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Telework Collaboration in High-Speed Environments

Executive Summary

Our Efforts have been aimed at three areas:

1. Identify improvements that have been observed and the metrics used to quantify the improvement due to telework environments and the key factors that affected the results. Identify work to date that demonstrates the value of real-time, visual environments as key enablers for collaboration.

2. Assess the state of the access technologies enabling high speed networking, architectures that are possible with these technologies, key factors that are affecting the deployments and gather enough information to asses the technical and business environment for the evolution of high speed access technology. This work then can be leveraged to build a business case model that can be used with Telework Customers and Partners to address the economics of providing true teleworking with visual collaboration. During the second quarter of the contract, this report has been updated to include cable technology for high speed access.

3. Identify tools and systems that have been developed for real-time effective collaboration. During the second quarter of the contract, we have looked at collaboration systems and efforts were carried out to create a video conferencing environment using Conference XP.

Collaboration Systems and Recommendation

There are a variety of enterprise-strength community tools that foster increased productivity in a networked environment. Virtual whiteboarding, among the fastest-growing tools in this space, encompasses a wide variety of applications, which enable users to write and draw at the same time, with changes instantaneously visible to all. A key to high performance and acceptability of Telework is video in conjunction with these distributed software tools to create true virtual meeting rooms and Telework environments that go across physical boundaries. Furthermore, these boundaries may extended across the country and international as well.

A major component of collaboration are tools that support the need to meet and share information. These tools should foster two way communication. A key difference between asynchronous communications such as email, file exchange, etc. and synchronous communications is that, in a real-time, synchronous communication environment people can build on each other’s ideas and true collaboration occurs in a way that the capability and results of the team in a team environment is greater than the individual capabilities one at a time. Collaboration is a result of interaction, and it is real-time teaming that creates the context for interaction. True real-time collaboration fosters idea creation. Ideas rarely arise through the inspiration of a genius; more commonly, they arise out of conversation and interaction—both of which are enhanced in a visual realtime environment

Virtual meeting software enables collaboration and is starting to gain widespread acceptance. Virtual meeting rooms can include screen sharing, virtual product demonstration, and tools where users can see, write and draw in common spaces in real time for all to see. Application viewing allows users to see other’s desktops and the applications they run on it. The advanced collaborative features coupled with video allow for advanced community interaction to take place, thus simulating real-life physical meetings. Thus, needed information is shared and conversations can happen quickly and more efficiently. Leaders in this space include Groove, eRoom, and Webex. However, we observe that these tools can be enhanced by integration with real-time video capabilities.Telework and Collaboration with Broadband Access Page 1 of 36

Some advanced capabilities have been implemented in a corporate intranet environment leveraging high performance transport since the application with video needs higher bandwidth than is typically obtainable via dial-up connections. However, in a larger DSL and Cable are needed at the minimum and two-way symmetric bandwidth for higher quality real-time video. Thus, the efforts of the Telework Consortium to enable higher bandwidth, symmetrical video enabled communications is very important to make true teleworking work. In an effort to build the next generation collaboration environment, we have looked at the market re what is available and how it can be improved and meet the need, if high bandwidth were available. Based on the information gathered, we are recommending the creation of a high performance collaborative work environment which consists of an integrated video system and collaboration tools, leveraging products available with customization tools. Current Systems do not integrated video conferencing. The Teleworks consortium is on the way with the Genesis Collaborative application framework as exemplified in the Internet Video Conferencing (IPVC) from Grant Holcomb at Tulane University and software from Groove. We are also looking at the Conference XP video conferencing software, which uses more standard protocols (e.g., RTP). It is currently designed to use servers on Internet2 and is an evolving research tool from Microsoft, in collaboration with Internet2 users. We recommend enhancing the current Telework demonstration capability with collaboration systems and creating a demonstration virtual meeting/workspace environment and demonstrate impact for a work environment scenario, not just the video conferencing by itself. An integration of the video capabilities with collaboration software could demonstrate that virtual collaboration can be as good as collaboration in the physical proximity and even better (since more advanced video, database, sharing, and other tools will be part of the new environment.) Security mechanisms for this collaboration environment for an “on demand group”, i.e., groups with changing membership, should also be integrated and demonstrated. CORPORATE Deployment Examples

IBM has implemented Lotus’ Sametime instant messaging product on a companywide basis. It is used several times each business day by more than half of all employees, in effect replacing telephone communication. Cisco uses instant messaging in similar fashion, as well as Video on IP for Video communications. IBM also uses an internal “e-meetings” system as an online meeting space, and almost all major public C-level presentations use e-meetings. The e-meetings software contains application sharing (so that participants can see PowerPoint or Freelance demonstrations, for example), audio-visual capabilities, and video-enablement. Skill Tap is one of the newest online collaboration tools at IBM. Skill Tap enterprise expertise software takes the form of Lotus’ Sametime conversations enabled by bots. When an IBM Skill Tap user has a business question regarding any issue, he can just send a standard Sametime message to the Skill Tap bot. The bot then forwards the query to a pool of experts, and the experts then are expected to return with a result. This process lasts generally between 15 and 30 minutes. Skill Tap has launched just recently at IBM and it is only now beginning to be publicized.

SECTION I - Examples of Collaboration Systems

eRoom’s www.eroom.com collaboration package, Digital Workplace, relies on the concept of virtual teams working in rooms focused on distinct issues. Room templates can be chosen from several provided or created from scratch. The user can then select members for the group and automatically have e-mail invitations sent out to confirm their participation. Once the initial process of creating a room is finished, users have access to a Windows desktop-like interface with customizable buttons to open specific parts of the room. Information to be shared can be made available to the entire group. Telework and Collaboration with Broadband Access Page 2 of 36

http://www.eroom.com/

Business requirements and goals that need to be met are displayed. Users can also alert others within an eRoom using e-mail announcements. However, video is not integrated and if it were, then the interactions would be much facilitated.eRoom supports integration with a wide variety of corporate applications. Microsoft Office is supported, so users can drag and drop Office documents and group edit during meetings. Microsoft Outlook integration allows users to synchronize their calendars and import events to and from eRoom. eRoom also offers integration with many popular enterprise database programs. Through the use of the eRoom API Toolkit, eRoom can also be integrated with corporate portals and other commonly used third-party software.

eRoom’s document management system is easily accessed and users can drag and drop any documents from Windows folders into the document folder. eRoom provides a complete hierarchy for documents, which users can modify by dragging and dropping files appropriately. eRoom also provides easi ly accessible options for setting file permissions.

There is a Project Calendar, which is shared by all members of an eRoom for meeting scheduling. Any member of an eRoom can schedule meetings beforehand using the Project Calendar or start at any time. This calendar can also be integrated with personal calendars. Within the meeting room, eRoom supports group editing of supported document formats, virtual whiteboards, and desktop sharing. eRoom also provides online awareness so users can communicate with and see who is online at any given time and also have real-time conversations, but integration with real-time video support is lacking. Private chat is also supported in addition to normal group chat features. The Project Inbox lets users see all e-mail messages related to that eRoom, e.g., meeting invitations and document review requests.

eRoom’s workflow seems quite well planned. Users can click on a document for review and designate the people to which it will be forwarded as well as the order in which to notify others, who would be receiving e-mail alerts asking them to review the document along with a link to the content itself. After one reviewer has finished editing the document, the workflow system automatically forwards a link to the edited document to the next reviewer in line. Versioning, and tracking of all changes is supported.

Groove www.groove.net has tools available for working on various types of content; synchronous editing of Microsoft Office documents, with many add-ons to expand functionality. Does not appear to have advanced workflow capabilities; Few options for integration with third-party enterprise software. However, it is relatively simple with a good user-friendly interface, beyond which lies a powerful tool with many innovative options and a great deal of customization. Workspace focuses on providing all necessary business tools within one environment, freeing a user from switching from application to application to complete his work and uses the concept of a “shared space.” Within this area, a small group can have access to the appropriate data and the tools needed to work with this content. Workspace’s interface is fairly intuitive and combines the functionality of many common enterprise applications. All documents and content are stored locally on users’ desktops, easily accessible to any member within the space. Through the integrated discussion forum, users can leave messages or suggest ideas that can then be elaborated or critiqued by fellow employees. Users can choose to fill a discussion thread in various ways. Integrated video and video conferencing would add much value. All documents and content within the shared space are encrypted, removing any security concerns. Nearly every feature in Groove allows users to set permissions dictating the access and modification of content.

Using the integrated awareness feature, users can see who is active in the shared space and exactly what content they are viewing or modifying. Groove’s innovative real-time editing tool lets users

Telework and Collaboration with Broadband Access Page 3 of 36

http://www.groove.net/

modify Word documents or view Powerpoint presentations simultaneously, allowing all parties to see the modifications as they are implemented. Furthermore, employees can communicate through text or voice in the included chat window. Additional integration with real-time video conferencing can add value. The content review process is also simple, since it allows employees to select reviewers, set deadlines, and record any changes made.

Groove Meetings is a scheduling tool that incorporates employee calendars and lets users set up dis -cussion times for anyone within a shared space. Using this last tool, employees can also designate meeting roles, create agenda items, and synchronize with Microsoft Outlook. The Project Manager tool lets users create groups to work on specific issues. Using this tool, project organizers can prioritize tasks, set deadlines, and preserve best practices by saving descriptions of successful projects. Groove also features several additional third-party tools and features a development environment and ability to integrate other enterprise data.

Groove Notepad and Outliner are note-taking tools during presentations and meetings. For design-oriented work, SketchPad allows users to hand-draw items and modify JPG and BMP images (Real time Video would make this better). Groove Pinboard serves as an informal reminder and alarm system and also lets users create polls to gauge opinion within the shared space. Also available for this purpose is Groove Forms, which allows users to create custom applications for entering and manipulating data.

iManage’s WorkSite suite by iManage www.imanage.com is a nice enterprise collaboration system to get work done. It is less of a meeting place than eRoom. It has good workflow capabilities and comprehensive document indexing features. The core collaboration functionality lies within iManage WorkTeam which facilitates the creation of virtual spaces where groups can work on projects. iManage provides several pre-built templates for creating spaces tailored to each group’s needs. Within the space, group members can store documents for review, letting iManage’s other main product, WorkDocs document management system, handle classification and organization. Enterprise managers can mete out roles to users within the group. Group leaders can create Task Lists, outlining agenda items and designating specific responsibilities to other users. Communication within the space occurs within discussion forums, where users can choose to receive automatic notification of any modifications or replies to postings. Calendar and scheduling functionality is included for meeting coordination. Users can also synchronize their WorkTeam calendars and Task Lists with Outlook or Lotus Notes.

Within the iManage’s WorkSite suite, WorkDocs categorizes documents and supports check-in/check-out for secure document editing and keeps detailed histories of document modifications. WorkRoute presents a good workflow-editing tool. Its GUI interface allows enterprise managers to send key documents to the appropriate people for review or approval processes. All such processes are saved, so users can automate this workflow for similar tasks. Managers can view detailed statistics on the review processes, noting problem steps within the procedure. Employees check their integrated WorkRoute Inbox for any necessary actions, and once they have handled their own responsibilities, WorkRoute automatically forwards the document to the next person as specified in the workflow. Managers can also check the status or progress of any process. These capabilities answer a key concern of managers – how to monitor and manage workers in a Telework environment.Using WorkKnowledge users can view and access all content available on WorkSite. Managers can also filter out important content on WorkDocs or preserve best practices used on a WorkTeam project. WorkKnowledge can also index and search data gleaned from outside sources such as Lotus Notes and Web sites. Custom functionality can be added to this collaboration product via the Worksite Server Development Kit. WorkSite is based on open standards such as Java and XML.iManage has announced WorkSite MP 3.0, providing tighter overall integration and improved


http://www.imanage.com/

workflow. New features in 3.0 include full J2EE compliance, fully written in Java, XML support, E-mail is fully integrated into the Workplace core repository, enhanced integration with Microsoft Word, Excel and Powerpoint including full support for OLE linking and LDAP implementation enhances security for workgroup access. Not clear if there are any plans for video conferencing and leveraging video capabilities.

