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May 02 2016

Making sense of cable MSO’s FTTH options

Radio Frequency over Glass (RFoG) and Ethernet Passive Optical Network (xPON) have emerged as the two principal technologies for cable multiple-system operators (MSOs) for fiber-to-the-home (FTTH) deployments. While both technologies have their merits, a Bell Labs cost analysis for a European MSO shows that within 3 years of a FTTH deployment, xPON technology has a better business case than RFoG.

Growing bandwidth demand

In order to keep up with growing bandwidth demand and offer competitive Gigabit ultra-broadband services, MSOs have various options for enhancing their hybrid fiber coaxial (HFC) access networks.

Some are choosing to maintain the existing centralized HFC architecture and extend its capacity, either by introducing DOCSIS 3.1 (with the relevant outside plant upgrades), increasing or freeing up spectrum or moving to smaller service groups so that total bandwidth is shared between fewer subscribers, or a combination of all these.

Some MSOs are opting for a distributed HFC architecture where certain CMTS/CCAP functions are transferred from the central hub to remote nodes, which economizes both power and space in today’s hub offices. In a distributed architecture, fiber and IP transport must be deployed deeper into the network, which can be a stepping-stone to a FTTH deployment.

FTTH

However, most MSOs recognize that a move to a new FTTH architecture, and ultimately all-IP is inevitable. So many are already preparing, especially in very competitive markets where gigabit services are in high demand.

FTTH is an obvious choice for greenfield but can also be deployed as an overlay on an existing HFC network in brownfield areas. The superior capabilities of FTTH against HFC in terms of symmetrical bandwidth or resistance to interference allow MSOs to immediately offer premium business or residential services and provide mobile back-haul or cross-haul as part of a fixed-mobile convergence strategy.

In making this switch, MSOs have to decide which transmission technology to use over the fiber network. The most common contenders are Radio Frequency over Glass (RFoG) or a variant of IP-based Passive Optical Network technologies: Ethernet PON, Turbo-EPON or 10G EPON, with some operators also considering (10) Gigabit PON (GPON) and Time and Wavelength Division Multiplexed PON (TWDM-PON). All these technologies make use of a passive point to multi-point optical fiber network.

Radio Frequency over Glass

At first glance, RFoG seems an attractive short-term strategy. With RFoG, MSOs can deliver the same video, voice and data services as they do today, retain the same back office DOCSIS provisioning systems as well as the installed base of set-top boxes, cable modems, and embedded multimedia terminal adapters (eMTAs). RFoG also requires minimal new training. Because of this, there is little short-term disruption for an MSO.

However, as a technology RFoG carries some significant compromises which limit its long-term viability.

  • RFoG uses DOCSIS for IP services (internet and VoIP, for example). DOCSIS is known for its high cost per bit compared to PON. As downstream traffic consumption is expected to continue growing at a rate of up to 50% year-on-year in developed markets in the coming years, this results in RFoG carrying a very high CAPEX over time.
  • RFoG has the same bandwidth limitations as today’s HFC unless service groups are made smaller or DOCSIS 3.1 is introduced. Furthermore, RFoG follows the asymmetrical DOCSIS configurations for downstream/upstream bandwidth allocation.
  • The net upstream bandwidth achievable with RFoG is lower than HFC because of a phenomenon called optical beat interference (OBI). This results in significant packet loss, especially when bonding channels to achieve higher bandwidth, and compromises overall performance.
  • Despite compatibility with existing assets, RFoG still requires the installation of additional equipment in the hub and customer premises for RF-optical signal conversion (as shown in the RFoG architecture in Figure 1). As the subscriber base grows, these additional CAPEX costs grow significantly.

Figure 1: High level architectures for RFoG (top), EPON with RF overlay (top + middle) and (10G-)EPON without RF overlay (bottom)

IP based PON (xPON) technology

Because of RFoG constraints, MSOs are overwhelmingly opting for technologies such as EPON and GPON. These can both be considered “native” IP transport solutions over PON, and are therefore favorable technologies when looking ahead and preparing for a move to all IP. EPON and GPON differ with respect to wavelength carriers for upstream and downstream communication, but compared to RFoG solutions offer:

  • More symmetrical, future proof bandwidth. EPON comes in many flavors: standard EPON (1 Gbps symmetrical), Turbo-EPON (2 Gbps downstream/1Gbps upstream), 10G-EPON (10/1 Gbps) and finally (to date) 10 Gbps symmetrical. GPON exists as 2.5/1.25 Gbps and 10G-PON as 10/2.5 Gbps. (To simplify, we’ll now refer to these variants as xPON.)
  • Lower OPEX due to reduced power and maintenance requirements.

Furthermore, in order to make xPON technology more attractive to MSOs, the xPON system can be made fully transparent for the existing OSS/BSS system thanks to provisioning approaches such as DPoE (DOCSIS Provisioning of EPON).

