1. technology and computing

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Why Do We Need Fiber?
(The need for more speed)
A Study on Video Over IP and
the Effects on PON Architectures
Why Do We Need Fiber?
(The need for more speed)
A Study on Video Over IP and the Effects on
PON Architectures
It can be argued that eventually, everything will be IP; Voice, Data, Video and even wireless,
completing the “IP Quadruple Play.” When and how soon is anyone’s guess, but the impact
on existing and future networks is going to push the need for more speed (bandwidth).
IP to and in the home will usher in a new range of entertainment and services:
− Voice over IP (VoIP)
− IPTV (SDV – Switched Digital Video)
− Music Distribution
− Personal Video Recorder (PVR)
− Video On Demand (VoD)
− High Definition TV (HDTV)
− Interactive Television
− IP Enabled Appliances (Smart Appliances)
− Security, Environment (Smart Home)
Of these services, video is the most demanding in terms of bandwidth and more
significantly, how we view the quality of the entertainment (QoE). CED magazine has
written several articles highlighting video bandwidth needs such as; “The Big Squeeze,”
by Craig Kuhl, Contributing Editor, April 1, 2006 and “Bracing for the Impact,” by Jeff
Baumgartner, Editor in Chief, CED magazine and xOD Capsule, July 2006.
A Study on Video Over IP and the Effects on PON Architectures
IPTV
So, what is IPTV? For many, the acronym conjures up
visions of hundreds of “on-demand” entertainment
channels delivered anytime, anywhere. IPTV (Internet
Protocol Television) describes a system where a digital
television service is delivered using the Internet Protocol
over a network infrastructure, which may include delivery
by a single broadband connection. For residential users,
this type of service is often provided in conjunction with
Video on Demand (VoD) and may be part of combined
Internet Services such as Web access and Voice over IP
(VoIP), where it may then be called Triple Play. Anything
over IP is typically supplied by a broadband operator
using a single infrastructure. It promises total control by
the user to customize their multimedia experience for
true interactive uni-casting entertainment and services.
For many operators, IPTV holds the allure of tapping
into new revenue sources with the delivery of advanced
multimedia services over broadband networks.
IPTV is being enabled with the transition of moving from
an analog format to an all-digital format. Advances in
video compression techniques are making it easier to
deliver both standard and high definition audio and
video. The growth in bandwidth, coupled with digital
video and better compression techniques, broadband can
be delivered to an ever-increasing subscriber base over
anything Digital Subscriber Line (xDSL) or passive optical
networks (PON) networks. With increased consumer
demand fueling the fire, competition is on the rise.
As competition grows fiercer, what’s the best way to
deploy IPTV? The answer, there is no single answer.
Today, the basic delivery mechanisms include Digital
Subscriber Line (DSL), Passive Optical Networks (PON) as
in fiber-to-the-home (FTTH), traditional CATV over Hybrid
Fiber Coax (HFC), or some combination. Each has its
advantages and challenges.
This study investigates the key elements of IPTV over PON
deployments by addressing the following four aspects:
Technology: What are the enabling technologies and
their availability timeline?
Capacity: What are the differences between various
PON implementations? Can they meet the service
requirement?
Cost: What are the cost differences among various PON
options?
Business: How are the services priced? What is the
impact on revenues? Is cost a significant portion of the
revenues?
Technology
Starting with a brief bit of history about IPTV and some
of the standards that dictate how we deliver video
combined with audio over an all IP format. Digital
Page Broadcast Satellite (DBS) (i.e. satellite TV) is not discussed
in great detail.
Direct Broadcast Satellite (DBS) is a term used to
refer to satellite television broadcasts intended for home
reception, also referred to as direct-to-home signals. It
covers both analog and digital television, radio reception,
and is often extended to other services provided by
digital television systems including limited video-ondemand and interactive features. A "DBS service" usually
refers to either a commercial service, or a group of free
channels available from one orbital position satellite
targeting one country. DirecTV and EchoStar are a couple
of examples.
