ethernet
deployed. The over-riding imperative is to do so at the lowest
networking solutions for access, metro
cost, both initial and ongoing.
core and regional networks. ADVA
Optical+Ethernet transport solutions provide the answer, Optical Networking is focused on the
thanks to the enormous bandwidth scalability of optical needs of enterprise and service provider
transport and the widespread adoption of Ethernet as the customers deploying data, storage, voice
low-cost transport protocol for these new services. This white and video applications.
paper examines how scalable, low-cost Ethernet over Coarse
Wavelength Division Multiplexing (CWDM) provides carriers
with a reliable and economic method to support new services
and future capacity growth. Optical networking plus Ethernet
provides the ideal Fibre-to-the-Node (FTTN) infrastructure for ADVA Optical Networking Inc.

new IP-DSL Access Multiplexers (DSLAMs) and also today’s © 2007. All rights reserved.
ATM-based DSLAMs and legacy SONET/SDH services.

LEGAL DISCLAIMER: The information

provided in this document is distributed
Table of contents: “as is” without any warranty, either
express or limited.
Next-generation services: from one-play to bundles 2
Flexible Optical+Ethernet network infrastructure 3
Evolution of broadband technology to Ethernet/IP 4
Requirements in the second-mile: access backhaul 5
Architectural choices and goals 6
Optical backhaul for cost-optimized multi-services 7
Future evolution: the right technology 9

Author: Stephan Rettenberger, ADVA Optical Networking

Next-generation services: from one-play to bundles

High-speed Internet access, peer-to-peer video gaming and multimedia download have
driven residential customer demand for high-speed connectivity. The Windsor Oaks Group
estimates more than 271 million fixed broadband subscribers worldwide at the end of 2006,
with a CAGR of 12% to 533 million at the end of 2012. Yet customers demand more. Video
services (increasingly offered using IPTV) are recognized as the key to higher ARPU and
bundled services that include data, voice and video – triple play – are being launched.

DSL accounts for the majority of broadband connections in Europe and more than 64% of
the worldwide broadband market. It retains its stranglehold versus Hybrid Fiber Coax (HFC)
and other high-speed offerings such as Fiber-to-the-Home (FTTH). DSL is the key first-mile
technology for both residential users and the fast-growing small-office/home-office (SOHO)
market.

The future of the market will be driven by personalized multimedia; for example, video
offerings such as childrens’ TV, TV replay, music videos and 2-way video calling have
proven successful for FastWeb in Italy. What seems to be needed is a “one-play” focused
video service. Whether one-play or triple play, different operators invest in different growth
strategies, but they all recognize an exploding bandwidth demand – perhaps even an order
of magnitude increase in the next 5 years – which must be met by the network.

The different services in the triple play package have different characteristics and
requirements regarding bandwidth and network performance1:

:: IPTV (broadcast) – uni-directional service, normally multi-casted, 4-6Mbit/s

peak bandwidth per channel and medium requirements on jitter and delay
performance – perhaps rising to 10-20Mbit/s for HD video services;
:: Video-on-Demand (VoD) – uni-directional unicast service, 4-6Mbit/s peak
bandwidth per movie and medium requirements on jitter and delay
performance;
:: Voice-over-IP (VoIP) – bi-directional service, 40kbit/s per voice channel and
stringent requirements on jitter and delay performance;
:: Internet access – asymmetric service, uplink 5kbit/s and downlink 50kbit/s
average per user during peak hours and loose requirements on jitter and delay
performance.

The challenge? Service provider revenue is growing only slightly in value, yet the volume of
traffic and users continues to increase, both in industrialized and developing countries.
Infonetics Research estimates IPTV subscribers grew by 166% during 2006 to reach
7.2million worldwide and this is just the beginning of the next phase in broadband growth.
In the big picture, control of cost is thus essential, and it is obvious that network
infrastructure has a decisive role in cost-effectively accommodating such rising bandwidth
demand.

1
Values are based on a generic model. Actual numbers may vary.

2
Flexible Optical+Ethernet network infrastructure

DSL access is capable of supporting today’s varied service requirements. Yet next-
generation broadband services require higher capacity, driving an increased penetration of
Fiber to the Node (FTTN) with Very-high-rate DSL (VDSL)/VDSL2 drops to the end-
customer. Cable TV systems, using coax feeds to the end-customer, are more than capable
of supporting the varied service requirements, yet they too require an increasing capacity.