In comparison to RFoG, the xPON-equivalent of a service group always corresponds to the number of households connected on one PON (typically up to 64, determined by the optical power budget), and where a fixed capacity has to be shared among those households. Existing broadcast channels can be transported in the downstream via a technique called RF overlay, by allocating a 3rd wavelength in downstream. A 4th dedicated wavelength in upstream could also be considered for the sake of legacy RF video return signaling, although this would have heavy cost implications on the Optical Network Unit (ONU) and return signaling for RF video is therefore mostly done based on IP.

With a view to the mid-term, having an xPON architecture already in place will ease the ultimate migration to an all-IP service delivery, causing less disruption.

So which technology should MSOs choose?

TCO analysis

One of the services of Bell Labs Consulting is to help cable operators to analyze such evolutionary options and develop a Total Cost of Ownership (TCO) or business case analysis. They recently did this for a European MSO contemplating the implications of EPON and RFoG. While of course this analysis was specific to one operator, it drew some interesting conclusions that can be generalized.

With an assumption of subscriber and bandwidth growth over time based on industry predictions, Bell Labs modeled various scenarios comparing RFoG with DOCSIS 3.0 and 3.1, various split ratios, various xPON technologies in different combinations, and an ultimate transformation to an all-IP, end-to-end service. The comparisons were given as total cost of ownership (TCO) per household connected (HHC) and also TCO per Mbps per HHC in order to take into consideration equivalent service speeds on each technology.

xPON TCO more favorable than RFoG from year 3

The most notable finding was that cumulated TCO for RFoG was only favorable up to year 3 (Figure 2). From that point on, xPON with an RF downstream overlay provided a significantly better TCO and hence business case. This is because with RFoG the operator needs to continuously invest in additional DOCSIS channels at the hub to keep up with growing traffic consumption.

Figure 2: Year-on-Year Cumulated TCO comparison

For example, in a 64 subscriber split, we observe that xPON with RF overlay has a 5 year TCO per HHC that is 37% lower than RFoG (Figure 3). TCO per Mbps per HHC is even better: around 65% lower than RFoG (DOCSIS 3.0). The xPON option becomes more profitable compared to RFoG within 3 years.

Bell Labs Consulting also considered the option of migrating directly to an IPTV solution. Here, the business case for xPON becomes even more attractive. ONUs are less expensive as there’s no need for an optical wavelength triplexer, whereas RFoG costs increase because of the higher hub CAPEX as all managed video is now distributed via DOCSIS. The 5 Year TCO per HHC was 52% lower than RFoG while TCO per Mbps per HHC was around 75% lower (DOCSIS 3.0). xPON becomes more profitable from year 2 onwards.

Figure 3: TCO comparison RFoG and xPON

High capacities and premium services

Other scenarios modeled the impact of adding 10G-EPON technologies alongside EPON (with or without RF overlay) or RFoG in order to offer premium or business subscribers with 1Gbps or higher xPON services. Also in such scenarios, with a percentage of premium subscribers typically around 10 percent, the xPON TCO figures became more favorable than RFoG from year 3 onwards.

Making the right choice

Customer service is paramount for MSOs when considering any technology changes. The first decision to be made is when and whether to employ FTTH technologies versus a DOCSIS 3.1 upgrade. Indeed, some major MSOs are moving initially to a hybrid delivery while many smaller MSOs are seriously considering a migration directly to FTTH. Then, for the cable operator’s FTTH network, both RFoG and EPON with DPoE enable MSOs to deploy FTTH with minimum disruption to back-end systems. Therefore, cable operators should determine when the business case for xPON becomes more favorable than RFoG as one of the key components in building an FTTH deployment strategy.

As Bell Labs Consulting found for the Tier 1 MSO in Europe, the cumulative TCO for xPON becomes more favorable than RFoG in less than 3 years.

In addition to the business case alone, cable operators must consider the rapid evolution of consumer behavior resulting in the need for higher and symmetrical IP bandwidth for services, both in business and residential environments. At the same time, new business opportunities for an IP-capable FTTH network such as small cell backhaul services will emerge in the short to medium timeframe.

In short, not only is the TCO, over a course of 5 years, 37-52% lower with xPON technology compared to RFoG, but the end result is a future-proof IP fiber access network to meet any residential or business service demand.

Bell Labs consulting and Nokia’s fixed networks cable experts can discuss the impact and benefits of all these fiber based technologies on your particular evolution strategy.

About Tom Van Caenegem
Tom has 15 years of experience in telecommunications and since 2011 has been engaged in several consulting projects as Solution Architect. Previous roles include research engineer and technology lead for the CTO office in the wireline access division at former Alcatel-Lucent/Alcatel where he authored/ co-authored several published papers and patents related to PON/FTTx and video. He has deep knowledge and experience on many aspects of modern IP telecommunications such as IPTV/ Video / CDN domain, Fixed Access architectures (Telco and MSO), (carrier) Wi-Fi deployments, IP/MPLS networking, Home networking (DLNA, management), IMS solutions, Carrier cloud , NFV and SDN. He holds a M.Sc. degree in Physical Engineering (Ghent University, Belgium, 1995) and a PhD degree in Electro Technical Engineering (Ghent University, 2001)