Typical xDSL Development and the Moving
Picture Experts Group (MPEG)
With current video compression technologies, neither
Symmetric High Bit-Rate Digital Subscriber Loop (SHDSL)
nor Asymmetrical DSL (ADSL) can provide the bandwidth
required for IPTV. ADSL2+ at 26 Mbps and Very highspeed DSL (VDSL) at 50 Mbps offer more bandwidth,
but the tradeoff is in the distance. Subscribers need to
be close to the Central Office (CO) or remote terminal
as the speed over any xDSL network decreases over
longer distances. Many operators find IPTV deployment
over xDSL more attractive given existing investments
in the copper plant and the need to deliver services
quickly. However, one of the key problems in xDSL is
the delivery of standard definition and high-definition
TV over MPEG2. With MPEG2, HDTV currently requires
approximately 20 Mbps per channel compared to 2.5
– 3.5 Mbps for standard-definition TV. (See the Table 1
below for broadcast bandwidths of MPEG2.)
<0.384 Mbps Video conference
(MPEG4)
<1.5 Mbps Video in a window
(MPEG1)
1-2 Mbps VHS quality full screen (MPEG2)
2-3 Mbps
4-6 Mbps
8-10 MBPS
12-20 Mbps
Broadcast NTSC
Broadcast PAL
Professional PAL
Broadcast HDTV
(MPEG-2)
(MPEG-2)
(MPEG-2)
(MPEG-2)
27.5-40 MBPS DVB satellite multiplex (MPEG-2 Transport)
32-40 Mbps Professional HDTV
(MPEG-2)
34-50 Mbps Contribution TV
(MPEG-2-1)
140 Mbps
168 Mbps
216 Mbps
270 Mbps
1-1.5 Gbps
Contribution HDTV
Raw NTSC
Raw PAL
Raw contributin PAL
Raw HDTV
(MPEG-2-1)
(uncompressed)
(uncompressed)
(uncompressed)
(uncompressed)
Table 1. Bandwidth Requirements Under MPEG2 Standards
MPEG4 is the next step in compression techniques and
is a standard similar to MPEG2 that primarily compresses
the audio and video (AV) digital data. Introduced in late
1998, MPEG4 is the designation for a group of audio
and video coding standards and related technology
agreed upon by the ISO/IEC Moving Picture Experts
Group (MPEG). The services used over the MPEG4
A Study on Video Over IP and the Effects on PON Architectures
standards include video on the web (Streaming Media),
CD distribution, conversation (videophone), and
broadcast television. MPEG4 uses enhanced features of
MPEG1 and MPEG2 and other related standards, while
adding new features such as (extended) Virtural Reality
Modeling Language (VRML) that supports 3D rendering.
Other MPEG4 features include object-oriented composite
files (including audio, video and VRML objects), support
for externally-specified Digital Rights Management, and
various types of interactivity such as video on demand
(VOD). Most of the features included in MPEG4 are left
to individual developers to decide whether to implement
them, and this has caused some of the delay in making
MPEG4 commercially available. This means that there
are probably no complete implementations of the
entire MPEG4 set of standards. In order to combat this
issue, the standards include the concept of "profiles"
and "levels" allowing a specific set of capabilities to be
defined and used in a manner appropriate for a subset of
applications and networks.
Requirements for Multiple Video Feeds
After investigating the drivers for more video feeds per
subscriber, the findings show that multiple video feeds
are no longer independently driven by the number of TV
sets per household. Today, 98.2% of all U.S. households
have a television set, and 74.3% of those households,
have two or more sets. (Source: Nielsen Media Research)
Another recent statistic shows that four of every five TV
sets sold today are HDTV Sets. (Source: Harvard Research)
Table 3 below shows the HDTV Subscriber Growth in
millions of households. (Source: The Yankee Group,
Company reports, public statements, NAB, NCTA.)
