Light, PI Gig E - 2001 Annual Report see http://cookreport.com/lightipgige.shtml
2001-02-02 11:12:41
Light, IP and Gigabit Ethernet
A Road Map for Evaluation of Technology Choices Driving the Future
Evolution of Telecommunications - 2000 COOK Report Interviews -
Introduction to the 6th in an annual series.
Contrary to some opinions, the COOK Report finds that the Internet
revolution is not spelled dot com. The revolution is in fact to be
found in a total revamping of the transport of bits. While the dot
com empires of 1999 collapsed in 2000 the cost effectiveness of
pushing the Internet Protocol over glass yielded more dividends than
ever before.
A growing amount of telecom traffic has migrated to a growing amount
of fiber. The pure Internet play throws out SONET effectively
doubling available fiber in the case where redundant loops were
used. Whereas lighting each new fiber used to call for new bays of
OC-48 SONET equipment at perhaps $100,000 a bay and up, a strand can
now be lit at a gigabit by a $7,000 Ethernet switch on each end.
While gigabit Ethernet over glass is the current preferred Internet
way, ten gigabit Ethernet transport will be arriving by year's end.
If 40 lambdas per strand were high end in 2000, 160 is likely to be
common by year's end. With the completion of multiple metro fiber
build outs, end-to-end fiber may now be taken or granted by most
business customers. The explosion of bandwidth as the result of more
fiber and technology that squeezes more bandwidth from each strand
has meant that, in some instances, the delivery of a gigabit costs
about what a T-1 did a decade ago.
The bottom line is that telecommunications which is prepared to
forego traversing the legacy PSTN is now upwards of 1000 times
cheaper than that which powers a circuit-switched voice call. While
corporate managed VPNs have been able to avoid the PSTN for some
time, a new development has emerged in Canada where customer
management of optical wavelengths using the OBGP protocol holds the
promise that by year's end users of Canada's new public sector
gigabit Ethernet over fiber infrastructure will be avoiding carrier
clouds entirely.
At the basic levels of both transport and network management the
Internet revolution is shaping up to tell the PSTN that it is no
longer needed. In telephony meanwhile protocols are being developed
that will allow the diversion of large amounts of PSTN traffic to the
Internet. ENUM is the major such protocol. This will allow Internet
carriers to offer and deliver many services to PSTN attached phones
that the PSTN itself cannot negotiate. Other protocols such as
instant messaging are shaping up as coordinators for PSTN activity
and off on switches that can control Internet connected devices.
Fiber to the home is becoming more common and companies like World
Wide Packets are gearing up to make gigabit Ethernet termination
equipment that will give connected families, telephone, fax, high end
video, ordinary TV and data off of the same line. Canarie the
Canadian advanced internet agency has some interesting ideas about
these developments stating that Divergence rather than Convergence
may be the key to low cost fiber to the home. Here is a narrative
paraphrase of the language of a slide from the presentation 'Optical
Communities' in September 2000.
When people first started looking at Fiber to the Home (FTTH), they
deemed it to be too expensive because it assumed all services would
be converged - date, voice and video. They noted that expensive
terminal equipment would be required to segregate voice, data and
video services at the home. Meanwhile voice traffic has largely gone
wireless. Note that lifeline voice can significantly increase system
costs by demanding high reliability and depending for this on DC
battery power, 911 services. Perhaps it is time to conclude that the
big driver for residential broadband is not voice or video. It is
the Internet. Very soon Internet will carry video and second line
voice. So instead of building a converged network such as FSAN, HFC,
etc build an Internet network only. Divergence rather than
Convergence may be the key to low cost FTTH.
While the power of the new systems is awesome, there are additional
issues that will keep very interesting the life of anyone who must
evaluate these changes and plan a winning strategy for the future.
While one better be aware of the key differences in the power of the
technology when compared to the circuit switched world's way of doing
things, one also needs to understand that progress has, in this case,
waded out into new and uncertain territory. There are some growth and
scaling issues where the answers are not yet clearly understood.
