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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here

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To: Kenneth E. Phillipps who wrote (1901)8/16/1998 2:27:00 PM
From: Frank A. Coluccio  Read Replies (3) of 12823
 
Ken, you ask: >>If you have information about the current state of other fiber optic upgrades, I would like to hear from you.<<

The July Lightwave Magazine did a piece on TCI's buildout and upgrade strategies that fits your needs here to a "T" [no pun intended], listing technologies, locations and time frames.

broadband-guide.com:80/lw/broadband/broad798.html

Hiram, I think you'll enjoy this one too. It's posted below. Enjoy,

Frank C.
=========================
Broadband, July 1998

As prices fall, DWDM becomes the transparent choice

After more than a year of restructuring its cable holdings, broadly
deploying digital set-top boxes, but doing little in the way of
network upgrades, TCI Communications (Denver, CO) is gearing
up for an ambitious hybrid fiber/coaxial-cable (HFC) upgrade
program. One of the goals of the upgrade is to achieve
"end-to-end transparency" in the optical portion of its network.

Technology and market trends have given TCI increased
confidence in the market potential of high-speed data services and
"narrowcast" and "on-demand" digital video services. Thus, the
company's network engineering group has focused on developing
a highly scalable platform that can cost-effectively evolve to
support ever-higher penetration and usage levels for such services.

In the process of evaluating alternative architectures, Oleh
Sniezko, TCI's vice president of engineering and winner of the
1997 scte-sponsored Polaris Award for his work in the
fiber-optics field, became convinced that the best approach for
TCI was to deploy dense wavelength-division multiplexing
(DWDM) in its HFC networks.

While Sniezko had been considering such an approach for some
time, it was only recently, he says, that DWDM costs began to
decrease sufficiently to find a place in TCI's network design. The
main driver of these cost reductions is the intense demand for
DWDM technology for use in long-haul baseband digital-transport
networks to support today's explosion of data traffic. Although
HFC networks alone might not drive massive demand for DWDM
equipment, observed Sniezko, why not ride the rapid
cost-reduction curve driven by another segment of the
telecommunications industry?

The result of the marriage of DWDM and HFC networks,
according to a paper co-authored by Sniezko and Tony Werner,
TCI's executive vice president of engineering and technical
operations, is "end-to-end transparency" or "invisible hubs." TCI
has concluded this approach is the best fit with its business plan
and mix of cable holdings.

In the HFC architecture most commonly used during the past few
years by major multiservice organizations (MSOS), signals are
delivered from headends or primary hubs to secondary hubs via
1550-nm optics. At the hubs - which may also house Synchronous
Optical Network equipment as well as modems, routers, and
cache servers for high-speed data services - these 1550-nm
optical signals are converted to RF and then back to optical for
transport on 1310-nm lasers. The 1310-nm lasers serve perhaps
two neighborhood nodes apiece.

According to Sniezko, TCI began to reconsider this
1550-to-1310 approach after deploying it in Hartford, CT, where
the company simultaneously launched new digital video, voice, and
high-speed data services. The result, says Sniezko, was secondary
hubs that had mushroomed into large, expensive facilities.

By using DWDM, TCI will be able to greatly simplify its
secondary hubs (see figure), moving equipment such as routers
and servers back to the headend and eliminating the need for the
optical-to-RF-to-optical gear that would otherwise be needed at
these hubs to deliver narrowcast services. And because it will use
DWDM, a passive technology moving quickly down the cost
curve, to load up to eight packages of narrowcast quadrature
amplitude-modulated digital services onto a single fiber running
from the headend to each hub, TCI will also be able to achieve
savings in both fiber and electronics costs.

One trade-off in this approach is that nodes will either require
additional optical receivers or, if combined optically, will
experience a certain amount of carrier-to-noise degradation. Thus,
while greatly simplifying the hubs compared to more "traditional"
HFC designs, the TCI approach may involve somewhat more cost
and complexity at the node.