QuickPlace by IBM/Lotus www.lotus.com Lotus QuickPlace is a very comprehensive enterprise collaboration tool. It also allows users to customize both its look as well as its operation. Lotus QuickPlace combines a set of collaboration tools into a user-friendly package. It has many advanced features and customization capability. QuickPlace’s operation centers on the creation of QuickPlaces, which are essentially virtual spaces for groups to work on projects. A simple browser-based wizard guides the creation of each QuickPlace. Group leaders can easily select individuals and assign roles for the project, upon which automatic e-mail notification is sent out to the appropriate parties. QuickPlace can be integrated with MS Office. Lotus’ own QuickEdit lets users create small documents and messages, ideal for discussion forums and message boards. QuickPlace offers several methods of communication within a group. Group chat features and private instant messaging is provided, however real-time video meeting room capability is not integrated. Group members can check their colleagues’ online presence since QuickPlace offers LDAP directory integration. Users can also create discussion threads through QuickEdit. For private group discussions or meetings, users can create QuickPlace Rooms where only designated group members have access privileges.

QuickPlace’s workflow and task management capabilities are easy to use. Group members can create task descriptions, assign due dates, designate milestones, and specify tasks as being urgent. Once a task assignment is made, the item is automatically added to the group calendar and appropriate personal calendars. Avanced features such as GUI workflow editing are not in QuickPlace, however, the provided workflow seems to be efficient and user-friendly.Managers can use Placetypes to preserve best practices from one project for future reuse. These documents store important project content such as member info, task structure, folder set-up, and procedures followed in the project. QuickPlace provides most standard editing capabilities, such as document check-in/check-out, editing permissions, and revision histories. Lotus QuickPlace 3.0, expands on QuickPlace’s collaborative functionality where .users can quickly locate and enter all of the team workspaces to which they belong, as well as search across them. Using a Java/XML API developers can easily embed collaboration in any Web application. Seamless integration with the Lotus instant messaging product allows real-time collaboration within a team workspace.

SharePoint Team Services from Microsoft has strong integration with other Microsoft products and weak integration with non-Microsoft products. Microsoft SharePoint Team Services is a basic collaboration tool that features an intuitive interface. Many features require separate Microsoft products (such as MSN Messenger). Although Team Services does offer discussion forums and document organization capabilities, it noticeably lacks advanced communication features such as workflow tools and chat software. It also involves manual operation in many areas where automation would have helped.

The main method of communication provided by Team Services is an asynchronous discussion forum. SharePoint maintains and organizes all threads of discussion for fast searching. SharePoint also features an integrated online polling system, in which users can quickly gauge their teams members’ opinions and view the results either graphically or as a Microsoft Excel spreadsheet.Team Services offers a scheduling tool that allows users to view all team events, personal tasks or appointments, as well as upcoming events. Users can view these appointments on Team Services’ Calendar or sort and filter events based on a number of metadata characteristics. They can also import


appointments from Microsoft Outlook 2002 for immediate inclusion in their list of private events.

Users can set up a document library to hold all content related to a specific issue. They can import any type of file that they can locate on their desktop, network drives, or on the Web. Administrators can also specify metadata that must be supplied when submitting a document so content can be automatically organized. Users can choose to receive automatic notification if a designated document or library of content is modified. SharePoint lacks many features found in other products on the market. SharePoint does not provide integrated chat or instant messaging software for when urgent communication is needed. Furthermore, there are no workflow features to guide shared documents through the review process. Although SharePoint features Microsoft Outlook integration, it does not integrate with users’ mail clients.

Open Text Livelink www.opentext.com Open Text’s Livelink is a comprehensive collaboration solution. The product’s basic functionality addresses many of the key issues in document organization and team collaboration. It can be integrated with Lotus Notes, Microsoft Outlook, Palm OS. Livelink’s Virtual Teams combines technology and methodology to create online workspaces for high performance virtual teams and inter-company networks. During the team creation process, team roles can also be meted out, simplifying the review process. Employees can coordinate appointments and meetings using the built-in calendar. Livelink’s MeetingZone add-on provides further meeting functionality, such as virtual Web-based meeting sessions and instant messaging capabilities during the live session. However it has no video real-time collaboration software.

Users can also customize every aspect of the software’s operation or augment using one of the many available add-ons. Through Livelink’s Workflow Designer, workflows can be managed by defining and modifying user and group participation in workflows, as well as define steps, task profiles and specific instructions for the process.

The product provides eight levels of user permissions, and the versioning system keeps track of previous versions of documents and also records when documents were changed, who implemented the modification, and details on how the document was altered. Users can also choose to be notified of modifications to any content item. Livelink’s Channel, a part of the core Livelink functionality lets users broadcast any information or documents to relevant parties within the organizations.

Users can also create detailed workflows using the Designer, specifying review cycles, project goals and the parties involved in the review process. Corporate executives can designate groups of employees for work on certain tasks, creating an accompanying workflow using the Designer.

Open Text has provided many avenues for integrating with legacy systems and databases. It is XML compliant, to integrate disparate applications and data sources. Using one of its many add-ons, Livelink can interoperate with SAP systems. CORBA is also supported for further ease of integration. Livelink eSign provides digital signatures. Livelink’s OnTime, a module of Livelink, is a scheduling and calendaring application which combines full, controlled access to calendar information with good scheduling functionality.

Although chat and instant messaging features are available in MeetingZone, Livelink does not provide any bundled presence or chat package. Virtual whiteboards and presence software are certainly important during group meetings, but real-time conversations and real-time video play an important role in the everyday workings of a team, so the lack of such modes of communication is a considerable shortcoming. Livelink presents a versatile system.


http://www.opentext.com/

ConferenceXP, is a research and development initiative of Microsoft Research Learning Sciences and Technology group.

ConferenceXP audio and video streams are transported over an RTP network stack. RTP is a peer to peer network transport that handles stream and message data. Designed for scenarios where latency is important. RTP is the standard for streaming media in a multicast environment. The ConferenceXP network transport is expected to dynamically adjusts to handle poor network conditions and low bandwidth situations. ConferenceXP clients and servers use standard Internet protocols and interfaces including SOAP, XML, UDDI, WSDL and RTP.

ConferenceXP claims that participants can schedule, join and participate in on-line conferences, presentations and meetings via a simple point-and-click user interface displayed on their desktop. A published ConferenceXP API should enable the development of custom user interfaces, and the integration and use of ConferenceXP with existing conferencing and classroom systems.

The “high speed” of the Internet2 Abilene network, enabled for multicast, is the network being used for ConferenceXP for high-end collaboration solutions that provide both high quality and low latency delivery of audio and video.

ConferenceXP is designed to handle full screen video, 30 fps, 250 ms latency. It is designed for FireWire cameras to enable high quality, efficient video capture, video rate of 256 kb/s 320x240 or 1024 kb/s 640x480 will result in very high quality video resulting in five way conferencing using 2 Mb/s per user. The viewer is designed to have a synchronized display of slides and scribble, comments and annotations. It is also designed for Integration of slides and whiteboard and enabling annotations.

SECTION II - Results on Telework Experience:

We found market research from Cahners In-Stat/MDR that stated the steady growth of the remote and mobile (RAM) workforce is continuing and the biggest hurdles to hosted applications for RAM workers are security and bandwidth constraints. However, the best study I have seen so far is from AT&T that quantified the improvement due to Telework not only in productivity gained but also in improving the bottom line from a financial point of view. When real estate and job retention savings are included, AT&T quotes a savings of more than $100 million every year due to telework and higher bandwidth is a key factor affecting Telework. The detailed summary below we provide additional details.

In search of demonstrated improvements due to visual collaborations, we found one examples that, although from a different setting, it relates to the collaboration environment that Telework Consortium is advocating. At the University of Michigan, Professor Elliot Soloway’s team http://www.hi-ce.org/ has been studying the application of various tools in K-12 education. They have found that using palm computing devices and teaching students to beam information to each other fostered a better collaborative environment then just using PCs asynchronously. Beaming PDA info forces participants, in real-time to react and work together. A visual collaboration environment has similar characteristics – team members collaborate better through interactions, review and creation of new ideas. Dr. Solloway is documenting these results. A description of some of the tools they have used on PDA’s is in “Palm Computing Devices are Ready-at-Hand”, Communications of the ACM 2001.

SECTION III - Summary of Technical and Business Status of High speed Access in the US:


http://www.hi-ce.org/

We found that there has been much activity in the form of trials and new initiatives on part of the incumbents and new services by startups that one can learn from. A key consideration in planning the evolution of a network is the starting point: is there an infrastructure already in-place that can be leveraged or is one designing a brand new network. If it’s a greenfield scenario, then one would choose the most economical approach that would scale with the growth of the demand. Next generation technology for building new networks is heading toward Optical solutions using Ethernet. In contrast, much of the RBOC embedded base is based on ATM and Broadband PON based on ATM seems to be a key path the RBOCs have chosen. BPON can offer Ethernet services as well as legacy services.

A key influencing factor in evaluating a migration path to optical Ethernet is the installed base of broadband capabilities within the metro area(s). Most sites with multiple T1s, T3s and higher speed interfaces into private line and switched networks are carried over fiber. If fiber is available it can be extended to the users premises using Passive Optical Networks (PON) technology. If a SONET ring infrastructure is in place, a packet ring based solution can also improve the economics of access.

If the infrastructure is not in place, then certainly the approaches used are headed toward a combination of PON and Packet ring technology. A key issue is the financing of the investment in high-speed access and traditional service provider approaches or newer approaches like UTOPIA is using or even more innovative ideas mentioned by Telework Consortium senior management, needs to be considered and studied.

SECTION IV - AT&T’s Results on Telework In detail:The Business Value for Teleworking and the need for High Bandwidth Access

Results from AT&T's Dec 2001 annual employee telework research suggest that telework is being utilized less as an employee perk and more as a mechanism for increasing business efficiency and continuity. Telework productivity at AT&T has increased roughly 10 percent in the past year, with employees typically gaining a full hour a day, according to AT&T's eighth annual telework survey of 1,500 employees. However, the top barrier to telework continues to be a lack of high-speed data access to the home. Over the last four years, about half of AT&T managers have worked from home at least once a month, about one-quarter at least once a week, and about 10 percent in a full-time "virtual office."

AT&T data indicates that teleworking enhances productivity, because teleworkers report being more productive per unit time and because the teleworker has available the previously non-productive commute time. When asked about perceived productive work hours (when tasks are accomplished), office workers reported 6.2 productive hours in an 8 hour day, compared to the teleworker-reported 7.5 hours in an 8 hour day. Over three-quarters (77%) of all teleworkers reported higher productivity at home while only 6% reported higher productivity in the office. Seven-in-ten managers (72%) report being more productive when working from home. Only 5% of managers report higher productivity when working from the office. This increased productivity was valued by AT&T at $65 million annually. AT&T estimated that they saved about $25 million per year in real estate through virtual office programs. When real estate and job retention savings are included, AT&T saves more than $100 million every year due to telework.