59.3
millions
60
57.5
43.9
45
42.2
The New Industry Standard
29.9
Already ratified as part of the MPEG-4 standard
— MPEG-4 Part 10 — and the ITU-T’s latest videoconferencing standard, H.264 are now mandatory for the
HD-DVD and Blu-Ray specifications (the two formats for
high-definition DVDs) and ratified in the latest versions
of the DVB (Digital Video Broadcasters) and 3GPP (3rd
Generation Partnership Project) standards. Numerous
broadcast, cable, videoconferencing and consumer
electronics companies consider H.264 as the video
codec of choice for their new products and services. This
adoption by a wide variety of open standards means that
any company in the world can create devices — mobile
phones, set-top boxes, DVD players and more — that will
offer the newly formatted HDTV specifications. Currently,
these devices are not yet ready for prime time and when
they will be released is uncertain.
The one area that has been settled with MPEG4 Part 10
is the need to compress the video and audio even more
making it easier for various network architectures and
their delivery mechanisms. (See the Table 2 below for
broadcast bandwidths of MPEG4 Part 10.) How many
video feeds that can be offered to the consumer is of
particular importance in delivering IPTV.
Use Scenario
Resolution and
Frame Rate
Example
Data Rates
Mobile Content
176x144, 10-15 fps
50-60 Kbps
Internet/Standard
Definition
640x480, 24 fps
1-2 Mbps
High Definition
1280x720, 24 fps
5-6 Mbps
Full High Definition
1920x1080, 24 fps
7-8 Mbps
30
19.3
12.1
15
27.5
16.2
7.1
8.3
3.4
0
2003
2004
2005
2006
2007
2008
Number HDTV Sets
Number Homes Receivin g HDTV Services
Table 3. HDTV Subscriber Growth
An additional driver in the push towards digital video
broadcasting is that the Federal Communications
Commission (FCC) TITLE VII—DIGITAL TELEVISION is
mandating the termination of analog broadcast by
February 2009. Studying the currents trends of the local
broadcast stations, these stations are not just going
digital, but they are using “high definition” digital. This
alone is going to place a burden on the current delivery
systems and the future delivery systems.
Title VII Mandates the addition of labels on analog TVs,
apprising consumers of the termination of analog broadcast
in February 2009. Calls for additional consumer education
on the upcoming digital transition, including the formation
of a DTV Working Group on Consumer Education, Outreach,
and Consumer Education. Allows "down-conversion" of
digital signals to analog by cable operators seeking to serve
their analog customers.Reinstates the FCC's 2000 rules
requiring video description of digital programming, designed
to serve sight-impaired audiences.”
Table 2. Bandwidth Requirements
Under MPEG4 Part 10 Standards
Page A Study on Video Over IP and the Effects on PON Architectures
PON Bandwidths and MPEG Comparisons
This section will focus is on the support of IPTV by various PON architectures, including Broadband PON (BPON), with data
rates of 622/1.2 Mbps Down Stream (DS), Gigabit Ethernet PON (GEPON), with data rates of 1.2 Mbps DS, and Gigabit
PON (GPON), with data rates of 2.4 Mbps DS.
Based upon the timeline in Table 4, deployment strategies should take advantage of mature technologies such as MPEG2 and BPON while ensuring an upgrade path to the new technologies of GEPON and GPON as well as MPEG4.
First Major PON
Deployments
2001
2002
2003
2004
2005
2006
2007
2008
PON
Systems
commercially
available
BPON 622Mbps
1:32
G.983
Standard
Amendment
Ratified
BPON
1.25Gbps 1:32
802.3ah
Standard
Ratified
GEPON
1.25Gbps 1:32
G.984.3
Standard
Ratified
GPON 2.5Gbps
1:32/1:64
Systems
commercially
available
Components
commercially
available
Components
commercially
available
Systems
commercially
available
Components
commercially
available
Systems
commercially
available
Video Compression
MPEG-2
Systems
commercially
available
Components
commercially
available
H.264
Standard
Ratified
MPEG-4 Part 10
Content
Provider
Adoption
Systems
commercially
available
Service Offer
Total SD Channels
300
325
350
Total HD Channels
15
25
35
2001
2002
2003
2004
2005
2006
2007
2008
Table 4. Timeline for PON Bandwidths, Video Compression, and Service Offering
Capacities
PON Capacities
The objective when examining the PON capacity is to
determine whether a particular PON implementation can
meet a given service bandwidth requirement. This is not
only important in the southbound PON Port capacities,
but more importantly in the northbound interfaces where
multi-casting techniques will be initiated.
