Advanced Access Architectures 2008

Market Studies

1394 Market and Technology Study
Advanced Access
Architectures 2008

Release : September 15, 2008

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In addition to providing complete background on Advanced Access Architectures (AAAs), this report is going to focus on the progress to date of AAAs (or in some cases the lack thereof), changes in architecture, and especially how we are changing our forecasts (and why) for Advanced Access Architectures (AAAs) development. It is also introducing for the first time extensive cost analysis of the various forms of AAAs, and comprehensive traffic (bandwidth) requirements analysis and forecasts affecting AAAs.

(Please note that we will use the terminology Advanced Access Architectures (AAAs) throughout this report to refer to the collection of FTTx architectures and their variations. We feel that this is more comprehensive than simply FTTx.)

This report, more than any of our past five reports on the subject, will focus on:

  • Bandwidth requirements, and options for obtaining that bandwidth
  • Costs of alternatives in AAAs
  • Forecasts for the acceptance of AAAs by customers
  • The impact of AAAs on legacy high-speed access systems (e.g., xDSL)

Reasons for a New Report

As this is our sixth major report on the subject, one may ask why we are writing a new report. The answer involves a number of factors that have changed which we will be covering in the various sections of the report. Included in these changed items are:

It has become apparent that we were too optimistic (as were the RBOCs) in terms of not only deployment (households passed) of AAAs, but also, and especially, cutover (households served) of the new AAAs. There appear to be structural limits as to how many homes Verizon or AT&T can cut over in a quarter. This, rather than demand, appears to be limiting how fast AAAs will actually be cut over. In addition, we are seeing a very clear and totally unexpected phenomenon of lack of focus by the major RBOCs on their other, legacy high-speed markets – the xDSL market. This lack of focus is causing a strong deterioration in those markets for high-speed additions. Naturally, this makes an attractive place of attack for the cable companies. We will be presenting our new forecast for the total high-speed market as a part of this discussion.

So we will be presenting our new forecast for deployment and cutover of AAAs, and all of the charts and statistical information in this report will be based on the new forecast. Naturally, these changes in forecast will make big differences to equipment and fiber suppliers, as well as all others involved in this program. To this point, we are proving an Appendix coving the quantitative equipment and fiber needs to meet our AAAs forecast.

Costs and Financial Impacts

Our material costs forecasts appear to be very consistent with actual experience, and there are therefore only minor, if any, changes in them in this report. However, the cost of actually installing an AAA in a customer’s home appears to have been underestimated. At least anecdotally, there appear to be indications that it may take as much as two men for a day to install AAAs in a customer’s home.

In addition, there is the twin impact of the major telcos continuing to lose main lines (wire lines) and the associated revenues, while the above-mentioned slowness of cutover of the AAAs is preventing data revenues from filling the gap.

We will be exploring these issues in some depth in this report.

BellSouth Properties

Since the acquisition of BellSouth by SBC, forming AT&T, there has been a question of what will be done with the BellSouth high-speed lines. BellSouth had a very active program in place of installing FTTC (fiber-to-the-curb) in their territories, and had succeeded in installing more than 1,000,000 lines at the time of the acquisition. This architecture is a compromise between FTTN (SBC’s architecture) and FTTP (Verizon’s architecture). It provided great bandwidth for high-speed Internet, but, as installed, is probably not suitable for video (particularly high-definition). The answer to this question appears to be becoming clearer, and that will be covered in some depth in this report.

In covering this issue, we will also investigate the quantitative differences in the three major architectures, FTTP (or FTTH), FTTC, and FTTN. In addition, as a part of this discussion, we will review the bandwidth capabilities of the various architectures, particularly focusing on VDSL2 and bonding.