AT&T has several large units within the company that are moving to a full-time virtual office structure. In 2001, AT&T teleworkers avoided driving 100 million miles, saving 5 million gallons of gasoline and preventing many thousands of tons of air pollutants. Five of the top six reasons cited by Telework and Collaboration with Broadband Access Page 8 of 36

office employees for not working from home relate to the need for speed. Typically, a teleworker who has a company-paid data line works twice as many days at home per month as one who doesn't. And those who have high-speed reported gaining about one additional productive work hour each day spent working from home. As a result, hundreds of AT&T

employees moved out of traditional offices and are now working primarily or exclusively from their home offices. AT&T found that 82 percent of teleworkers said that balancing work and family responsibilities was a significant advantage of telework;

About 70 percent of teleworkers are more satisfied with their current job and their personal and family lives; and

56 percent of teleworkers who received competing job offers said that they factored telework into their decision to accept or reject the offer.

Benefits of the Decentralized Organization AT&T’s experience and data suggests that a decentralized organization - one that is not tied to a single location, local employees, line-of-sight management cultures, non-networked intellectual capital, or site-based technology - may be a more efficient, effective, flexible and resilient organization. The trend toward home-based decentralization is evident when AT&T examined the total population of those employees who now work from home at least occasionally (see figures below). The total population of employees who work from home (everyday or 5-19 days per month) increased by roughly 7%, while the percentage of occasional work-from-homers fell a similar amount. (2000 figures have been adjusted to compensate for the spin-off of AT&T Wireless.)

In this latest research, AT&T teleworkers again reported that they gain about an extra hour of productive time each day at home, adding up to at least an estimated $65M in business benefit each year. Separate employee research has shown that full-time virtual office managers receive higher managerial appraisals than their office-bound peers. Teleworkers get more accomplished not only because of time saved by not commuting - that is, increased productivity on a per teleworker or per workday basis - but also because of increased productivity per unit hour. Thirty six percent of those Telework and Collaboration with Broadband Access Page 9 of 36

who stopped teleworking said they were less productive at home because of a lack of technology and 27% said they needed face to face communications (which we assume can be addressed by a high performance video collaboration environment.

Note that almost one out of five teleworkers returned to the office because they were promoted, which is another indicator of excellent productivity.

Digging deeper into the data, we see that five out of the top six reasons cited by non-teleworkers for lack of participation involve access speed (i.e. broadband). Work is important to teleworkers; improving productivity is the second highest reported benefit. Making employees feel trusted is an under-appreciated advantage; one side effect of telework is the management by results and not appearance. Teleworkers feel that both they and the company save money by the arrangement, even though many employees use their personal voice lines and other personal equipment to work from home. The environmental benefits of not commuting are well known - six out of ten workers say helping the environment is a major advantage of this new work arrangement.

These advantages make teleworkers more loyal to the organization. In AT&T’s study, more than half (56%) of teleworkers who had received competing job offers factored the ability to work at home into the decision to stay with the company. If teleworkers were told they could no longer work from home, one out of three (33%) said they would look for another job within the company - or quit.

There are significant differences between work structures that support frequent telework - even as often as one or two days a week - and those that support a Virtual Office environment (VO). Almost anyone can work at home part of the time and the structural elements of the traditional workplace mostly remain in place (face-to-face meetings, voice and data access, and fixed office space are good examples, along with other, less visible structures such as security and political systems).

In a virtual office environment, however, the boundaries of location and appearance disappear. It is a fundamentally different view of an organization and how it works. Meetings and information exchange can occur anywhere at any time. In a virtual structure, managers must actually understand the value of each knowledge worker's contribution to the enterprise. The level of trust in a virtual organization must be much higher than in a frequent telework environment; managers must be comfortable knowing that the employees they support are working away despite being out of sight, and employees must feel comfortable that their manager is looking out for them, even when they're not immediately outside her or his office. Additionally, information technology in the virtual work environment must evolve so that all required data and functions are available through intranets. Management and communication channels currently used in the office must have technical equivalents (video, collaboration systems with shared folders, etc.)


Reasons for AT&T employees stopping telework: Less productive at home due to lack of technology 36% Changed job / managers 33% Lack of face to face communication 27% Received promotion 19% Less chance of promotion 15% Too many distractions at home 2% Loneliness 1%

Major Reasons More Employees Don't Telework: Non-Teleworkers Teleworkers Difficult to download large files 46% 38% Need to interact with others 48 32 Slower access to corporate systems 49 33 Computer apps don't work well 46 32 Slow access to internet 40 32 Lack of access to broadband 35 33

AT&T’s view coincides with the Telework Consortium’s view that developing this virtual infrastructure is a competitive imperative for our society. The economic implications of increasing productivity by reducing "migration time" are significant, as are the security and business continuity improvements associated with a decentralized knowledge structure. And these advantages can be realized in a manner that enhances the quality of life for individual employees, and allows those who are unable to fully participate in our economy (such as the physically challenged, or those who reside long distances from economic centers of employment) the ability to contribute based upon knowledge, not on fate or chance. In addition, clearly the impact on the environment will be very significant.

Lessons from AT&T’s experience Two different VO (virtual office) initiatives currently being deployed inside AT&T. In these two organizations alone, more than 500 employees have been moved from dedicated AT&T office space into virtual offices this year as part of a strategic drive to create a more efficient and effective business structure. Real estate costs have been reduced by several million dollars, while productivity and job satisfaction have increased.

Several lessons that illustrate the differences between tactical and strategic telework have emerged during these initiatives. Three of these lessons are covered below. More will follow in future articles.

Lessons:

1. A critical mass of remote workers in an organization is necessary for management and communication channels to shift to the network-based equivalents. The first teleworker in an organization has a very lonely and difficult existence. If a good part of the organization is working from home, then the cultural barriers drop. Both VO projects took advantage of this principle by making pilot programs as large as possible. Making the pilot program as large as possible - up to and including 100% of the proposed work-at-home pool of employees - will uncover technological and cultural barriers much more quickly because of the diversity of employees, managers and technologies involved. A large pilot also makes it much easier for teleworkers to feel at ease with the arrangement, since their peers are also working at home.

2. Need solid technology and policy platforms. It takes a different caliber of infrastructure to support a 200 person virtual office project than to support two dozen people teleworking occasionally as an alternative work arrangement. Besides the obvious need for seamless and speedy technology, remote work must be reflected in the policies and administrative procedures of the company.

3. Recruitment and retention are other important benefits. Because of the enhanced quality of life and personal freedom which teleworking fosters, firms are better able to retain valued employees, even when flattening hierarchies so that promotion opportunities are more rare. Among the AT&T teleworkers who have been offered other jobs, about two-thirds (67%) reported that giving up an "AT&T telework environment" was a factor in their decision to remain with the company. When competing for high tech employees, firms are finding that it is the companies with more non-traditional work environments that are the most successful in recruiting the knowledge worker.

OTHER REPORTS: GSA Reports to Congress on IT Barriers to Telework Congress asked GSA to "identify and develop a plan to resolve technology barrier issues that impede the creation of home workstations for Federal employees." In response, GSA contracted with the independent research and consulting firm of Booz Allen and Hamilton to conduct a study of technological barriers to teleworking and to report on it. The final report on this study was sent to Congress on May 9, 2002. One result of this study is the following.

The influence of working at home on productivity is important to organizations considering the move Telework and Collaboration with Broadband Access Page 11 of 36

http://www.telework.gov/IT_Report/index.htm

to telework. Many managers fear that performance will decline when one is away from the workplace. Over seventy percent (72.4%) reported that working at home slightly or greatly increased productivity; 19.5% reported that it remained the same; and 6.5% reported that their productivity slightly decreased since working at home.

Remarks from "The Sky’s The Limit and It’s Not Falling (Yet)" Opening Remarks by Bruce P. Mehlman Assistant Secretary for Technology Policy, United States Department of Commerce Delivered January 31, 2002 at the Electronics Industries Alliance Winter Meeting Phoenix, Arizona

ECONOMIC GROWTH: We believe broadband - high-speed, high capacity Internet access and usage - can further improve U.S. productivity and competitiveness, helping to restore robust growth to our economy and increasing Americans’ standard of living in the 21st century.

HOMELAND DEFENSE: Broadband can help promote homeland defense. Broadband-enabled video conferencing will provide important productivity enhancements, allowing the same economic output despite reduced travel or more distributed organizational structures.

Section V: Details - Status of High Bandwidth Access – the business scenarioFiber-optic technology, offering virtually unlimited bandwidth potential, is widely considered to be the ultimate solution to deliver broadband access to the last mile. Today's narrowband telecommunications networks are characterized by low-speed, service-provisioning delays, and unreliable quality of service. This limits the ability of workers to be efficient in their jobs. The last mile is the network space between the carrier's central office (CO) and the subscriber location. This is where bottlenecks occur to slow the delivery of services.

Incumbent telephone companies responded to Internet access demand by deploying DSL tech-nology. DSL uses the same twisted pair as telephony lines and requires a DSL modem at the customer premises and a digital subscriber line access multiplexor (DSLAM) in the central office. The data rate provided by DSL is typically offered in a range of 128 kb/s–1.5 Mb/s. While this is significantly faster than an analog modem, it is well shy of being considered broadband, in that it cannot support full-service voice, data, and video. In addition, the distance for DSL coverage is limited to distances less than 18,000ft. Network operators are now deploying remote DSLAMS closer to subscribers to aggregate DSL traffic and improve its economics. If the DSLAM is placed within 1000 feet, a flavor of DSL called VDSL (Very-High-Data-Rate DSL) can be used to provide up to 52 Mbps one-way and 26 Mbps Symmetrical. At 3000 feet, both of the foregoing rates drop in half.Cable television companies responded to Internet service demand by integrating data services over their coaxial cable networks, which were originally designed for analog video broadcast.


Typically, these hybrid fiber coax (HFC) networks have fiber running between a video head-end to one or more hubs and then to multiple fiber nodes. The fiber nodes connect coaxial cable to multiple distribution amplifiers which feed multiple taps to provide the final drop to the subscribers The drawback of this architecture is that each shared optical node has less than 36 Mb/s effective data throughput within a 6 Mhz slot in place of a TV channel using 64 QAM. The data rate at each node is typically shared by a large number of homes. If the cable provider over- sells the bandwidth on a node, low data rates will occur from time to time. Typical downstream rates range from 500 Kbps to 2500 Kbps. Upstream rates however are about 100 to 200 Kbps. The upstream data uses frequencies below the TV band which are susceptible to noise and other services using some of the spectrum. Cable Labs, which is supported by all of the cable companies, sets the standards which is currently DOCSIS 1.1 (Data Over Cable Service Interface Specification).The industry, along with Cable Labs, is working on DOCSIS 2.0 with the objective of achieving symmetrical bandwidth by solving the upstream problem. A likely candidate is to use Synchronous CDMA. A significant draw back of the DOCSIS standards is the there is no provision for QoS and SLAs. There is no management of bandwidth allocation. Everyone gets to take part in the free-for-all except that the provider is able to limit the top rate (around 2500 Kbps) so that no one user can hog the network.