For example readers should consider Bill St. Arnaud's paper on
scaling issues of Internet growth. <
http://www.canet3.net/library/papers/scaling.html> If the
suppositions in this paper prove to be correct, then the role of
backbones will have to be rethought and much Internet topology
rearranged. One of the developments that influenced his thinking
occurred on December 4, 2000 when Essex Corp announced an advance
that enabled it to push as many as 4,000 lambdas down a single strand
of fiber. On December 8 St. Arnaud posted the following to his
Canarie mail list.
"[Here are some excerpts from a recent article in Lightreading that I
believe illustrates the point that Ultra dense wave division
multiplexing systems is not about bandwidth, but connectivity. A
number of companies are starting to realize that today's Internet
architecture (which is still fundamentally based on the old telco
network model) will not scale. As intelligence moves to the edge, the
existing network architecture must grow at some function related to
the square of the number of users. However [the problem is what to
do] if the increase in the number of the customer's own wavelengths
and the fiber in the network only grows linearly? Intriguingly such a
customer owned network architecture starts to closely resemble the
neuron architecture of the brain. Perhaps mother nature long ago
discovered the most efficient architecture for distributed
intelligence? - BSA]"
From the December 4, 2000 issue of Lightreading....
http://www.lightreading.com/document.asp?doc_id=2760
"We don't need thousands of wavelengths for bandwidth, we need it for
connectivity," says Simon Cao, chief technology officer at Avanex
Corp. (Nasdaq: AVNX), a company that's developing high channel-count
wavelength systems. Cao figures that the availability of thousands of
channels in combination with tunable lasers will make it possible to
eliminate complex optical switches, by using wavelength routing
instead . That idea is the driving force behind all of Avanex's
developments, he says."
"Despite its careless capacity talk, Essex has also thought out how
to take advantage of the extra connectivity. Moodispaw reckons that
Essex's solution will be perfect for customer-owned wavelengths in
the access network. About 1 Gbit/s would be adequate to supply a
gigabit Ethernet line to a business. Each customer pays less for its
wavelength, but the service provider is able to sell to a lot more
customers, so everybody is happy."
What this means is that we likely soon see customer owned wavelengths
of a gigabit. Such wavelengths will be plentiful, affordable and
matched to the speeds of the Internet's basic gigabit Ethernet
end-to-end architecture. When only the rich and mighty carriers owned
fiber and the very expensive lasers that could pump bits and the even
more expensive SONET equipment that sustained the bits, we imagined
that bandwidth was a valuable commodity obtainable only from "on
high," or from upstream. Indeed the carriers recognized their
position and charged large sums for the scarce commodity that they
delivered.
This situation has dramatically changed. If you own a piece of fiber
in a metro area network, you can power that fiber with a lambda
delivered as gigabit Ethernet for a one time investment of about
$15,000. When you run out of bandwidth, adding the multiplexer
necessary to turn the one lambda into four is also affordable. In
this sense bandwidth can now be generated by customers and used very
cheaply at the edge of the network over hops that in ideal conditions
can be as much as 100 kilometers. Suddenly these customers can throw
cheap bandwidth at quality of service issues. Their whole outlook on
life starts to change rapidly. George Gilder was observed to say
that "the companies that exploit bandwidth recklessly, will win."
On January 29, 2001 Bill St. Arnaud observed "Although I may disagree
with Gilder on some of his predictions, I think he's gotten this one
right. To date most advanced optical network research is based
around the assumption that bandwidth is a precious and rare commodity
and therefore we must optimize the network topology and try to
extract every possible bit of capacity. One of the underlying
assumptions of the existing CA*net 3 network and proposed CA*net 4
network architecture is that bandwidth can be wasted. Rather than
concentrating on applications and technologies that optimize the use
of bandwidth, we want to concentrate on applications and technologies
that waste bandwidth but in doing so derive the maximum benefit for
the user - hence our focus on "customer empowered" optical networks.
There is no question in our mind with customer empowered networks
that bandwidth will be wasted, wavelengths will be orphaned and seen
from the perspective of a central carrier the network topology will
be less than optimum. But in a world of thousands of wavelengths and
near infinite bandwidth who cares? The true measure is whether the
customer can easily and rapidly deploy new broadband applications and
services."