PON capacity must meet maximum usage without video
blocking for any given take rate. The PON architecture
must be engineered to handle regular usage by the
given take rates and have the ability to ensure video
service during peak times in the network. Individual PON
capacity determines the maximum number of video feeds
per subscriber, when the video compression techniques
are initially set at the MPEG2 Standards. Again,
multicasting is going to be critical in the ability of any
PON architecture to be able to provide adequate video
services to the subscriber.
PON Capacity
1:N Split
N subs
CO
1:N Split
N subs
1:N Split
N subs
OLT
OLT Trunk Capacity
(North Bound Interface)
Exhibit 1. PON Capacities in the Northbound and
Southbound Interfaces
Page A Study on Video Over IP and the Effects on PON Architectures
OLT
Regular Usage
PON
SDTV
Channel
Multicasting
SDTV channel
multicast group
HDTV
SD VOD
HD VOD
HDTV channel
multicast group
SDTV
HDTV
SD VOD
HD VOD
Distinct SD video
streams (s)
Engineered for
Maximum Usage
PON
All channels
are unicast
Distinct HD video
streams (h)
Exhibit 2. PON and OLT Capacities by Services
As shown in Exhibit 2, channel lineup and VOD usage
may result in changes in the Optical Line Termination
(OLT) trunk capacity to the video head end. Depending
upon the VOD services offered, channels may utilize
multicasting techniques or they may be unicast.
Multicast is the ability of one network node to send
identical data to a number of end-points. (Usually
associated with multicast video techniques where the
source will send a single stream and multiple end-points
will accept the stream.) Multicast is the transmission
of information to a group of recipients via a single
transmission by the source, in contrast to unicast or
100
broadcast. In IP multicast, there is a one-to-many
transmission, where a host may join or leave a group at
any time. Unicast is the transmit operation of a single
PDU (protocol data unit) from one source to a single
destination. In Unicast video, this is one channel delivered
to a single interface device. Point-to-point transmission
requiring the source to send an individual copy of a
message to each requester.
By using multicast techniques, the PON network will be
able to distribute the total PON bandwidth allocation
more efficiently. With unicast, both the OLT and PON
trunk capacities will increase significantly.
Engineering for Targeted
Take Rates
Bandwidth Requirement per PON based on
Maximum Usage (Normalized)
90
Much of PON capacity is based
upon the subscriber take rate.
Not all PON networks are
going to be fully utilized with
a 100% take rate and with a
100% Video Services take rate.
As shown in Exhibit 3 below,
there are huge differences in
bandwidth requirements at
different take rates.
80
70
60
50
40
30
20
10
0
Video Service
Take Rates
Premium 20%
Standard 20%
Premium 30%
Standard 10%
Premium 40%
Standard 0%
Premium 50%
Standard 50%
Premium 75%
Standard 25%
Premium 100%
Standard 0%
Exhibit 3. PON Bandwidth in Reference to Video Service Take Rates
In Exhibit 3, some assumptions
are made in regards to the
number of premium and
standard channels offered
for “bundled services.” Here,
the assumptions are that for
the premium services bundle,
there are three (3) Standard
Page A Study on Video Over IP and the Effects on PON Architectures
Definition Video Feeds, and two (2) High Definition
Video Feeds. For the standard services bundle, there are
two (2) Standard Definition Video Feeds, and one (1)
High Definition Video Feed. Initially, the video services
are based upon MPEG2 standards with a single High
Definition Data Rate set at 19.2 Mbps, and the Standard
Definition Data Rate set at 3.5 Mbps.