A new broadband-over-cable technology has been developed by NARAD Networks. It has been in trial by at least all of the largest cable companies and is starting to be implemented by several of them. There are also implementations in place in Asia and Europe. A paper giving full details has been published in the IEEE Communications magazine of August 2002. We have been following this development for some time and have been in communications with the company by telephone and a visit to their office in Massachusetts. It is based on Hybrid Fiber Coax (HFC) technology. DOCSIS uses HFC also but it can be used in a pure coax plant as well. NARAD makes use of the existing HFC plant that a cable provider has. Since the fiber plant is already in place and well away from the head end, the coaxial lengths are such that there is much useable coax bandwidth above the TV frequencies which top out at 865 Mhz. Above that frequency, there is at least 1Ghz and up to possibly 2Ghz of bandwidth available. The implementation can be done from any node by replacing the distribution amplifier by a NARAD Network Data Switch (NDS) and replacing the taps with Subscriber Access Switches (SAS). These devices also provide for passing the legacy TV services to the subscribers location. The implementation can be done on a market by market basis. The legacy (TV) service from its headend and Gigabit Ethernet link from a front end router are merged so as to provide both services. The system utilizes 1 Gbps trunks via the coaxial cable and 100 Mbps symmetrical subscriber coax drops. It is based on switched EthernetAs opposed to DOCSIS services, the NARAD system provides for symmetrical bandwidth at rates up to 100 Mbps. It also has full QoS and SLA capabilities and software for provisioning and network management. Each user is guaranteed the bandwidth subscribed. The Cable companies may be slow to pick up this technology even though the system gives them a leg up compared to Telcos (CLECs and ILECs). We can only speculate since each cable company may have different objectives and means. At the present time, even the DOCSIS cable modem services have the lead over DSL customers by a factor of 2/3 of the “broadband” market vs 1/3 for DSL The total market currently is about 15.6 million users. (Source: The Companies and Leichtman Group, Inc.). The market take could be much larger with the NARAD approach To alleviate bandwidth bottlenecks, optical fibers, and thus optical nodes, are penetrating deeper into the first mile. The next wave of local access deployment promises to bring fiber to the building (FTTB) and fiber to the home (FTTH). Unlike previous architectures, where fiber is used as a feeder to shorten the lengths of copper and coaxial networks, these new deployments use optical fiber throughout the access network. New optical fiber network architectures are emerging that are capable of supporting gigabit per second speeds, at costs comparable to DSL and HFC networks. A Telework and Collaboration with Broadband Access Page 13 of 36

network infrastructure that allows more bandwidth, quick provisioning of services, and guaranteed quality of service (QoS) in a cost-effective and efficient manner is now required. Today's access network, the portion of a public switched network that connects CO equipment to individual subscribers, is characterized by predominantly twisted-pair copper wiring.

Fiber-optic technology, through local access network architectures such as fiber-to-the-home/building (FTTH/B), fiber-to-the-cabinet (FTTCab), and fiber-to-the-curb (FTTC) offers a mechanism to enable sufficient network bandwidth for the delivery of new services and applications. In general, the optical section of a local access network can either be a point-to-point, ring, or passive point-to-multipoint architecture.Fiber-based services such as metro Ethernet are a hot idea, but getting the fiber to the customer isn't getting much easier. The "fiber glut" in the public network backbone does not extend to the end user. However, the architecture of metropolitan networks is undergoing a significant shift. With the rise of carrier hotels and Internet data centers, traffic is being concentrated in new bandwidth "hot spots" within the metro, these concentration points have become natural targets for large fiber deployments. Very few office buildings are served by fiber. This is a major missed opportunity for the RBOCs in meeting customer need and potentially getting ahead of competitors. Carriers have begun collocating equipment in "carrier hotels" to facilitate their need for many-to-many interconnection. FiberNet www.fiber.net is an example of the business opportunity that fiber connectivity by itself creates. (Utopia is another potential example, however it is in the feasibility study stage, prior to floating bonds).

FiberNet's approach is a focused build out in high density areas. FiberNet Telecom builds fiber connections among long distance points of presence (POPS), carrier hotels and large office buildings in New York, Chicago and Los Angeles. FiberNet wholesales to carriers including Broadwing, Qwest and, most recently, Verizon, as well as to foreign carriers such as Singapore Telecom and Deutsche Telekom. FiberNet is committed to providing only the fiber infrastructure from the buildings. FiberNet has access into more than 20 Class A office buildings, including the Chrysler and Seagram buildings in New York. The company also serves 10 carrier hotels in its three cities, including New York's 60 Hudson Street, the world's largest such facility.

The incumbent carriers are investing in fiber networks, but with an eye on cost containment as much as on upgrading customer access. For example, Sprint has focused its metro fiber strategy on securing dark fiber connections between the IXC's POPS and incumbent local exchange carrier (ILEC) central offices (COs), Sprint is looking to cut its costs by leasing dark fiber and lighting it up themselves, rather than leasing lit ILEC facilities. AT&T is looking to technologies such as 38-GHz wireless as a way of avoiding the cost of running fiber. WorldCom has previously been committed to running fiber direct to end customers - where it makes sense. That may have been easier for WorldCom, thanks to acquisitions it made in the late 1990s MFS, Brooks Fiber and MCI all had major metro fiber deploy-ments going back 10 years. WorldCom currently has 50,000 U.S. office buildings and campuses on fiber in 100+ markets.

Fiber DeploymentThe ultimate constraint on the rollout of metro Ethernet service is fiber deployment. The Yankee group estimated in 2001 that Metro Ethernet providers Market share is 79%, RBOC 19%, IXC 2%. Connecting a building to a fiber ring is not as expensive as some have estimated ($150,000-$400,000). Cogent quotes an average lateral to be "relatively short," about 715 feet. At an average construction cost of $80 a foot, that would be about $57,000. Cogent’ criteria is that a buildings must be 100,000 square feet or greater, have 20 or more tenants and be within 1,250 feet of fiber that Cogent has already secured.


http://www.fiber.net/

The experience with IP public networking over the past couple of years has clearly demonstrated that, when new technology collides with entrenched carrier business models and infrastructures, the new technology gets absorbed into the big carriers' networks and business plans in a way that makes sense for the big carriers. At the end of 2001, the metro Ethernet providers dominated the market that they had invented (79%). But the RBOCs, without really trying, already own 19 percent of the market, although for three quarters of 2001, there was only one RBOC with a Gigabit Ethernet offering - most of their market share came from their transparent LAN services.

The PON ScenarioEven though PON technology has been available for several years, few carriers have rolled out services over PONs beyond the trial stage. Many of the carriers are planning to use the technology in the enterprise market, hoping to drive monthly revenues higher with bundled services, but we are not aware of solid plans for implementation. Several issues have arisen since the standard was set, including issues around integrating the technology into the carrier operating system, concerns about fiber costs, and capacity for BPON. Key BPON shortcoming is available Bandwidth. For video collaboration, we expect symmetrical service will be needed. For symmetrical service, since the total capacity for BPON to 32 enterprises is limited to 155 Mbps symmetrical (BPON has 622Mbs in downstream direction and 155Mbs in upstream direction), most of the connections will operate between a T1 and 4.5 Mbps (equivalent to three T1s). It is only recently that ITU has considered the recommendation for higher speeds (622Mbs, 1244Mbs, 2488Mbs symmetrical). The original G.983.1 spec has been complemented with G.983.2 and G.983.3, however in general, vendors have yet to commit to these new BPON (=APON) standards. However, Salira, a start-up from San Jose, Calif., has been designing products that go beyond 622 Mbps by leveraging burst-mode optical technology to deliver Gigabit Ethernet bandwidth and services over PON transport. Salira's solution adds intelligence at the customer and the service provider end allowing providers flexibility and improved service-level agreement (SLA) reporting by individual customer port at each node. EPON will offer a much larger connection to the end user, however, EPON standards are not finalized yet. EPON systems will have xGbps Capacity. Baseline proposals have been negotiated and agreed to for short distances and longer distances (12000ft.) standards for Ethernet access. The standards for EPON as part of IEEE 802.3ah are anticipated by September 2003.

The IncumbentsThe established local and long-distance players especially some RBOCs were surprisingly quick to jump on the Ethernet services bandwagon.

BellSouth announced a Gigabit Ethernet service October 2001, while SBC, which had a point-to-point GigE-over-fiber offering already in place, said it plans new offerings for 2002. AT&T and Qwest's IXC division were also planning rollouts of Ethernet service offerings in Tier 1 cities. Qwest is testing BPON and evaluating EPON. Qwest was planning to build out fiber facilities in 2001 in 25 area metros. SBC began offering a native Ethernet service (i.e., not run over SONET) called GigaMAN as early as 1999 in the Ameritech region. The RBOC planned to extend the offering to the rest of SBC's territory. GigaMAN offers little flexibility on configuration; the only option is 1 Gbps for connecting two points across a metropolitan area. There's a local-loop charge on either end and mileage charge in between, with a typical bottom line price of $5,000-$7,000 per month on a 60month contract. SBC is planning to introduce a multipoint service at 10- and 100 Mbps. Ethernet service is not designed to have the level of redundancy or reliability that a SONET network has. With GigaMAN, SBC is clearly out in front of the incumbent pack. Other RBOCs and IXCs are generally building Ethernet services on top of their existing SONET infrastructure, for added reliability. BellSouth, in 2001 added a Gigabit Ethernet component to its Native Mode LAN Interconnection (NMLI) offering, its existing transparent LAN service. The Gigabit service debuted in Atlanta and south Florida, and subsequently expanded into North Carolina. While SONET is a more expensive infrastructure than native Ethernet, if the


investment is already in place then the carrier can leverage it. BellSouth already has the investment in place, and is planning to start adding next-generation SONET multiservice provisioning platforms (MSPPs) to its network. Time Warner Telecom has BPON trials targeting small and medium size enterprises. WorldCom also has planned offering an Ethernet access service (up to 600 Mbps) over its SONET infrastructure in five cities. Verizon has been evaluating PONs as part of last-mile network deployment.

On the average, the pricing for optical Ethernet services varies, ranging from $1,570 to $4,040 per month for 100-Mbps services from Bell South and Telseon respectively. At GigE rates, SBC's tariff is $8,475 while XO's is $14,000. In 2001, a number of service providers who offered or planned to offer optical Ethernet services used the following planning numbers (list price) for customer business eases: $1100/month for 10 Mbps, $2,300/month for 100 Mbps and $11,000/month for 1Gbps, with a Committed Access Rate (CAR) of $20-$40Mbps. Note that on a $/bit basis, these prices are 30 percent of the price for 'I'1, 22 percent of a T3 and 20 percent of an OC-3 for nax speeds of 10Mbs, 100Mbs and 1Gbs respectively..

Case Study: SBCMost noteworthy development has been SBC's announcement that it would use passive optical networks (PONS) in the next stage of its Project Pronto initiative to bring broadband to the wider market. SBC announced it would use a BPON architecture to deliver fiber access to end customers. SBC’s target market for BPON enabled services is businesses that currently have multiple T1 lines that are deployed using repeaters. Thus, the carrier's focus is on saving money within its infrastructure (however, they are also looking at Ethernet services). Shifting repeatered-T1 customers over to BPON also would improve the range and service quality of SBC's DSL offerings, since T1 signals can inter-fere with DSL. With Capital Expenditures Capped, the rate of deployment is not expected to be of a very large scale.