"At CANARIE we are initiating a number of projects with this premise
in mind - OBGP which will allow customers to setup and tear down
their own wavelengths at will, WDD- wavelength disk drives will drive
new concepts in distributed super computing, object oriented
networking enables the wavelength to become a software object,
community based condominium fiber networks, and much, much more. Stay
tuned for more announcements and developments in this area."
Arnaud's words portend a seismic shift in the telecommunications
landscape. With the exception of some important qualifiers we
believe that he is correct. One must understand that, for the time
being, bandwidth is cheap only in proportion to the distance that it
must travel. Very high bandwidth sent over long distances is still
quite expensive. Bandwidth that must be provided on a corporate wide
scale for mission critical activities is also somewhat expensive.
What Arnaud is talking about will change the world. The only
question is how fast.
To sum up. Costs are falling. Depending on the regulatory
environment, the amount of capital necessary to become a small scale
telecommunications provider is rapidly shrinking. Independent back
yard gigabit Ethernet providers can deliver broadband services at a
fraction of the cost but equal in quality to what is accessible from
larger more traditional companies.
There appears to be a choice of two paths to our telecom future. One
is to go with the highly innovative pure Internet approach of gigabit
Ethernet over condominium fiber. Such a choice empowers the customer,
facilitates decentralization over centralized control and provides
small and innovative businesses with the environment that they need
in order to flourish. The other path is to try to fore stall the
innovation by squashing competitors with a massive vertically
integrated company founded on older technology and leveraging access
to content and over a network monopoly so pervasive that people will
find they have no choice but to buy it. What could be in store for
us all, if things go in this direction, was summarized by Scott
Cleland CEO of the Precursor Group on Friday January 19th, 2001.
"Precursor believes AOL-TW has budding 'Microsoft-like' potential to
grow increasingly dominant by being the leading national company that
brings together the various online interfaces (content, Internet
access, buddy lists, instant messaging, etc.) to become the de facto
consumer online access market standard much like Microsoft Windows
brought together the various desktop applications to become the de
facto consumer software market standard."
On the one hand, the AOL infrastructure, which, compared to what the
Canadians are doing, can most kindly be called archaic, has to be a
terribly attractive vision for the ILECs. After all, it will give
them plenty of time to finish depreciation of their copper plant. On
the other hand innovative Internet technology ventures have the most
to gain from taking the Canadian road. To facilitate making this
choice with more certainty, in this publication we offer a
recapitulation of COOK Report interviews on the shifting market
domain of the optical network. These interviews are unique in that
they treat complex key technical issues with attention to depth and
detail found no where else. We believe that they form a set of
resources that will permit readers to decide for themselves what
direction is most beneficial to the future of their enterprise.
As we ponder these developments, we realize that we may be standing
on the cusp of events that may overturn the economic structure of the
first five years of the commercial Internet. Then the largest
backbones, UUNET and Sprint, set the price of bandwidth and
determined conditions for connection to the Internet. But last week
WorldCom announced that it was debranding mighty UUNET and Mike
O'Dell, the chief architect of the Internet's largest global
backbone, left the company. The problem is that these services take
more and more resources to pay for ever larger routers and support
huge growth rates in traffic. It is beginning to look like revenue
derived from running such a facility may no longer match expenses as
the availability of alternative sources of cheap bandwidth and
Internet transit increases. For the largest backbones, sources of
power only a year or two ago may now be turning into liabilities. The
economics of bandwidth are in flux to such an extent that there is
growing suspicion that for many large players business models that
were sustainable five years ago have lead to the acquisition of huge
debt today and that the next year may bring a round of major
bankruptcies as the new economies of the technologies described in
this report render traditional business models based on old
technologies unsustainable.
In the end the path of the Internet as the stupid network driven by
these new technologies will predominate. We begin this six part
report with a section on the basic Internet architecture and
technologies of "Light, IP, and Gig E" to be followed by a section on
their adoption in Sweden, Holland and of course our long special
issue on Canada.
February 2 2001
For Information on how to obtain the full report please go to
http://cookreport.com/lightipgige.shtml
--
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