Report Features

  • Direct input from the major carriers —
    • AT&T
    • Verizon
    • Qwest

  • Analysis of each RBOC Plan —
    • Deployment plans
    • Locations of deployment
    • Estimated costs
    • Services
  • New forecasts —
    • For AAA served households
    • For AAAs passed households
    • For equipment and fiber needed for PON and for FTTN types of AAAs
    • For costs of the AAAs
    • For the overall market for high-speed services (XDSL, cable modems, and AAAs)
    • All forecasts are offered as comparisons to nominally stated plans of the RBOCs and the author’s projections of what will actually happen.
  • New Cost material —
    • Comparing the fiber required for the various types of AAAs
    • Comparing budget impacts for AAA deployment
    • Plant segment costs
    • Video costs

  • New material on bandwidth demand and sources —
    • Forecast of bandwidth required in the residence
    • Review of available bandwidth sources
    • Review of other available and advanced alternatives for generating more bandwidth

  • Discussion of next-generation PONS
    • WDM-PONs — Detailed discussion and listing of vendors and other activities
    • 10-GPONs — Detailed discussion of architecture, and current status

  • Discussion of the market drivers and the competitive situation

  • Review of over 50 major vendors in the area

  • Appendixes covering —
    • Equipment and fiber requirements for AAAs.
    • Access architectures
    • Approaches to video delivery — IPTV.

  • This report contains nearly 200 pages and is profusely illustrated with over 100 figures, charts, graphs, and drawings.

Table of Contents


Table of Figures

The Lightwave Network Series of Reports

The Lightwave Network

The Lightwave Series of Reports

General Reports on the Network

General Market Reports

Specific Systems Reports


Reasons for a New Report


Costs and Financial Impacts

BellSouth Properties

This Report


Why AAA?

Comments on Triennial Review Results

Original Schedule

Differences of the RBOCs

Market Competitive Analysis

AAA as the Light Sword of the RBOCs

RBOC Loss of Main Lines

Post-merger Competition

RBOC Purchase of IXCs

RBOCs vs. Cable Companies

New High-Speed Access Forecast

Cable Companies vs. Satellite Companies

The Need for Capacity

How Much Bandwidth Is Enough?

Basis for Estimating Needs

Meeting the Bandwidth Needs

The Current Options

FIOS – FTTP Bandwidth Capacity


Alternatives to Achieve the Required Bandwidth

Pair Bonding

Reduce the Distance

Hybrid FTTN – FTTC


NGPONs - Advanced Options - 10-GPON and WDM-PON



Vendors of WDM-PON

Other WDM-PON Activities

Vendors of WDM – Listing and Summary of Status





LG Electronics





Cost Analysis of AAA

Costs of AAAs




Fiber Requirements for Various Advanced Access Architectures

BellSouth's Fiber to the Curb (FTTC)

AT&T's Fiber to the node (FTTN)

Verizon’s FTTP (Fiber to the Premise)

Analysis of Architectural Differences

AT&T’s New Plans for BellSouth – a Hybrid FTTC/FTTN

Impact of Loss of High-Speed Access Lines

RBOC Plans—RBOCs' AAA Plan — The Lightwave Is Back!

Verizon Plan

Verizon — Physical Description

Verizon Vendors

Verizon — Size of Rollout

Verizon — Services

Verizon as an Overbuilder

AT&T Plan

AT&T — Physical Description

AT&T Vendors

AT&T — Size of Rollout

AT&T — Uverse Services




AT&T U-verse Video Services

High-Speed Access U-verse Services

BellSouth Plan

BellSouth — Physical Description



AT&T’s New Plans for BellSouth

Qwest Plan



Comparing the Plans of the RBOCs

Operations Savings Estimates

Growth Comparisons

Summary of Announced Plans



Bell South


Summary information on the Announced Plans

Announced Plans — Quantitative Analysis

Announced Plans — Size

Announced Plans — Costs

Announced Plans – Cost by Plant Segments

Announced Plans – Capital and Budget impacts

Announced Plans – Video Costs

Forecast for AAAs

Forecasts for Deployment





Deployment Forecast Summary





Forecast Size of Deployments

Forecast of Homes Passed

Penetration Rates

Growth of AAA and Reduction in xDSL

Technology Forecast

Forecast Technologies by Type

Forecast PONs — GPON vs. BPONs

Forecast Costs

Unit Cost Tables

Forecast Plant Segment Cost

Forecast Capital Costs and Budget Impacts

Forecast Video Costs

Vendors of the Light Sword

Requirements for a Successful Vendor

Possible Consortiums

Selected Vendors

Vendors of GPONS

Vendors Listing

Summary of Vendors

Detailed Listing of Vendors

Acterna (acquired by JDSU)



Advanced Fibre Communications Inc. (AFCI) (Now Tellabs)


Alloptic Inc

Amino Technologies plc

AOC Technologies

Avanex Corporation






Entrisphere Inc. (Acquired by Ericsson)


Fiberxon (Now Source Photonics combined with Luminent)

Finisar Corporation

FlexLight Networks (Defunct)


Genone3 Technologies Inc.