SBC Broadband PON (BPON) ArchitectureOne fiber connection serves many homes or businesses and cascaded couplers lower cost


Companies such as BellSouth have deployed PONs in their fiber-to-the-home (FTTH) trials. While PONs brought down the price of fiber access to homes, the capital expense is still $350–$450 per home plus the cost of the fiber that can range in cost from $40–$100 per foot depending on location. This is significantly more than the upgrade costs for DSL installation, causing many carriers to take a wait-and-see attitude toward widespread FTTH deployments. To improve the return on investment for their fiber rollout, some carriers and service providers are testing their PON technology within the enterprise market.

The Startups. Leaders: Cogent, Yipes, OnFiber. Challengers: IntelliSpace, Looking Glass.Yipes is a national provider of Ethernet-based IP services to enterprise customers. Yipes' architecture uses Ethernet to carry IP packets over optical fiber. Yipes Communications filed a voluntary petition for relief under Chapter 11 in late March of 2002. In just over three months, Yipes Enterprise Services was formed, formulated a revised business plan for the Yipes services, raised equity financing and consummated the acquisition of Yipes Communications assets. Under the new business


plan, Yipes Enterprise Services will continue to serve customers and expand services in 10 markets including San Francisco, San Diego, Seattle, Chicago, New York, Philadelphia, Denver, Dallas, Houston and Washington D.C. Customers in remaining markets are planned to transition to E-xpedient Holdings, Inc., a national service provider. Yipes is currently operating in 20 Tier 1 MSAs. has targeted large enterprises with LAN interconnection and Internet access services, and stressed its ability to offer services up to 1 Gbps in increments as granular as 1 Mbps. Yipes pricing was 40-60 percent less than the incumbents' rates for the same bandwidth level. Yipes had 700 customers as of the Chapter 11 filing: One of Yipes differentiators was the ability to provide bandwidth on demand, in very fine (1M) increments. However, a key issue is the coverage area. Yipes has a head start on similar EtherLECs in developing its suite of IP services that will be bundled for clients. Services include:

Yipes MAN. Connects multiple client locations using native LAN speeds of 1 Mbps to 1 Gbps.Yipes WAN. Allows locations in different cities to connect with an IPVPN using IPSec protection at speeds of 1 Mbps to 100 Mbps.Yipes Net. Gives customers Internet access at speeds of 1 Mbps to 1 Gbps through a Yipes peering partner. Multiple partnering agreements with Tier 1 ISPs. Access services monitored by Yipes-maintained NOC.Yipes Wall. A security firewall solution.Yipes Web. Collocation, managed hosting services, managed servers, and professional services.

Cogent provides Metro Ethernet service with revolutionary pricing levels: A full 100 Mbps for a flat $1,000 a month. But Cogent only offers Internet access, it does not sell increments of bandwidth. Cogent has a nationwide fiber backbone, so a customer could run its own VPN over a Cogent Internet access service, but typical service is to a single location.

Other significant retail Ethernet providers have included FiberCity, GiantLoop, Intellispace and XO Communications. Time Warner Telecom, a business-oriented CLEC, is offering Ethernet services in all 44 of its markets as well.

Ethernet startups have gone to great lengths to provide redundancy, alternate routing and other means of providing greater reliability in their native-Ethernet networks. The metro Ethernet providers have always maintained that their recovery metrics were adequate, if not top-of-the-line SONET level. Yipes, for example, uses redundant switch/routers on a fiber ring, and can switch over in a matter of seconds vs. SONET's 50millisecond guarantee. Thus, SONET is designed to replace private lines, whereas Ethernet on Fiber addresses IP Service (where applications can handle outage of a few seconds. SBC’s GigaMAN is a dedicated, point-to-point connection, and SBC offers service level agreements (SLAs).

OnFiber Communications: Offers DWDM, Ethernet, and SONET-based services to carriers, service providers, and enterprises. Acquired two competitors, Sphera Communications and Telseon Communications, to expand its network reach and customer base. Telseon has taken a different track than the other providers and was looking to be the backbone of the ISPs, ASPs, CDSPs, and SANs that need to move large amounts of data around the metro area. The company is also serving Web enterprises that need to connect to the facilities of their service providers. Telseon is servicing 20 Tier 1 MSAs in the United States. The company competes with the RBOCs while complementing the metro extensions of the greenfield IXCs. Telseon has agreements with 360networks (bankrupt) and Level 3 to provide their customers with connections to metro facilities that are outside the current reach of the IXC’s networks. This will drive traffic on Telseon’s network as well as provide an end-to-end IP solution for a service provider customer needing transport in multiple metros. In addition, Telseon announced that it had inked a partnership agreement with Williams Communications to share


access to network points of presence (POP). Under the agreement, Telseon will have access to Williams' POPs and long-haul backbone for its new managed wavelength service, adding 100 POPs to Telseon's network reach. In exchange, Williams will have access to Telseon's current 125 connected POPs to deliver its data services. Telseon has also signed multiple agreements with established players to extend its reach into hundreds of end-user buildings.

Giant Loop offers a suite of managed services to Global 2000 companies within Tier 1 MSAs to address both storage and data networking. Giant Loop has a presence in five cities and planned to expand into international financial capitals. Called Enterprise Optical Networking (EON), Giant Loop's offering provides point-to-point, point-to-multipoint, and multipoint-to-multipoint multi-gigabit connections. EON will support IP, Gigabit Ethernet, ATM, Fiber Connection (FICON), Enterprise Systems Connectivition (ESCON), and Fibre Channel. Giant Loop will also offer a range of professional services to provide a complete data and storage protocol service.

Intellispace has been serving small and medium businesses with Ethernet services for more than six years. It has maintained a steady growth in customer numbers with Internet access, security, storage and hosting services. Targeting the Tier 1 MTU market for its rollout of Ethernet-based services, has wired over 100 million square feet of office space. Enterprises face an array of decisions as they plan their migration to fiber-based Ethernet in the campus, MAN and WAN. CIBC, a leading financial institution, is rolling out a managed optical Ethernet network from Bell Nexxia, starting with major sites around Toronto. Kaiser Permanente, has issued an RFI for a nationwide optical Ethernet-based solution spanning almost 500 sites. Nortel Networks has had a project converting its network architecture from ATM to native Ethernet among its major sites across North The rationale for these activities is straightforward: simpler, faster and more reliable networking, opportunities for rethinking server and storage distribution, and increased knowledge-worker productivity.

Metromedia Fiber Network (MFN): Founded in 1993, MFN was one of the first to competitively deploy fiber networks in the metro for carriers. A large debt load forced the provider into Chapter 11 protection in May 2002 and an SEC investigation was announced in June. MFN is currently working on a restructuring plan.

Summary of Metro Ethernet Case Study by METRO ETHERNET FORUM:Another study that provides insight was carried out by the Metro Ethernet Forum. The study analyzed the potential savings over a three-year period realized by metro Ethernet data services over today's traditional options. For the purposes of this case study, only savings resulting from lower monthly recurring charges (MRCs) were calculated. It should be noted that the study did not quantify the additional savings generated by engineering and operational support efficiencies and by reduced CPE interface and platform capital expenditures. Although not addressed, these can be substantial savings that can further add to those afforded by reduced MRCs.

To quantify MRC savings, the case study modeled a representative metro area profile for a large nationwide enterprise. The modeled metro area consisted of one large site with 500+ employees and four medium Sites with 100-499 employees. It was assumed that these sites require connectivity for two metro data applications 1) Dedicated Internet Access, 2) Private data networks. Bandwidth demands for each of these applications were assumed for the three year period and applied to three metro models.


Table 1: Assumptions for Three-Year Bandwidth Demand Per Application

Bandwidth Demand (Mbps) Year 1 Year 2 Year 3Dedicated Internet Access 3.5 4.6 5.9Private Data 3.0 3.6 4.3Dedicated Internet Access 10.0 13.0 17.0Private Data 25.0 30.0 36.0

Table 2: Assumption for Metro Data Service Models

Model 1 Model 2 Model 3Traditional MetroPrivate Line

Traditional MetroFrame Relay

Metro Ethernet

Dedicated Internet Access Dedicated Internet Access Ethernet Internet Access

Local Private Line Local Frame Relay Metro Ethernet Private Line

Traditional and metro Ethernet service pricing was then applied to calculate total annual costs for each of the three models. Traditional service pricing was derived from publicly available government tariffs and other published sources and is representative of the industry average for U.S. IXCs and ILECs. In the absence of widely published list pricing for metro Ethernet services, the case study leveraged pricing information gathered from interviews with the major U.S. IXCs, ILECs, and CLECs offering Metro Ethernet Private Line and Ethernet Internet Access services. The metro Ethernet service pricing used is a conservative representative of the middle tier between the lowest and highest priced players.


The following additional assumptions/qualifications were are also made to calculate recurring metro data service costs for all models:

Service Pricing Assumptions/Qualifications:Service pricing is based solely on monthly recurring charges (MRCs) and does not include Non-recurring charges (NRCs). All service pricing (traditional and Ethernet-based):

Decreases 10% annually Includes local access charges Is based on a minimum 2-year contract

Distance-sensitive local private line pricing is based on the following assumptions: 3 mile average local access distance 20 mile average interoffice distance

Bandwidth Growth Assumptions: Forecasted bandwidth is for data transport only Bandwidth demand for each application increases annually at the following rates: Internet Access: 30% Private Data: 20%

Free Space OpticsAnother technology developed for faster and cheaper deployment of optical access to enterprises is free space optics (FSO), an option that carriers will use along with PON as a low-cost alternative to point-to-point fiber deployment. With PONs and FSO, carriers will be able to reach a greater number of potential customers with optical access. This line-of-sight technology uses lasers to transmit data without fiber; instead, the data is transmitted through the air. The technology has been around for years in campus environments, connecting short distances between buildings. Recently, vendors have improved their systems to increase distance capabilities, reliability, and capacity of the systems, with ATM-based FSO operating up to 622-Mbps and 1-Gbps systems using Ethernet.

FSO has several advantages as well as disadvantages compared with fiber connections.

These advantages include lower deployment cost, Faster provisioning, Portability. One example of a temporary deployment occurred in New York City after September 11, when the technology was used to connect investment bankers with broadband access while they were relocated to temporary offices.


Disadvantages for FSO versus fiber include: Reliability. FSO systems are affected by weather, particularly fog and snow. Radio backup can help with reliability, since the radios can operate without a problem in the fog. Distance limitations. FSO deployments with carrier-class reliability are limited to less than a mile, depending on the climate within a given metro. Direct Line of Sight. This will limit carrier FSO deployment to locations in the central business districts of metro areas.


Section VI: Additional Technical discussion of Broadband AccessThis section focuses on providing more technical detail. To be self consistent, we provide some of the detail described in section II, the business focused section.

In metropolitan areas, where there is a high concentration of business customers, the access network often includes high-capacity synchronous optical network (SONET) rings, optical T3 lines, and copper-based T1s. Digital subscriber line technology (xDSL) and cable modems offer a more affordable solution for data, but they are not widely available and difficult and time-consuming to provision. In addition, bandwidth is limited by distance and by the quality of existing wiring and carriers are aggregating customer traffic via shared access (Cable) or stat muxing at DSLAMs (xDSL) .