Conversely with the PON Deployment Groups, only the
number of subscribers or split ratio will vary.
As you will see in Exhibit 4, when bandwidth
requirements are set in place for each PON architecture
the groups will deliver the same capacity per subscriber.
In using Exhibit 4 graph, use the corresponding Table 5 to
review actual bandwidth requirements based upon split
ratios and PON Technologies.
Downstream
Bandwidth (Mbps )
II
III
IV
The PON Effective Capacity is the number of distinct
video channels allowed per subscriber. It measures the
true video transport capability by combining the impacts
of video compression and deployment groups.
I
2.5
1.25G
GPON
622
BPON
GEPON
4 8
16
32
64
1 28
Subs per PON
(or split ratio)
Exhibit 4. PON Bandwidth Requirements by Split Ratio
Video Compression Gain
DEPLOYMENT
GROUPS
MAX CAPACITY
PER SUBSCRIBER
IV
DEPLOY
GROUPS
MPG-2
MPG-4
Tier-5
16 x n Channels
156 Mbps
IV
Tier-4
Tier-5
Tier-4
8 x n Channels
III
78 Mbps
III
Tier-3
Tier-4
Tier-3
4 x n Channels
II
39 Mbps
II
Tier-2
Tier-3
Tier-2
2 x n Channels
I
19 Mbps
I
Tier-1
Tier-2
Tier-1
1 x n Channels
Table 5. PON Deployment Groups
Page Effective Capacity
Table 6. PON Effective Capacity
A Study on Video Over IP and the Effects on PON Architectures
Cost
PON Cost Components
PON costs for components and interfaces will change
over time relative to different PON architectures. Today,
typical BPON costs are significantly lower than GEPON
or GPON simply due to the maturity of the technology
and the availability of the chip sets. However, when
comparing the cost to technology, BPON may lack the
bandwidth requirements needed to provide adequate
support for Video over IP. When looking at the total cost
for any PON deployment, the findings show that the
PON Central Office Electronics and installation accounts
for only about 8% of the total cost. While the outside
plant (OSP) hardware and labor typically account for only
about 40% of the total costs and the Customer Premise
Equipment (CPE) and CPE installation account for over
50% of the total cost.
The PON equipment component costs are found in the
northbound network interfaces that physically connect
the Video Head End to the PON OLT, the common OLT
equipment, and the PON interfaces to the outside plant.
Research presents a clear positive relationship between
technology changes and the interface costs. Higher line
rate, higher split ratio and newer technology all lead to a
higher PON interface cost.
As stated above, BPON is expected to incur a lower initial
cost due to its technology maturity and higher volume,
while GPON is expected to have a faster cost reduction
rate. This may be partially due to the spreading out
of the GPON cost over 64 subscribers over time and
as MPEG4 becomes readily available. When that time
comes, the cost differences between BPON and GPON
will become less.
OLT
Network
Interfaces
Common
Equipment
ONTs
PON Interfaces
Home
Gateway
Home
Gateway
Switched Digital
Video Head End
Metro
Core
PON OLT
CO
Home
Gateway
Exhibit 5. PON Equipment Component Cost
Page A Study on Video Over IP and the Effects on PON Architectures
PON Revenues
Several revenue streams were realized when comparing
PON architectures, which lead us to consider a few
options. 1.) Is this a Greenfield deployment where as
the incumbent, I can expect or should expect 100 %
take rate where all the service revenues are new? 2.)
Am I over-building myself where the existing subscribers
already were my customers for voice and data, and the
only new revenue streams will come from video. 3.) Am
I overbuilding myself to stem the tide of competition
coming into my territory? If so, am I forced to move into
a copper solution first?
Triple play services represent significant revenues. Hence
there may be a high opportunity cost for delaying
deployment and losing market share.