Hitachi Communication Technologies Ltd.

Humax USA Inc.

Iamba Networks

JDS Uniphase

Kreatel Communications AB (Acquired by Motorola)

LG Electronics

LightComm Technology






Novera Optics (owned by Nortel / LG JV)


O-Net Communications Ltd

Oplink Communications, Inc.

Optiviva Inc.

Optical Solutions (Acquired by Calix)

Osaki Electric Co. Ltd.

Paceon (Mitsubishi)

Passavé (Acquired by PMC-Sierra)


Quantum Bridge Communications (Acquired by Motorola)

Salira Optical Network Systems

Scientific-Atlanta (Cisco)


Source Photonics (Combined with Fiberxon and Luminent)

Tandberg Ltd. (Ericsson)


Terawave (Acquired by Occam Networks)

Tut Systems (Acquired by Motorola)

Vinci Systems, Inc. (Acquired by Tellabs)

Appendix I - Equipment and Fiber Requirements


PONs – OLTs, Splitters, ONUs

Equipment Requirements – PONS, OLTs, Splitters, ONUs – RBOC Plan



Total PONs – RBOC Plan

Equipment Requirements – PONS OLTs, Splitters, ONUs – IGI Forecast

BPONs – IGI Forecast

GPONs – IGI Forecast

Total PONs – IGI Forecast

Equipment for FTTN

FTTN Equipment Required – Plans

FTTN Equipment Required – Forecast

Fiber Needed

Fibers – Current RBOC Plans

Fibers – IGI Forecast RBOC Plans

Fibers Required – Summary and Comparison of Plans vs. Forecast

Appendix II - Access Architecture

Various Approaches for Fiber-based Access Architecture

Fiber to the "X"

xDSL Versions

Design Details for Current Plans

Fiber to the Neighborhood (FTTN)

AT&T's Fiber to the node (FTTN)

BellSouth's Fiber to the Curb (FTTC)

The RFP — PONs Will Set Us Free

What Are PONs?