SONET/SDH networks use complex ring topologies and are designed as contiguous and redundant point-to-point solutions with expensive interconnection nodes known as Add/Drop Multiplexers (ADMs). At an ADM, an optical-to-electrical-to-optical conversion is done and the overall network is optimized for either long-haul or metropolitan applications. To reduce costs and expand the market for fiber access, carriers and vendors have worked together to develop Passive Optical Networks (PONs) to address the last mile of the communications infrastructure between the service provider’s CO, head end, or point of presence (POP) and business or residential customer locations. PON architecture eliminates the active network components between the customer premises and the central office (CO), cable headend, or carrier point-of-presence (POP) required in a traditional fiber network, thereby reducing initial equipment costs and maintenance expenses. Active components between the CO and the premises require power and must be hardened against weather and temperature extremes. By replacing these components with a passive optical splitter, carriers can reduce the costs of deploying optical access while increasing available bandwidth and services to their customers.

The PON architecture was designed to bring fiber access to a larger share of the residential and enterprise markets. Brought together by BT under the Full-Service Access Network (FSAN) Coalition, NTT, BellSouth, and 17 other large carriers began developing PON standards in 1995 based on asynchronous transfer mode (ATM) standard to transport data, video, and Ethernet services. The International Telecommunication Union (ITU) has accepted this format for ATM-over-PON (APON), which has been deployed in limited fashion by BellSouth, SBC, and enterprise-focused units of cable operators. To avoid confusion and the impression that APON can only carry ATM traffic, the FSAN Coalition has changed the name of the APON standard to broadband-over-PON (BPON). Vendors are currently working on Ethernet-over-PON (EPON), and new services have been built on EPON as well. Vendors are lowering the costs of PON technology using EPON while increasing PON bandwidth capacities.

Even as the access network remains at a relative standstill, bandwidth has increased dramatically on longhaul networks through the use of wavelength division multiplexing (WDM) and other new technologies. WDM technology has begun to penetrate metropolitan-area networks (MAN), boosting their capacity dramatically. At the same time, enterprise local-area networks (LAN) have moved from 10 Mbps to 100 Mbps, and soon many LANs will be upgraded to gigabit Ethernet speeds. The result is a growing gulf between the capacity of metro networks on one side and end-user needs on the other, with the last-mile bottleneck in between. PONs aim to break the last-mile bandwidth


bottleneck by targeting the sweet spot between T1s and OC–3s that other access network technologies do not adequately address.

In our investigation, we will focus on the next generation, lower cost access technology. Our aim is to investigate the technology that can provide the bandwidth needs for true collaboration, investigate collaboration tools and demonstrate the use via laboratory, field trials and customer experience.

BANDWIDTH ESTIMATES FOR SERVICES

Service Required BandwidthCollaborative remote studio, video editing 6 - 45 MbpsFull-motion videoconferencing or streaming 3 - 6 Mbps (MPEG)Lower-quality videoconferencing 384Kbps – 1.5Mbs

What is PON?

Passive Optical Networks (PONs) are low cost optical Fiber-to-the Building/Curb/Home (FTTb, FTTc, FTTh or collectively referred to as FTTx) solutions. PON is a point-to-multipoint optical network that allows service providers to minimize the need for fiber in the outside portion of the network (e.g., outside plant-OSP) to interconnect buildings or homes. As a result, PONs cost a fraction of what it takes to deploy new point-to-point fiber or to rehabilitate existing SONET rings.


Encoding technique Bit rate Resolution Broadcast standardH.261 64 Kbps-2 Mbps 176x144

352x288 QCIF (conference) CIF (VHS quality)

M-JPEG 3-8 Mbps 15-25 Mbps 60-100 Mbps

352x288 720x486 1920x1080

CIF (VHS quality) CCIR601 (PAL) HDTV

MPEG-1 1.2-3 Mbps 5-10 Mbps 20-40 Mbps

352x288 720x486 1920x1080

CIF (VHS quality) CCIR601 (PAL) HDTV

MPEG-2 (H.262) 1-2 Mbps 4-5 Mbps 8-10 Mbps 20-30 Mbps

352x288 720x486 960x576 1920x1080

CIF(VHS quality) CCIR601 (Pal) EDT HDTV

In the Figure below a) shows a point-to-point (P2P) topology, with dedicated fiber runs from the local exchange to each end-user subscriber. While this is a simple architecture, it is cost prohibitive due to the fact that it requires significant outside plant fiber deployment as well as connector termination space in the local exchange. Considering N subscribers at an average distance L km from the central office, a P2P design requires 2N transceivers and N * L total fiber length (assuming single fiber is used for bidirectional transmission). In b) we show a remote concentrator close to the neighborhood. This reduces fiber consumption to only L km (assuming negligible distance between the switch and customers), but actually increases the number of transceivers to 2N + 2. Curb-switched architecture requires electrical power as well as backup power at the curb unit. Currently, one of the highest costs for local exchange carriers is providing and maintaining electrical power in the local loop. Therefore, it is logical to replace the hardened active curb-side switch with an inexpensive Passive Optical Solution as shown in c). PONs minimize the amount of optical transceivers, central office terminations, and fiber deployment. PON is a point-to-multipoint optical network with no active elements in the signals’ path from source to destination. The only interior elements used in a PON are passive optical components, such as optical fiber, splices, and splitters. Access networks based on single fiber PON only require N+1 transceivers and L km of fiber.

A typical PON solution requires two types of interconnected devices: equipment located in a service provider's local exchange (or headend) known as the Optical Line Terminal (OLT); and multiple Optical Network Units (ONUs) geographically distributed in buildings, on curbs, on utility poles or on the sides of homes. A high bandwidth optical signal is sent on a single optical fiber line, and then optically split to several ONUs. An ONU receives, and in turn transmits, an independent wavelength, on the same fiber strand, and provides end users with dynamically allocated bandwidth for voice, data and video services. On the upstream path, traffic from the ONUs is aggregated back to the OLT using network topologies such as tree, bus or fault-tolerant rings.

Thus, the PON system uses a double-star architecture. The first star is at the OLT, where the wide-area network interface to services is logically split and switched to the PON interface. The second star occurs at the splitter where information is passively split and delivered to each ONT. The OLT


is typically located in the carrier's CO. The OLT is the interface point between the access system and service points within the carrier's network. When data content from the network reaches the OLT, it is actively switched to the passive splitter. The OLT behaves like an ATM edge switch with PON interfaces on the subscriber side and ATM–synchronous optical network (SONET) interfaces on the network side.

The active network components are the Optical Line Terminal (OLT) at the CO and the Optical Network Unit (ONU) at the premises. For a BPON network, the SONET add/drop multiplexer (ADM) is replaced by the OLT at the CO and the ONU at the customer premises. With an EPON deployment, the OLT replaces the ATM switch and SONET ADM in the CO, while the ONU replaces the SONET ADM and router at the customer premises. This streamlines the architecture, and reduces costs and maintenance.

A design issue for PON technology is its lack of built-in redundancy when configured in its tree architecture. (In SONET for example a secondary ring provides almost immediate (50ms) reconfiguration for reliability). This is not an issue in cases where a PON is replacing a traditional point to point private lines, where one has to pay for a second line to obtain redundancy. Furthermore, given that PONs use passive components, the failure rate should be extremely low. Nevertheless, in order for PONs to have the redundancy offered by a point-to-point fiber pair, which can ensure availability through optical redundancy or route-diverse connections, several ONUs can be installed on the premises or the network must be deployed in the architectures shown in the figure below. The choice among these architectures will be based on cost of deployment and level of availability desired.

The two primary types of PON technology are asynchronous transfer mode PONs (APONs) and Ethernet PONs (EPONs).


BPON (aka APON)BPONs were developed in the 1990s through the work of the full-service access network (FSAN) initiative. FSAN was a group of 20 large carriers that worked with their strategic equipment suppliers to agree upon a common broadband access system for the provisioning of both broadband and narrowband services. British Telecom organized the FSAN Coalition in 1995 to develop standards for designing the cheapest, fastest way to extend emerging high-speed services, such as Internet protocol (IP) data, video, and 10/100 Ethernet, over fiber to residential and business customers worldwide.

At that time the two logical choices for protocol and physical plant were ATM and PON: ATM because it was thought to be suited for multiple protocols, PON because it is the most economical broadband optical solution. The APON format used by FSAN was accepted as an International Telecommunications Union (ITU) standard (ITU–T Rec. G.983). The ITU standard focused primarily on residential applications and in its initial version did not include provisions for delivering video services over the PON. Subsequently, a number of start-up vendors introduced APON–compliant systems that focused exclusively on the business market. The ITU Spec G.983.1 provides for alternative architectures leading to higher availability.

SBC ATM PON Characteristics

622Mbs (or 155Mbs) downstream and 155 Mbps upstream on a single feeder fiber WDM upgrades available (Broadband PON) two wavelengths are used—1550 nm for the downstream and 1310 nm for the upstream. ATM-based

TDM downstream; TDMA upstream does not use SONET frame uses ATM CBR circuit emulation for T1 transport uses ATM UBR, VBR for transparent LAN services Maximum reach 20 km SBC APON will support SVCs, VoATM, VoIP

The PON specification allows for up to 64 locations to be served. Thus, a typical BPON system can furnish up to 64 customer locations on a single, shared strand of fiber running at 155 Mbps. Most, however, are expected to initially utilize 32 locations in the distribution and drop portion of the network. EPON

Ethernet passive optical networks (EPON) are an emerging access network technology that provides a low-cost method of deploying optical access lines between a carrier’s central office (CO) and a customer site. This represents a that can ultimately lead to widespread adoption of a new optical IP Ethernet architecture that combines the best of fiber optics and Ethernet technologies. This architecture is aimed at delivering bundled data, video, and voice services over a single platform.

EPONs offer the highest bandwidth to customers of any PON system today. Downstream traffic rates of 1 Gbps in native IP have already been achieved, and return traffic from up to 64 ONUs can


travel in excess of 800 Mbps.

The development of EPONs has been spearheaded by one or two visionary startups that feel that the BPON standard is an inappropriate solution for the local loop because of its insufficient bandwidth, its complexity, and its expense. Also, as the move to fast Ethernet, gigabit Ethernet, and now 10-gigabit Ethernet picks up steam, these start-ups believe that EPONs will eliminate the need for conversion in the wide-area network (WAN)/LAN connection between ATM and IP protocols.

EPON vendors are focusing initially on developing fiber-to-the-business (FTTB) and fiber-to-the-curb (FTTC) solutions, with the long-term objective of realizing a full-service fiber-to-the-home (FTTH) solution for delivering data, video, and voice over a single platform. EPONs offer higher bandwidth, lower costs, and broader service capabilities than BPON.

In November 2000, a group of Ethernet vendors kicked off their own standardization effort, through the formation of the Ethernet in the First Mile (EFM) IEEE study group. The new study group aims to develop a standard that will apply the proven and widely used Ethernet networking protocol to the access market. Sixty-nine companies, including 3Com, Alloptic, Cisco Systems, Intel, MCI WorldCom, and World Wide Packets, have participated in the group.