Relative Cost
100
90
80
70
60
50
40
30
20
10
0
622M
BPON
1:32
1.25G
BPON
1:32
Cost increase
due to higher
line rate
1.25G
GEPON
1:32
Cost increase
due to newer
technology
1.25G
GPON
1:64
Cost increase
due to higher
s plit ratio
Cost increase
due to higher
line rate
Exhibit 6. PON Interface Cost
Page 2.5G
GPON
1:32
2.5G
GPON
1:64
Cost increase
due to higher
s plit ratio
2.5G
GPON
1:128
Cost increase
due to higher
s plit ratio
A Study on Video Over IP and the Effects on PON Architectures
100%
Revenues
GEPON 1.25G, 1:32 Capex
GPON 2.5G, 1:64 Capex
80%
BPON 1:16, 622M Capex
60%
40%
20%
0%
2006
-20%
2007
2008
2009
2010
2005
-40%
Exhibit 6. PON Revenues vs. Expenses
Exhibit 6 shows us that in 2005, Capex spending for PON architectures exceeded revenues (Source: Verizon financials
2005). However, with MPEG2 Video already in-place and the advent of MPEG4 on the horizon, the additional revenue
that video will bring far out-weighs the risk of not deploying PON.
Service Take Rates
100%
90%
80%
40% video
subs by
2010
70%
60%
64% HIS
subs by
2010
50%
40%
30%
3P Premium
20%
3P Standard
10%
POTS + HSI
POTS
0%
2005
2006
2007
2008
2009
2010
Exhibit 7. PON Forecasted Take Rates
When studying service take rates, it is assumed that 40% of all subscribers will be taking video and 64% will subscribe
to High Speed Internet by 2010. A 40% triple play take rate translates to 60%+ revenue or $1.8 million per serving area
(SA) by 2010, where each SA encompasses approximately 2000 single family units or multiple dwelling units. For the
small business units, revenues and service take rates will vary. (Source: Yankee Group Forecasts for 2006 – 2010).
Page 10
A Study on Video Over IP and the Effects on PON Architectures
Summary
With current compression technologies, neither VDSL nor
ADSL2+ provides the bandwidth required for multiple
IPTV Channels. For MPEG2 compression techniques,
HDTV currently requires 19.2 Mbps per channel while
standard-definition TV requires 3.5 Mbps per channel.
Channel changing within IPTV requires a set-top box and
with DSL techniques this may mean that some latency
issues may manifest itself for HD programming even at
top VDSL speeds.
As an all-optical alternative to xDSL, PON offers greater
bandwidth at greater distances. Multiple customers can
be served by a single fiber through the use of optical
splitters, and unlike copper, fiber offers greater flexibility
by simply changing PON architectures. Depending on
the version of PON deployed, downstream data rates
can range from 622 Mbps to 2.488 Gbps on a single
fiber, with splitter ratios ranging from 1:16 to 1:128.
A GPON network delivering 2.488 Gbps with a splitter
ratio of 1:32 can offer 77.75 Mbps per customer making
it attractive for video delivery. However, even with
bandwidth of GPON, HDTV delivery may be problematic
until the advanced compression technologies MPEG4 are
commercially available.
Key Findings
• For the Telephony Providers, there is competition by
cable operators providing voice services and an everincreasing video service portfolio.
• Video on Demand (VOD) and High Definition (HD)
content is on the rise and the bandwidth requirements
make it essential in providing a robust fiber
architecture.
• The number of TV sets per household alone no longer
drives multiple video feeds, where channel hopping
and HD programming are the norm.
• ADSL2+ and VDSL have the initial time to market
capabilities, but may be limited in the future bandwidth
needs to offer video services that will match cable
operators’ video services.
• PON architecture offers enough bandwidth today for
competitive video service offerings with or without
MPEG4.
• BPON, GEPON and GPON work in the ATM or Ethernet/
IP backbones and BPON & GPON will work in either.
• Multiple PON bandwidth tiers are determined by line
rate, split ratio and video compression technology; not
BPON vs. GEPON vs. GPON.
• Video is a significant percentage of potential revenues
from the triple play or quadruple play services.
• There could be significant opportunity cost for inaction
or delayed action to capture revenues from the triple
play services offered through PON architectures.
Page 11
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