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S T R A T E G I C W H I T E P A P E R

The pace o fber network rollouts around the world continues to accelerate. In 2009,

there were roughly 20,000 new users connected daily to fber-based passive optical net-

works (PON) worldwide; this number will increase by 70 percent in 2010. Governments are

making huge investments in fber initiatives, yet no one can say defnitively how all this

fber will be used in the uture. In the same way electrical plants were built 70 years

ago with enough capacity to support appliances that nobody could have dreamed oback then, todays broadband rollout is laying the oundation or a whole new kind o

digital lie.

Are todays fber networks uture poo? How long will we be able to continue to rely on

them? How much o a network operators investment can be protected over the longer

term? This paper looks at the possibilities beyond current-generation PON and at what

operators must do to protect legacy investments while ensuring their networks readiness

or uture evolution.

Which way forward?Next-generation PON and the future of ber

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Table of contents

1 Choosingthepathtobersfuture

2 PONtodate

2 Technology snapshots

3 Whatisnext-generationPON?

3 NGPONrequirements

3 Capacity

4 Reach and split

4 Resiliency

4 Power savings

5 Optical troubleshooting

5 NGPONdeploymentscenarios

6 Makingthemigration

6 From GPON to 10G GPON

7 From EPON to 10G EPON

7 Additional considerations

8 NG PON migration: Big bang or gradual migration?

8 Beyond10GGPON

8 TDM PON

9 WDM PON

9 Hybrid PON

10 Supportingthenext-genevolution

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Which way forward? | Strategic White Paper 1

Choosing the path to bers future

More than 50 million subscribers around the world get their network access via ber broadbandconnections. In 2009, some 20,000 of those users connected to passive optical networks (PON)every day. Many new, non-traditional players are entering the ber arena: Internet service providers,municipalities, utilities even national governments.

Globally, ber optic rollouts show no sign of slowing down, although the growth prole varies fromcountry to county, beginning with operators choice of technology. In Asia, EPON (Ethernet PON)dominates, with Japan and South Korea as the pioneers and China joining more recently with amix of EPON and GPON (gigabit PON) deployments. GPON remains the rst choice in NorthAmerica, with a small percentage of point-to-point (P2P) optical deployments driven by municipali-ties and developers. Europe has a mix of P2P and GPON deployments, the latter being the preferredchoice of carriers.

The ber maturity of these markets is another key differentiator. Countries like China are engagedin phases of massive, rapid initial deployment, leapfrogging slower-moving nations. The UnitedStates, the United Kingdom, Germany and others with ber already on the ground are now lookingto expand growing cost-effectively to keep pace with consumers apparently insatiable demand

for high-bandwidth services.

In the most mature markets such as Japan and South Korea, which have traditionally highbandwidth user requirements and where ber accounts for more than 60% of all deployments thequestion is: Whats next? These mature markets will be the lead players in modeling next-genera-tion ber networks. They have the most signicant investments to protect (in terms of establishedinfrastructure) for them, the issue isnt so much what to deploy as it is how to evolve whatsalready been deployed.

Despite their differences, the common denominator among the worlds ber markets is skyrocketingend-user demand for bandwidth. Todays successful commercial triple-play service packages offerbandwidths between 20 and 30 Mb/s per user. Some operators mainly in Europe, joined by a

few multiple systems operators (MSOs) in North America are already offering 100 Mb/spremium services.

Although current technologies such as GPON will easily meet the mid-term needs of 40 to 60 Mb/sper user, over the longer term they will struggle to answer the requirements of HDTV, 3DTV, mul-tiple image and angle video services, growth in unicast video (versus broadcast), cloud computing,telepresence, multiplayer video gaming and more.

Looking into that farther future, operators need to consider today which optical networking plat-form will allow them to evolve and adapt most cost-effectively and intelligently as conditions change.

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Which way forward? | Strategic White Paper2

PON to date

PON has followed two largely separate tracks of development over the years: GPON is the latestoffshoot of the FSAN/ITU standard, with APON and BPON its grandparents; EPON is the productof the IEEE standard. After several years in the market and given the dramatically intensieddemands of that market both GPON and EPON are being updated.

TechnologysnapshotsEPON

Mass deployments of EPON began in 2004 and today serve more than 30 million subscribers. Of thetwo PON architectures, the existing version of EPON is most hampered by its capacity, supportingjust 1 Gb/s for both uplink and downlink. This is becoming insufcient for the demands of todays IPmultimedia services. Recognizing that an update was long overdue, IEEE ratied a new standard for10G EPON in 2009, with higher-bandwidth products set to ship in the second half of 2010.

GPON

GPON is slightly younger than EPON, with mass rollout starting in 2006. Offering 2.5 Gb/s down-link and 1.25 Gb/s uplink, it does not face the same immediate capacity concerns as EPON. Newstandards for 10G GPON also referred to as NG-PON or 10G-PON for its 10 Gb/s downlinkspeed are expected to be ratied in 2010, with initial deployments coming in 201112.

Figure 1. Worldwide PON market as sessment (20102013)

0

10

20

30

40

2010 2011 2012 2013 2014

Ports(M)

10G GPON 10G EPON GPON EPON

While the two current PON standards will continue to be used widely for the next few years, it isestimated that shipments of next-generation PON (NG PON) will reach 18 million ports by theend of 2014 with biggest proportion of those to Asia.

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What is next-generation PON?

Operators and equipment vendors are actively collaborating to create the next generation ofoptical technology. Most research and development has focused on developing and commercializing10G EPON and 10G GPON, with the goal in both cases being to increase bandwidth withoutdisrupting services or affecting the outside plant.