IEEE P802.3ah STATUSThe standards work for Ethernet in the local subscriber access network is being done in the IEEE P802.3ah Ethernet in the First Mile (EFM) Task Force www.ieee802.org/3/efm , www.ieee802.org/3/efm/public. The IEEE P802.3ah EFM Task Force is bringing Ethernet to the local subscriber loop, focusing on both residential and business access networks. Requirements of local exchange carriers are vastly different than those of enterprise managers for which Ethernet was designed. In order to “evolve” Ethernet for local subscriber networks, P802.3ah is focused on four primary standards definitions:

1. Ethernet over copper2. Ethernet over Point to Point fiber3. Ethernet over P to Multipoint fiber (EPON)4. Operation, administration, and maintenance (OAM)

Thus, the EFM Task Force is focused on both copper and fiber standards, optimized for the first mile and glued together by a common OA&M system. This is a particularly strong vision, since it allows a local network operator a choice of Ethernet flavors using a common hardware and management platform. In each of these subject areas, new physical layer specifications are being discussed to meet the requirements of service providers while preserving the integrity of Ethernet. The Ethernet over P2MP track is focusing on the lower layers of an EPON network. This involves a PHY specification, with possibly minimal modifications to the 802.3 MAC. This emerging protocol uses MAC control messaging (similar to the Ethernet PAUSE message) to coordinate multipoint-to--point upstream Ethernet frame traffic. Baseline proposals have been submitted and are being negotiated. For example, recently an agreement was reached on standards for short distances (750ft) and longer distances (12000ft.). Long haul service will be able to aggregate 2MBs BW to reach the higher BW available at short distances. The standards for EFM are anticipated by September 2003.

The key difference between EPONs and BPONs is that in EPONs, data is transmitted in variable-length packets of up to 1,518 bytes according to the IEEE 802.3 protocol for Ethernet, whereas in APONs, data is transmitted in fixedlength 53-byte cells (with 48-byte payload and five-byte


http://www.ieee802.org/3/efm/public

http://www.ieee802.org/3/efm

overhead), as specified by the ATM protocol. This format means it is inefficient for BPONs to carry traffic formatted according to IP. For BPON to carry IP traffic, the packets must be broken into 48-byte segments with a 5-byte header attached to each one.

Economic Case for Ethernet PONsThe economic case for EPONs is simple: fiber is the most effective medium for transporting data, video, and voice traffic, and it offers virtually unlimitedbandwidth. But the cost of running fiber “point-to-point” from every customerlocation all the way to the CO, installing active electronics at both ends of each fiber, and managing all of the fiber connections at the CO is prohibitive. EPONs address the shortcomings of point-to-point fiber solutions by using a point-to-multipoint topology instead of point-to-point in the outside plant; by eliminating active electronic components, such as regenerators, amplifiers, and lasers, from the outside plant; and by reducing the number of lasers needed at the CO.

Comparison of Point-to-Point Fiber Access and EPONs

Point-to-Point FiberAccess

EPON

Point-to-Point Architecture Point-to-Multipoint Architecture

Active electroniccomponents are required atthe end of each fiber and inthe outside plant.

Eliminates active electronic components, such as regenerators and amplifiers, from the outside plant and replaces them with less-expensive passive optical couplers that are simpler, easierto maintain, and longer lived than active components

Each subscriber requires aseparate fiber port in the CO.

Conserves fiber and port space in the CO by passivelycoupling traffic from up to 64 optical network units (ONU) onto a single fiber that runs from a neighborhood demarcation point back to the service provider’s CO, head end, or POP

Expensive active electroniccomponents are dedicated toeach subscriber

Cost of expensive active electronic components and lasers in the optical line terminal (OLT) is shared over many subscribers

Unlike point-to-point fiber-optic technology, which is optimized for metro and longhaul applications, EPONs are tailor-made to address the unique demands of the access network. Because they are simpler, more efficient, and less expensive than alternative access solutions, EPONs finally make it cost-effective for service providers to extend fiber into the last mile and to reap all the rewards of a very efficient, highly scalable, low-maintenance, end-to-end fiber-optic network.

The key advantage of an EPON is that it allows carriers to eliminate complex and expensive asynchronous transfer mode (ATM) and SONET elements and to simplify their networks dramatically (if these technologies have not been deployed before). In a streamlined EPON architecture, an ONU replaces the SONET ADM and router at the customer premises, and an


OLT replaces the SONET ADM and ATM switch at the CO. This architecture has lower up front capital equipment and ongoing operational costs relative to SONET and ATM. EPON is easier to deploy than SONET/ATM because it requires less complex hardware and no outside plant electronics. This architecture can deliver bandwidth in scalable increments from 1 to 100 Mbps and up to xGbps and value-added services, such as managed firewalls, voice traffic support, VPNs, and Internet access.

The passive elements of an EPON are located in the optical distribution network (also known as the outside plant) and include single-mode fiber-optic cable, passive optical splitters/couplers, connectors, and splices. Active NEs, such as the OLT and multiple ONUs, are located at the end points of the PON. Optical signals traveling across the PON are either split onto multiple fibers or combined onto a single fiber by optical splitters/couplers, depending on whether the light is traveling up or down the PON. The PON is typically deployed in a single-fiber, point-to-multipoint, tree-and-branch configuration for residential applications. The PON may also be deployed in a protected ring architecture for business applications or in a bus architecture for campus environments and multiple-tenant units (MTU).

The interface between the customer’s data, video, and telephony networks and the PON is via the ONU. The primary function of the ONU is to interface the traffic in an optical format and map it to and from the customer’s desired format. A unique feature of EPONs is that, in addition to terminating and converting the optical signal, the ONUs provide Layer-2 and -3 switching functionality, which allows internal routing of enterprise traffic at the ONU. EPONs are also well suited to delivering video services in either analog CATV format, using a third wavelength, or IP video.

Because an ONU is located at every customer location in FTTB and FTTH applications and the costs are not shared over multiple subscribers, the design and cost of the ONU is a key factor in the acceptance and deployment of EPON systems. Typically, the ONUs account for more than 70 percent of the system cost in FTTB deployments, and in FTTH deployments they account for approximately 80 percent.

Key features and functions of the ONU include the following: Customer interfaces for POTS, T1, DS–3, 10/100BASE-T, IP multicast, and dedicated wavelength services. Layer-2 and -3 switching and routing capabilities. Provisioning of data in 64 kbps increments up to 1 Gbps. Note that Standard Ethernet interfaces eliminate the need for additional DSL or cable modems

EPONs offer many cost and performance advantages that enable service providers to deliver revenue-generating services over a highly economical platform. However, a key technical challenge for EPON vendors lies in enhancing Ethernet’s capabilities to ensure that real-time voice and IP video services can be delivered over a single platform with the same QoS and ease of management as ATM or SONET.

EPON vendors are attacking this problem from several angles. The first is to implement methods, such as differentiated services (DiffServ) and 802.1p, which prioritize traffic for different levels of service. One such technique, TOS Field, provides eight layers of prioritization to make sure that the packets go through in order of importance. Another technique, called bandwidth reserve, provides an


open highway with guaranteed latency for POTS traffic so that it does not have to contend with data.

Comparison of SONET, and EPON Service Objectives and Solutions

Objective ATM/SONET Solution Ethernet PON Solution

Real-timeservices

ATM service architecture andconnection-oriented designensure the reliability andquality needed for real-timeservice.

A routing/switching engine that offers native IP/Ethernet classification with advanced admission control, bandwidth guarantees, traffic shaping, and network resource management that extends significantly beyond the Ethernet solutions found in traditional enterprise LANs

Statisticalmultiplexing

Traffic shaping and networkresource management allocates bandwidth fairly between users of non–real-time services Dynamic bandwidth allocation implementation needed.

Traffic-management functionality across the internal architecture and the external interface with the MAN EMS provides coherent policy based traffic management across OLTs and ONUs. IP traffic flow is inherently bandwidth conserving (statistical multiplexing).

Multiservicedelivery

These characteristics worktogether to ensure that fairnessis maintained among differentservices coexisting on a common network.

Service priorities and SLAs assure thatnetwork resources are always available fora customer-specific service. Gives serviceprovider control of “walled-garden” services, such as CATV and interactive IP video.

Managementcapabilities

A systematic provisioningframework and advancedmanagement functionalityenhance the operational toolsavailable to manage the network.

Integrating EMS with service providers’OSSs emulates the benefits of connectionoriented networks and facilitates end-toend provisioning, deployment, andmanagement of IP services.

Protection Bidirectional line-switched ring (BLSR) and unidirectionalpath-switched ring (UPSR) provide full system redundancyand restoration.

Counter-rotating ring architecture providesprotection switching in sub 50 ms intervals.

ILECs realize that T1 services are their “bread and butter” in the business market. However, T1 lines can be expensive to maintain and provision, particularly where distance limitations require the use of repeaters. Today, most T1s are delivered over copper wiring, but service providers have already recognized that fiber is more cost-effective when demand at a business location exceeds four T1 lines.

EPONs provide the perfect solution for service providers that want to consolidate multiple T1s on a single cost-effective fiber. By utilizing a PON, service providers eliminate the need for outside plant electronics, such as repeaters. As a result, the expense required to maintain T1 circuits can be


reduced dramatically. In many cases, savings of up to 40 percent on maintenance can be achieved by replacing repeatered T1 circuits with fiber-based T1s.

EPONs provide the most cost-effective means for ILECs, CLECs, and MSOs to roll out new, higher-margin fast Ethernet and gigabit Ethernet services to customers. Data rates are scalable from 1 Mbps to 1 Gbps, and new equipment can be installed incrementally as service needs grow, which conserves valuable capital resources. In an analysis of the MSO market as claimed by Alloptics, an FTTB application delivering 10/100BASE-T and T1 circuits yielded a one-month payback (assuming a ratio of 70 percent 10/100BASE-T to 30 percent T1, excluding fiber cost).

Ethernet in the First Mile (EFM) Initiative

Metro solutions for Consumer/SOHO markets are different in the number of access sites involved, and the price points that must be met. The requirements include very low-cost Internet access, high-bandwidth video services as well as telephony. The key to getting the cost down and the functionality up can be found in EFM (Ethernet in the First Mile) technology. EFM is an effort within the IEEE to standardize a series of access technologies to cost effectively target the last mile. The EFM study group was formed within the IEEE 802.3 (CSMA/CD) Working Group in November 2000. Sixty-nine companies, including 3Com, Alloptic, Aura Networks, CDT/Mohawk, Cisco Systems, DomiNet Systems, Intel, MCI WorldCom, and World Wide Packets, are participating in the group. These Ethernet based access technologies can make use of both fiber and twisted pair distribution plants. EFM technologies can take advantage of various Metro IP and Metro Ethernet systems for transport back to the POP. EPON vendors are actively engaged in this effort.

In addition to the IEEE study group, EPON vendors participating in other standards efforts conducted within organizations, such as the Internet Engineering Task Force (IETF), ITU–Telecommunications Standardization Sector (ITU–T), and the Standards Committee T1. There is also a liaison with FSAN on this effort. The FSAN document (G.983) does not preclude non–ATM

protocols, and the FSAN document is broad in scope (covering many last mile issues). Much of G.983 remains valid, and it could be that the IEEE 802.3 EFM group will focus on developing the MAC protocols for EPON, referencing FSAN for everything else. This is the quickest path to an EPON standard, and several big names, including Cisco Systems and Nortel Networks, are backing EPON over APON.

Comparison of PON with xDSL This section will compare PON systems with xDSL technologies and describe the issues associated with each.