The PON Design

Status of PON

Advantage and Disadvantages of PON

Types of PONs




The PON in the First RFP


Architectures to Meet the Needs

Appendix III - Approaches to Video Delivery



IPTV Architecture

IPTV Global Architecture

Super Hub Office

Video Hub Office

Serving Offices

IPTV Distribution and Access Architecture

IPTV Channel Selection


Table of Figures

Figure 1: Lightwave Network
Figure 2: Five Reasons for 'Why AAA Now?'
Figure 3: FTTP Schedule
Figure 4: Summary of Competitive Position
Figure 5, Verizon Wireline vs. Data Revenues
Figure 6, Verizon Loss of Main Lines vs. Data Revenue
Figure 7: Revised Competitive Structure Due to IXC Purchases
Figure 8: RBOCs Subsume IXCs and CLECs
Figure 9: RBOCs vs. Cable Companies
Figure 10: New (2008) High Speed Forecast
Figure 11: Adoption Rates of PCs and High-Speed Access
Figure 12: Cable Companies vs. Satellite Companies
Figure 13: Bandwidth Needs — MPEG4 Compression Technology
Figure 14, Forecast Access Bandwidth Requirements 2010
Figure 15, PONs' Bandwidth Capacity
Figure 16, VDSL2 Bandwidth vs. Distance
Figure 17, Predominant Advanced Access Architectures
Figure 18, BellSouth FTTC
Figure 19, AT&T Uverse (FTTN)
Figure 20, Verizon FiOS (FTTP)
Figure 21, Amount of Fibers for the Architectures
Figure 22, Length of Fiber for the Architectures
Figure 23, Fiber Costs of the Three Architectures
Figure 24, Fiber Cost per customer - Each Architecture
Figure 25, AT&T - BellSouth Hybrid FTTC
Figure 26, Fiber Required Upgrading to Hybrid FTTC
Figure 27: Verizon High-speed Access Lines — By Quarter
Figure 28, AT&T H-S Additions
Figure 29, FiOS States - 2008
Figure 30: Verizon Services
Figure 31: AT & T U-verse Video Services
Figure 32: North Texas U-verse Service Offering
Figure 33: AT&T U-verse High-speed Access Services
Figure 34, Comparison of Internet Access Speed Offered
Figure 35, Growth of AAAs thru mid-2008
Figure 36: Announced Plans Summary Chart
Figure 37: Announced Plans — Annual HPs
Figure 38: Announced Plans — HPs Cumulative Passed vs. Served
Figure 39: Announced Plan — Comparison to High-speed Accesses
Figure 40: FTTP Served Customer Cost Assumptions
Figure 41: FTTP Cost per Unserved (but passed) House
Figure 42: Assumed Cost for FTTN and FTTC
Figure 43: FTTP Announced Plan — Costs by Segments
Figure 44: Announced Plan — Capital Costs and Budget Impact
Figure 45: Segment Costs Including Video
Figure 46: Forecast Homes Passed Cumulative — All Technologies
Figure 47: Forecast Homes Passed Annually — By Company — All Technologies
Figure 48: FTTX vs. High-speed Accesses vs. US Households
Figure 49, AAA Growth vs. Legacy XDSL
Figure 50: Technology Type Cumulative — Forecast
Figure 51: Forecast Technologies — Homes Passed — Annual
Figure 52: Forecast Homes Passed — PONs vs. Other Technologies
Figure 53: Total PONs Forecast — RBOCs — Cumulative
Figure 54: Moving from BPONs to GPONs
Figure 55: Forecast BPONs vs. GPONs by Year
Figure 56: Verizon PON Forecast
Figure 57: AT&T PON Forecast
Figure 58: Served Customer Cost Assumptions
Figure 59: Cost per Unserved (but Passed) House
Figure 60: Assumed Cost for FTTN and FTTC
Figure 61: Forecast FTTP Costs by Plant Segment
Figure 62: Forecast Plan Costs by Architecture
Figure 63: Forecast Cumulative Cost and Annual Budget Impact
Figure 64: Video Costs as Related to Total Plan
Figure 65: Requirements for Successful RFP Vendor to First FTTP RFP
Figure 66, Possible Consortiums
Figure 67, Originally Selected Vendors
Figure 68, Newly Selected Vendors
Figure 69: GPON Selected Vendors
Figure 70, Summary of Vendors
Figure 71, Currently Planned PONs
Figure 72, Forecast for PON Implementation
Figure 73, Forecast Access Networks By Architecture
Figure 74, Chart of Equipment Requirements – BPONS – Plan
Figure 75, Chart of Equipment Requirements – GPONs – Plan
Figure 76, Chart of Equipment Requirements – all PONs – Plan
Figure 77, Chart of Equipment Requirements – BPONs – Forecast
Figure 78, Chart of Equipment Requirements – GPONs – Forecast
Figure 79, Chart of Equipment Requirements – All PONs – Forecast
Figure 80, Equipment Requirements - FTTN Plans
Figure 81, Equipment Requirements - FTTN Forecast
Figure 82, Fibers Needed Current Plans
Figure 83, Forecast Fiber Used By Technology
Figure 84, Comparison of Plan vs. Forecast for Fiber Strand Requirements
Figure 85, Fiber to the 'X' Varieties
Figure 86, Chart of Various xDSL Technologies
Figure 87: Fiber to the Neighborhood
Figure 88: Fiber to the node
Figure 89: Fiber to the Curb
Figure 90: PON Basic Arrangement
Figure 91: RFP PON — Central Office Portion
Figure 92: RFP PON — Outside Plant Portion
Figure 93: RFP PON Service Assignments
Figure 94: BPON/GPON Comparison
Figure 95: Typical GPON
Figure 96: Bandwidth Needs vs. Capabilities
Figure 97: Broadcast TV on BPONs
Figure 98: Broadcast TV
Figure 99: IPTV General Architecture
Figure 100: IPTV Global Architecture
Figure 101: IPTV Access Architecture
Figure 102: FTTP Architecture for IPTV
Figure 103: IPTV Hub Office Architecture
Figure 104: IPTV Channel Selection