Even as extreme competition drives prices downwards, service providers need to offer
higher Quality of Service (QoS) to ensure viewers maintain their Quality of Experience
(QoE). They need to offer high availability services and still higher capacity to the end-user.

Looking ahead, FTTH ONT and OLT growth is forecasted at 50% (Dittberner Associates) and
is widely expected to be the engine of broadband growth in many countries. And with the
transition to HDTV video services, it’s clear that capacity demand will not reduce in the
foreseeable future.

IP
backbone
Broadcast Video on Demand
server server

BSR

Ethernet transport

TV/Video
1…n

Set-top
Internet Box (STP)

Voice

Figure 1: Triple play next-generation access scenario

New second-mile network technologies such as Carrier Ethernet and CWDM transport have
proven less costly than legacy SONET/SDH and ATM architectures and enable carriers to
cost-effectively manage the large amounts of bandwidth required. By using
Optical+Ethernet transport to process multi-Gigabit/s of Ethernet traffic onto protected
optical fiber, service providers enjoy uncompromised availability and scalability coupled
with dramatic improvements to operational efficiency and future flexibility (Figure 1).

As a result, CWDM optical technology is accepted as an essential part of next-generation

broadband, whether it is based on DSL or based on alternative technology such as HFC. The
integration of Ethernet packet technology brings advantages in terms of network utilisation
and link efficiency, as packet data traffic grows to rapidly eclipse TDM traffic types.

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Evolution of broadband technology to Ethernet/IP

The Windsor Oaks Group reports that (Figure 2): “DSL will remain the dominant broadband
technology, with 64% of total fixed broadband subscribers. FTTH will offer the strongest
growth opportunity with 29% CAGR, while cable will be the lowest at 9%.”2.

Global Broadband Subscribers by Type, 2004-2012

DSL Cable Modem FTTH Other

600.000

500.000
Subscribers (000)

400.000

300.000

200.000

100.000

0
2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: broadbandtrends.com
Figure 2: Global broadband subscribers, forecast by technology

Following the commercial introduction of DSL, the technology has undergone substantial
innovations to increase supportable bandwidth/distance. Today, Asymmetric DSL2 (ADSL2)
and ADSL2+ are available. These International Telecommunication Union (ITU-T) standards
deliver 12Mbit/s and more than 25Mbit/s maximum capacity downstream, respectively.
Further increase in capacity is provided by VDSL2 (ITU-T G.993.2) to provide 100Mbit/s
symmetrical up and downstream over short loop lengths.

Older generation DSLAMs use ATM as the underlying aggregation mechanism for connecting
to the carrier network. Backhaul to the metro core is based on SONET/SDH, typically at
OC3/STM-1, 155Mbit/s. However, as bandwidth needs increase and the service mix
changes, this first-generation architecture is no longer adequate and is being supplanted.

The latest DSLAM technology uses Ethernet and IP with Gigabit Ethernet (GbE) uplinks.
Related DSL network technology, such as the Broadband Services Router (BSR), which
typically sits at the metro core and manages traffic flow, follows this trend. As illustrated in
Figure 1, Ethernet is emerging as the next-generation IPTV transport mechanism all the
way to the customer premise, where the set-top box signals channel changing. Internet
Group Management Protocol (IGMP) supports multicast applications.

In such a network architecture, the fine granularity of SONET/SDH transport becomes an

expensive liability. In this case it is far more cost-effective to use CWDM and manage high-
capacity GbE connectivity and processing at the wavelength level instead.

2
Courtesy The Windsor Oaks Group, May 2007

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Requirements in the second-mile: access backhaul

Successful rollout programs for next-generation bundled services require more than
powerful first-mile access technologies, however. The second-mile of the access network
can easily become the bottleneck, thus carriers also need a scalable FTTN transport
solution. Protected, low-cost backhaul of aggregated DSLAM traffic to the metro/core is key
for long-term service success and profitability. CWDM provides an excellent solution, in
combination with Ethernet.