At a presentation in May of the paper he and Werner wrote,
Sniezko reported that in the few months since the paper was first
prepared, DWDM and 1550-nm optoelectronics prices had
declined by 10% to 20%, resulting in total incremental system cost
cuts of 5% to 10%. TCI anticipates that by the end of 1998, these
costs will undergo an additional 20% decline.

Though vendors say that employing DWDM on the return path
from hubs back to the headend is considerably more expensive
today than the more common "frequency-stacking" approach,
Sniezko is convinced that the former is the smarter long-term
move. It will provide more flexibility to accommodate future
upstream traffic growth or changes in upstream frequency
assignments.

According to Sniezko and other industry sources, current price
quotes for externally modulated narrowcast transmitters are
approximately $7500, with quotes for direct-modulated devices in
the $5000-to-$6000 range and falling.

In terms of narrowcast transmitters, Sniezko says TCI is planning
to initially deploy one unit per 10,000 homes, with plans to
incrementally add wavelength-specific transmitters as demand
warrants. The expectation is that eventually the mso may deploy a
dedicated narrowcast transmitter for each 1000 homes it reaches
with narrowcast services.

To date, TCI has awarded stand-alone projects that combine
1550-nm technology and DWDM to Harmonic Lightwaves and
antec for cable systems in Vancouver and Seattle, WA,
respectively. At present, both of these vendors employ direct
modulation in their 1550-nm narrowcast transmitters, whereas
several other vendors appear to be focusing on externally
modulated narrowcast devices.

TCI's DWDM rollout plans called for concept testing in May using
several hubs, followed by deployment this year of a basic DWDM
infrastructure capable of feeding HFC plant in TCI systems
passing 3.5 million homes.

Other MSOS to follow?

In terms of the domestic market, TCI may go it alone, at least in
the near term, in its pursuit of a combination 1550-nm/DWDM
architecture. One reason is that most other major MSOS are
much farther along than TCI in their upgrade plans, with a
substantial portion of their networks either fully upgraded or well
into their design phase based on other approaches to HFC
networks.

While most other large operators are pushing hard to get the bulk
of their networks upgraded by 2000, the large number of system
acquisitions and swaps that have occurred over the past few years
could extend the current period of heavy construction activity
through 2003. The fact that most of these newly acquired systems
will be integrated into existing clusters suggests that when they are
upgraded, they will employ the same basic architecture already
deployed in other, previously upgraded, portions of these clusters.

Nevertheless, at some point, these MSOS are likely to find that
their narrowcast services - especially bandwidth-hungry
video-on-demand (VOD) - will require additional capacity in their
1550-nm transport networks. In the early stages of VOD rollouts,
these MSOS may be able to load a certain amount of narrowcast
traffic on their existing 1550-nm transmitters, which in many cases
are being initially loaded with only 40 analog channels per
transmitter. This, however, is likely to support only a few
percentage points of penetration for VOD services. Once this
penetration level is exceeded, these MSOS will need to add
capacity to their 1550-nm networks.

Because they have already deployed fiber-rich backbones and
traditional HFC networks (i.e., full-blown hubs feeding nodes via
1310-nm lasers), these MSOS will face different cost equations
than TCI in terms of the relative value of DWDM solutions.

For example, instead of using DWDM for narrowcast services,
these MSOS may choose to use some of their dark fiber to
transport up to four 200-MHz narrowcast digital tiers on
broadcast-capable 1550- nm lasers. This approach could support
VOD penetration up to 20% or even higher. This suggests that
these MSOS may not have a compelling need to adopt DWDM
solutions in the foreseeable future, unless VOD shows itself to be a
very popular high-penetration service.

On the other hand, if the price and performance of DWDM
systems continue to improve dramatically, as TCI expects, these
other MSOS could begin to shift towards a DWDM migration
path even if VOD and other narrowcast traffic does not lead them
to physically run out of fiber capacity on their 1550-nm transport
links.

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