ATM is an ultrahigh-speed, one-size-fits-all, cell-based data transmission protocol that may be run over many physical-layer technologies such as xDSL modems. These are attached to twisted-pair copper wiring and transmit data at speeds of 1.5 Mbps to 9 Mbps downstream to the subscriber and 64 Kbps to 1.5 Mbps upstream, depending on the condition and distance of the copper line.

Asymmetric digital subscriber line (ADSL), for instance, offers users an always-on service, but its maximum downstream and upstream speeds are ultimately limited by distance and the aging copper


infrastructure; typically, only speeds of 1.5 Mbps over 12 kft are achieved. If the customer is not directly connected to a CO–based digital subscriber line access multiplexer (DSLAM), then an expensive upgrade to an existing outside-plant DLC system is usually the only solution.

Very-high-speed DSL (VDSL) extends ADSL downstream speed to a potential 52 Mbps, with a proportionately lower upstream speed, but offers a shorter distance range (1 kft to 3 kft) than ADSL. However, this too requires expensive outside plant electronics installed in a cabinet that must survive severe temperature variations. In addition to the distance problem, xDSL technology has inherent interference problems, a liability with copper-based technology. PONs cannot be interfered with by AM band radio and other radio frequency interference (RFI)/electromagnetic interference (EMI) sources. XDSL is largely considered to be a short-term broadband solution; since it can be easily installed without an expensive outside-plant infrastructure build, the existing copper plant can be used. The PON system, however, is believed to offer an ultimate, end-to-end broadband platform that is future-proofed.

BANDWIDTH AND DISTANCE CONSIDERATIONS

Network Service Distance Limit for Bandwidth Ranges

P O N Max. of 9-12 miles for 155 Mbps symmetrical

Asymmetric VDSL Max. of 1,000 ft. for up to 51.84 Mbps for downstream

Max. of 3,000 ft. for 12.96 to 25.92 Mbps for downstreamMax. of 4,500 ft. for 6.48 to 12.96 Mbps for downstream

Max. of 1,000 ft. for 3.24 to 6.48 Mbps for upstreamMax of 3,000 ft. for 1.62 to 3.24 Mbps for upstreamMax. of 4,500 ft. for 1.62 to 3.24 for upstream

Symmetric VDSL Max. of 1,000 ft. for 19.44 to 25.92 MbpsMax. of 3,000 ft. for 6.48 to 12.96 Mbps

Other Options (not necessarily PON) for Access

Optical Ethernet is a fourth-generation Layer 2 MAN/WAN technology. Optical Ethernet is a connectionless packet technology. It runs Ethernet on dark fiber, SONET and optical rings. Optical Ethernet can be configured on a point-to-point basis (emulating a circuit), or on a point-to-multipoint basis (emulating frame relay star networks) or on a many-to-many basis (emulating a broadcast LAN across a configured set of customer sites). These configurations can be used to interconnect Layer 3 routers and routing switches, and Ethernet switches.

Optical Ethernet is transparent to Layer 3 transport and routing protocols (including DNS (Domain Name System) and DHCP (Dynamic Host Configuration Protocol) and related tools, so it can work


with legacy protocols, SNA and IPX. It is scalable from 10 Mbps to 10Gbps+ Ethernet. Three major technology developments are key to optical Ethernet, and each can be used between enterprise sites, to access the carrier POP or as a backbone technology, in either private or service provider networks.

The simplest form of optical Ethernet is to run Ethernet over dark fiber, and to use Ethernet switches to connect locations. Various fiber-based solutions for single-mode and multimode dedicated fiber have been defined by the IEEE 802.3; for example, SX up to 550 meters, LX up to 5 Km and ZX up to 70 Km. Ethernet's next plateau will be 10 Gbps. A key difference from previous versions of Ethernet is that l0-GigE supports two physical interfaces, one optimized for the LAN environment, the other for the WAN. The WAN option allows 10-Gigabit Ethernet to be transparently transported across existing OC-192 SONET infrastructures.

Dense Wave Division Multiplexing (DWDM: This networking technique which has been deployed in carrier networks for a number of years. enables multiple wavelengths (each with 2.5 Gbps or more capacity) to be concurrently supported on a single fiber pair configured in a point-to-point or ring topology. Increasingly, DWDM networks are being deployed to provide wavelength services to support applications such as channel extension and storage networks for mainframe environments, ATM and video. While, to date, DWDM has been delivered through optical multiservice platforms, DWDM interfaces are becoming available on routers. Enterprises will be able to use optical architec-tures that will support both DWDM platforms and routers on a single ring. In the longer term. 10-Gbps Ethernet support and end-to-end wavelength services across the WAN will make DWDM even more important.

Resilient Packet Ring (RPR): This technology enables distributed Ethernet switching across optical rings running on fiber, lambdas or SONET pipes. RPR can be implemented in routers, Ethernet switches and optical platforms. The "users"-individual PCs or servers, or aggregation devices such as Layer 2 switches, Layer 3 routing switches or conventional routers - connect to RPR rings over a standard Ethernet interface operating at 10/100/1000 Mbps. These interfaces support IEEE802.1q/p, and users can be locally attached. if the RPR loops through the customer building, or remotely attached using Ethernet over dark fiber.

These Metro IP systems can distribute IP intelligence out to the edge of the network using Resilient Packet Ring technology. RPR is a resilient packet ring technology that combines the intelligence of IP routing with the optical rings. Designed primarily for metropolitan area networks, this approach delivers scalable Internet service, reliable IP-aware optical transport, and simplified network operations. A packet ring network consists of two counter-rotating fiber rings. Each optical ring can be used at the same time to pass both data and control packets doubling the effective bandwidth. The ring is self-healing and has a recovery time of less than 50ms. (In contrast, SONET rings do not use the second ring in normal traffic situatons, only for backup).

Cisco Dynamic Transport Technology (DPT) is based on the Spatial Reuse Protocol (SRP), a Cisco-developed MAC-layer protocol for ring-based packet internetworking. Cisco has submitted Spatial Reuse Protocol (SRP), which is an open, freely available specification (RFC 2892), to the IEEE 802.17 Resilient Packet Ring (RPR) Working Group for consideration as the basis for the industry standard. Cisco’s DPT uses Intelligent Protection Switching (IPS) L2 Path Restoration and enhanced IPS and scalability to deliver high performance and efficiency.


SRP is used in Cisco's Dynamic Packet Transport (DPT) product line, which has been shipping for more than two years, largely to cable modem service operators. Cisco's initial applications were for ISP intra-POP rings. DPT gave service providers a way to keep OC-3 port counts low and helped minimize the number of IP subnets within a site. DPT has helped lower interPOP connections and is used by cable modem operators to connect head-ends with data centers. Cisco claimed in excess of 12,000 installed DPT ports at more than 160 customers With Cisco's SRP, transit packets take prece-dence over entering packets, so there's no packet loss on the ring itself, which is an advantage when compared with Ethernet switches. Ordinary Ethernet switches lack a cut-through path for transit traffic, exhibit varying packet loss throughout the network as traffic congests at each node.

Companies like Appian Communications, Cisco, Dynarc and Lantern Communications are developing resilient packet ring (RPR) technologies, which replace Ethernet's media access control (MAC) layer with a new ring-based MAC. Atrica and a few others are addressing the challenge with ringbased solutions that preserve the Ethernet MAC. All these approaches promise service providers the best of both worlds: Ethernet's low cost and packet data efficiency, plus SONET's ring structure reliability and rapid restoral. The IEEE formed the 802.17 working group in 2000 to standardize RPR. The IETF also has a working group called IP over RPR (IPoRPR).

Service providers like their existing SONET rings and for good reasons. Besides SONET's 50-millisecond restoral, the rings reach more customers with less fiber than other topologies and require fewer switch ports at busy hub sites. But SONET, which was designed for voice circuits, wastes bandwidth when carrying packet traffic, and the spanning tree algorithm that guides most Ethernet switches purposely breaks rings in order to prevent bridging loops. Packet over SONET (POS) offers a partial solution, but only for point-to-point links. A better solution, according to the RPR proponents, would be a new packet MAC that uses rings efficiently but also exhibits the resilience and QOS of SONET.

In dual-ring topologies, SONET uses only one ring to carry live traffic; the other is reserved as a backup. To increase fiber utilization, RPR will send traffic over both rings (in opposite directions) during normal operation. An RPR ring will continue operating despite the loss of any node. In the


event of a fiber break or node failure, RPR will restore service at least as fast as SONET (50ms). This will likely entail linking the two rings into one, so some traffic may get bumped. In some older packet ring architectures, the source node removes unicast packets after they come all the way around. With RPR, destination nodes remove their unicast packets, freeing downstream bandwidth for reuse by other flows. Together with packet multiplexing and counter-rotating rings, destination stripping more than doubles RPR's total throughput compared to SONET. RPR supports multicast traffic: multicast packets travel once around the ring to reach every node. In contrast, mesh networks must replicate multicast packets in order to reach all destinations. RPR will be fast enough to carry Gigabit and 10-Gigabit Ethernet, but will also support lower data rates. New nodes may join the ring without manual configuration. RPR will deliver QoS. RPR will allocate bandwidth to competing flows on demand. RPR's primary mission is to make optical rings more efficient for packet traffic, but the standardization effort has attracted some developers who want to see it do more, especially in the realm of QOS and traffic control.

To provide end-to-end QoS SLAs, service providers can implement IP QoS features such as classification, rate limiting, traffic shaping and traffic policing at the edge, and features like WRED and MDRR/WFQ in the core. For Content Delivery Networks, the network can use integrated content awareness for load balancing across CDN content engines (CEs) and for prioritizing traffic based on URLs and cookies. RPR can be viewed as a SONET ADM replacement or simply a high-performance packet MAC. The rationale of the SONET replacement camp is the need to handle voice efficiently. In contrast, the keep-it simple camp argues that TDM support will be RPR's Undoing by making it too complex.Appian offers a hybrid approach. Its Optical Service Activation Platforms (OSAPs) dedicate some channels on a SONET ring to packet traffic and leave others for ordinary TDM. This allows OSAPs to share fiber rings with conventional SONET ADMs. Dynarc's implementation is more a blend than a hybrid (Sweden). Channels, in turn, are mapped into TDM-like timeslots. Channel capacity can be fixed, perhaps to tunnel a T1 through the network, or flexible to accommodate less sensitive flows. Atrica rejected the RPR MAC in favor of a 10-Gbps Ethernet MAC over WDM wavelengths. Furthermore, Atrica's Optical Ethernet Switches carry low speed TDM traffic in Ethernet frames. At speeds from T1 (1.5 Mbps) to OC-12 (622 Mbps), Atrica uses Ethernet circuit emulation. Others are developing chips for EPON and EFM aimed at noth TDM and Ethernet services.

Access ServicesTo provide high Bandwitdth Virtual Private Network services across Metropolitan Areas, service providers are considering Ethernet on fiber, DWDM and RPR, or a combination of the three. The demarcation between the user's environment and the network can be provided via an Ethernet User Network Interface (UNI ). In the simplest case, customers directly access the POP over the appropriate Ethernet on fiber UNI (usually GigE on single-mode fiber). The service provider may provide a demarcation device at a customer premise or a multi-tenant unit, which provides multiple 10/100/I000-Mbps Ethernet UN Is and Gigabit Ethernet connectivity into the network. From there, the traffic is carried over point-to-point fiber links, DWDM or RPR optical rings. These demarcation devices allow multiple customers to share access bandwidth.


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