Further, the transition to FTTN/VDSL2 and FTTH architectures using various types of PON or
other technologies requires careful planning, to ensure that future flexibility is not
compromised. Any second-mile solution must offer high scalability for the future but also
deliver low first-in costs today. What are some of the key requirements to consider?

CAPACITY AND TOPOLOGY

We take a simple example of a DSLAM supporting up to 500 subscribers in a geographical

serving area. A triple play service model in today’s market, such as that described
previously, might create the following bandwidth requirements per DSLAM:

:: 400Mbit/s for 80 active TV broadcast channels at 5Mbit/s each;

:: 125Mbit/s for 500 VoD subscribers (5% activity rate) at 5Mbit/s each;
:: 25Mbit/s for 500 Internet subscribers, at an average of 50kbit/s, and
:: 4Mbit/s for 500 voice subscribers (20% activity rate) at 40kbit/s.

The total aggregated bandwidth per DSLAM, then, is 554Mbit/s (400+125+25+4) – so that
providing 1Gbit/s per DSLAM for backhaul to the metro core is sufficient in this simple case.
Note however, that using VDSL to enable multiple video stream delivery could increase
bandwidth demand still further, as could a higher service activity rate, or indeed, use of
high-capacity uplinks for peer-to-peer applications. A jump to HD video might drive
capacity to 2Gbit/s, depending on the usable compression. Scalability is key and a backhaul
capacity rising to several Gbit/s might eventually be required.

For most service providers, fiber cost plays a significant role. Availability of dark fiber may
be limited or even non-existent, requiring costly lease arrangements with another carrier. It
is, therefore, critical to choose a topology and technology that supports efficient use of fiber
infrastructure – no matter whether it is owned or leased.

Ring topologies have proven to be the best choice for any type of network scenario in which
traffic must be backhauled from multiple locations to a central point. Initial investment and
ongoing operational costs are relatively attractive. The physical ring requires only one fiber
pair, allows efficient protection mechanisms and is easy to operate.

Logical traffic patterns between DSLAMs and the BSR are hub and spoke and match this
model perfectly. Typically, three to five DSLAM access nodes are connected to one hub
node and can be easily supported using CWDM access rings with growth headroom.

5
Architectural choices and goals

Recalling the big picture imperatives discussed earlier, in order to drive cost out of an IPTV
network infrastructure, operators need to pay attention to several priorities (Figure 3):

:: Eliminate network layers by integrating optical and Ethernet technology;

:: Increase network efficiency by circuit multiplexing and packet aggregation;
:: Deploy operationally simple technology;
:: Automate using provisioning, management and OAM facilities;
:: Flexible node processing: pass-thru, add/drop, drop & continue
BSR

Video
Ethernet layer server ISP
 Intelligence Metro hub node
 Virtual connectivity
 Packet efficiency

Optical layer
 Scalability
 Protection
 Fibre efficiency

PON-ONT Optical+Ethernet
IP-DSLAM transport node
Figure 3: Metro access generic network layer architecture

Considering that there is often a shortage of fibre in metro and access areas, that GbE and
legacy services must be supported from OC3/STM-1 to 10Gbit/s and that reliable and
robust protection schemes are needed, optical networking is a clear-cut solution. With a
judicious integration of Ethernet, traffic efficiency can be greatly increased whilst low costs
are maintained since the complexity of a full L2 Ethernet network is avoided. Thus, this
approach tends to provide the lowest cost per bit in a wavelength – the bottom line.

OPERATIONAL EXPENSE

It may seem trite to state that network characteristics have a high impact on operational
expense, but that is precisely the case. Opex is notoriously difficult to quantify, but several
Optical+Ethernet attributes provide confidence that opex can be controlled. For example,
transport-centric networks are intrinsically simpler than switch-centric networks. Carrier
Ethernet is still developing as a mainstream approach and an optical layer OAM provides
proactive alarms, clean fault diagnosis and fast troubleshooting. Service management is
simpler (point-to-point vs multipoint) and since there are fewer and less complex
parameters, configuration is simpler as well. Finally, the well-known rapid and reliable
protection mechanisms of an optical layer ensure high availability and support low costs.

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Optical backhaul for cost-optimized multi-services

Optical networks have a long history of success. High capacity Dense WDM (DWDM)
systems are the foundation of today’s backbone networks. Scalable multi-service rings
connect central offices around metropolitan areas and expand into regional networks, while
dedicated implementations support mission-critical applications for large corporations. The
value proposition of WDM is clear: lowest-cost-per-bit transport, support of any protocol
and bit-rate, high scalability and future-proofed for network growth.

Carrier-class CWDM systems expand the application of the technology still further. Utilizing
wider wavelength spacing than DWDM, CWDM uses low-cost components to deliver up to
10Gbit/s per wavelength. Such systems are extremely attractive in price; they are a perfect
fit for FTTN backhaul requirements in an access network, where cost sensitivity is very
high.

Logical
connection

WiMAX

FTTH
PON
ADSL /
ADSL2+
FTTC
(VDSL, HFC)
L2 card
GbE-ADM
Framer
VDSL

1 ..... 20

GbE-ADM Integrated L2 functionality

Lowest-cost transport for GbE pipes: Lowest-cost transport for very high GbE count,
Pass-thru only partially filled (statistical gain):
Add/Drop L2 based aggregation into 10G
Drop&Continue (broadcast) Multicast support

Figure 4: Broadband backhaul via CWDM rings

CWDM rings with a Gigabit-Ethernet-Add-Drop Multiplexer (GbE-ADM) function provide very

adaptable, flexible configurations. For example, multiple DSLAMs can be connected to the
service node at a metro core hub using a single wavelength (illustrated in Figure 4). Or
different networks, for example the PON network, can be deployed on a separate
wavelength. This has obvious advantages for future scaling and network isolation. Use of
separate wavelengths also opens the door to access unbundling and wholesale service
offerings.

WDM also allows easy integration of DSLAM-based broadband networks using SONET/SDH
or ATM interfaces. In some cases, the mobile network can be converged onto the same
access infrastructure in order to take advantage of common backhaul.

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GBE-ADM: COST-EFFECTIVE ETHERNET TRANSPORT

The GbE-ADM function is a new capability introduced by ADVA Optical Networking, which
provides flexible pass-thru, add/drop and drop&continue functionality of four GbE channels
at a particular node. The GbE channels are multiplexed onto a 4Gbit/s wavelength channel
for transmission around the ring.

Different approaches exist when it comes to protecting services against various network
and equipment failures. Cost sensitivity is high in access networks, and protection against
fiber cuts is the main concern. The best strategy is to perform protection at the lowest
network layer possible, in this case the optical layer.

The ring architecture here allows an easy 1+1 full optical line protection capability, by
sending the 4Gbit/s aggregate wavelength channels both ways around the ring, clockwise
and anti-clockwise. Switchover in the rare event of failure should be extremely fast, less
than 50ms, and is performed by the receiving transponders at the head-end.

This architecture also supports a nodal drop & continue functionality. This has proven
invaluable in easily provisioning and delivering TV broadcast services, at maximum network
efficiency. Nodes simply access the required GbE stream while the stream is in transit at
the node. Other operating configurations include pass-through and add/drop mux.

CWDM rings with GbE-ADM function offer a compelling set of advantages:

:: highest data transport capacity for lowest operational cost;

:: wire-speed Gigabit Ethernet with node pass-thru, add/drop or drop&continue;
:: low latency, high QoS and no packet loss;
:: easy network overlays for different services or different operators;
:: simple and transparent managed FTTN infrastructure;
:: SONET/SDH-like simplicity, with no need for optical link engineering, optical
amplifiers or power balancing (less operational complexity);
:: fast and automatic optical-layer protection mechanisms with client OAM;
:: easy combination of legacy services such as ATM on a single fiber, and
:: efficient backhaul of multiple DSLAMs per node through the use of Time
Division Multiplexing (TDM) to a 4Gbit/s wavelength.

In summary, the use of technology such as GbE-ADM increases the efficiency of the
system. MPEG video compression technology squeezes video into a lower bandwidth – while
GbE-ADM and CWDM squeezes those channels onto a transport network at lower cost.

8
THE IMPLICATIONS OF VDSL

The commercial availability of VDSL2 technology enables service providers today to deliver
up to 100Mbit/s over a pair of twisted copper cable. IPTV offerings in High Definition TV
(HDTV) quality combined with a strong Video on Demand (VoD) component clearly benefit
from this technology. On the downside, however, the distance capability of VDSL is reduced
versus ADSL, and the DSLAM needs to move closer to the end-user – in many cases within
the range of less than one kilometer. The resulting Fiber-To-The-Curb (FTTC) architecture
implies that typically the number of subscribers per DSLAM is significantly lower than in the
ADSL case. The number of GbE ports back at the mini Pop, on the other hand, increases,
since there are in average more VDSL-based DSLAMs at the curb than ADSL-based DSLAMs
at the node. Figure 4 shows the architectural difference.

The higher number of GbE ports in the VDSL scenario drives also a higher amount of total
bandwidth in the second mile although the individual GbE ports may only be partially filled.
In that case network efficiency and costs of the backhaul architecture can be further
improved by using a 10Gbit/s aggregate channel with increased Ethernet processing. This
architecture scales well to meet future demand, without costs spiraling out of control.

Future evolution: the right technology

Carriers around the globe are preparing to launch high-capacity next-generation broadband
and video services to their residential and SOHO customers

DSL plays a key role in enabling IPTV, video and triple play services to end-users over first-
mile copper networks. In the second-mile of the access network, optical transport solutions
are ideally suited to provide cost-efficient backhaul of growing traffic volumes to the metro
core. CWDM rings, in particular, have the right cost points and functionality to secure fast
return on investment and ensure long-term scalability and efficiency for FTTN/VDSL2
architectures.

The optimal use of Optical+Ethernet transport technology can ensure maximum bandwidth
efficiency for both circuit and packet distribution and backhaul in high capacity applications.
The integration of L1 and L2 network layers provides simpler operations and lowest cost-
per-bit transport. GbE-optimized muxponder and ADM cards deliver the lowest latency and
jitter and zero packet loss. As packet traffic comes to dominate, further efficiencies are
possible by integrating additional L2 packet processing into the optical layer.

The promise of video services and IPTV technology is driving huge changes in the first- and
second-mile backhaul networks. A flexible approach is required to support diverse services
such as xDSL and PON with unpredictable demand – without making expensive up-front
commitments. Optical+Ethernet networks allow service providers a freedom with low first-
in cost and massive scalability plus increasing efficiency via TDM and packet
grooming/multiplexing.

ADVA Optical Networking delivers the integrated Optical+Ethernet difference: Operational

simplicity, more revenue and lower cost.

9
The right technology

ADVA Optical Networking has a long history of providing

application-focused fiber-optic solutions that add value to, and ADVA AG Optical Networking
remove cost from, carrier networks. With a comprehensive Campus Martinsried
portfolio of innovative Optical+Ethernet networking solutions, Fraunhoferstrasse 9a
82152 Martinsried/Munich
ADVA Optical Networking is an ideal partner for service Germany
providers seeking to roll out differentiated portfolios of high- t +49 89 89 06 65 0
f +49 89 89 06 65 199
speed services. Regardless of which type of service the service info@advaoptical.com
provider decides to offer, ADVA Optical Networking has the
right solution to affordably backhaul the traffic to the metro ADVA Optical Networking Inc.
core and beyond. One International Blvd.
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ADVA Optical Networking Ltd.

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t +44 1904 692 700
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info@advaoptical.com

ADVA Optical Networking Corp.

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Japan
t +81 3 6667 5830
f +81 3 6667 5839
info-asiapacific@advaoptical.com

ADVA AG Optical Networking

About ADVA Optical Networking Hightec 6, bât. A, 1er étage
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ADVA Optical Networking (FSE: ADV) is at the forefront of France
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providing Optical+Ethernet solutions that advance next- f +33 1 69 07 87 19
generation networks for data, storage, voice and video info@advaoptical.com
services. ADVA Optical Networking’s strength comes from
passionate and dedicated employees, all sharing a common www.advaoptical.com
vision: a fast, customized response to customers’ ever-
changing needs. Our innovative Fiber Service Platform (FSP)
and strong customer focus provide carriers and enterprises
the ability to scale their networks and deliver intelligent,
competitive new services. ADVA Optical Networking’s solutions
have been deployed at more than 200 carriers and 10,000
enterprises in more than 40 countries worldwide. For further
information: www.advaoptical.com.

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