Aware of EPONs limitations, IEEE began working on a 10G EPON white paper in 2007 and ratiedthe new standard in 2009. IEEE envisioned two tracks for the new standard: one asymmetrical, with10G downstream and 1G upstream; the other symmetrical at 10G in both directions.

ITU/FSAN has taken a slightly different approach to GPON. The FSAN next-generation technol-ogy roadmap extends beyond 2015 and identies two distinct waves. The rst, known as NG-PON1,is underway today. It proposes both asymmetrical and symmetrical options: the asymmetricalproviding 10G downstream and 2.5G upstream (XG-PON1) and the symmetrical delivering 10Gin both (XG-PON2). Next-generation GPONs higher upstream bandwidth (compared to EPON)is driven by emerging new services that require greater upstream capacity, such as cloud computingand video sharing.

The second wave, NG-PON2, is expected around 2015 and accounts for technologies such asDWDM and OFDM that will enable even higher bandwidth capabilities.

Unlike NG-PON1 which preserves the existing outside plant NG-PON2 will likely requirechanges in the ber plant.

Figure 2. The two waves of the FSAN NG GPON roadmap

2010 2015

Capacity

DWDM, OFDM,

Elect. CDM...

NG PON2

XG-PON2 Key requirement:Preserve OSP

Research and developmentrequired for economicallyviable NG PON2

G-PON

XG-PON1

NG PON1

NG PON requirements

Capacity may be the most conspicuous driver of the shift to next-generation PON, but its not theonly one. Increased reach and split, greater resiliency, improved power consumption and enhancedoptical troubleshooting are also among the benets service providers are seeking from migration.

Capacity

The future will bring applications such as cloud computing, HD video-on-demand (VoD), largele sharing, on-premises web hosting, multiplayer video gaming, networked personal video record-ing (PVR) and increased use of videoconferencing technologies. All of these have the potential togenerate new average revenue per user (ARPU) and differentiate service providers offerings butrealizing that potential will require new network capabilities.

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Moving to a next-generation PON architecture will ensure service providers have the bandwidthto support the next generation of services, wired and wireless.

Both the IEEE and ITU/FSAN agree that 10G downstream will provide sufcient bandwidth inlong run, but what about upstream? It may seem inarguable that having more upstream bandwidthwould only ever be a good thing, considering that applications requiring higher upstream bandwidthwill be the ones that differentiate operators service offerings and realize additional ARPU. Yet

higher bandwidth comes at a higher cost, making the asymmetric option of either EPON or GPONpreferable in most cases because it provides a manageable balance of cost and capacity.

Given that the downstream values of asymmetrical EPON and GPON are identical but thatGPON offers more bandwidth for upload GPON represents the stronger option where capacityis concerned.

Reachandsplit

In PON networks, the optical budget denes the degree to which a light signal can be attenuated(dimmed) before problems such as increased error rate start to be encountered. It may be the mostimportant attribute of an optical system, as it determines how far the ber can extend from theexchange to the furthest subscriber (its reach).

A networks optical budget can be reduced by impurities in the glass used, ber length, joints andcertain equipment components such as WDM lters.

The current XG-PON standard species both 29dB and 31dB optical budgets for its networks and isbeing updated to include 33dB and 35dB classications that will extend reach to users within radiiof 25km, with splits among 256 users. For service providers, this appeals on many levels. Architec-turally, increased reach and split mean the network ultimately requires fewer nodes and allows forthe consolidation of central ofces resulting in signicant OPEX and CAPEX cost savings. Along-reach version of XG-PON is also planned up to 60 km which is far beyond todays copperloop distances.

Resiliency

Service resilience has not been a strong requirement in current-generation PON; as a result, resil-ience mechanisms were not fully dened in the standards. Because next-generation PON will haveto support a diversity of high-value services for residential and business applications (e.g., HD VoD,IPTV, videoconferencing) and manage greater levels of system integration at the networks videohead-ends, failures in shared PON sections could affect multiple customers and services. Ensuringservice availability is key especially compared to the performance of previous PON architectures.Next-generation PON includes a range of cost-effective resilience options with both duplex anddual-parenting duplex system congurations.

Powersavings

Cutting back on energy consumption has become a priority for most service providers as an effec-tive means of reducing operating costs while minimizing environmental impact, particularly interms of greenhouse gas emissions. Power savings in the access network, however, cannot come atthe expense of lifeline services such as voice these must be sustained for as long as possible usingbattery backups when electrical service is interrupted. Both next-generation EPON and GPONinclude full-service and sleep modes to accommodate these power demands. A third potential modewould allow the optical network unit (ONU) to economize on backup battery power consumptionduring a power outage.

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Opticaltroubleshooting

The ability to differentiate reliably between optical and electrical faults and to establish if thefaults are in the optical distribution network (ODN) or the electronics is essential for networkoperators. NG PON will take current GPON capabilities of basic testing and diagnosis and expandthose further to include:

ODN monitoring/checking: The ability to monitor and provide on-demand checking of ODNconditions independently of the PON system is important to differentiate ODN failures fromsystem failures. In next-generation PON this is achieved with the use of an optical time domainreectometer (OTDR), supported by a power meter and light source.

End-to-end performance monitoring up to the Ethernet layer: This allows operators to diagnose andregister where customer trafc may have been dropped or throttled and respond before an actualproblem occurs.

Proactive versus reactive repair: Both options must be available.

Co-existence of GPON and NG-PON: Next-generation GPON supports the interworking ofsupervision functions between GPON and NG-PON.

NG PON deployment scenarios

Next-generation PON solutions may be deployed in a number of different situations by a variety ofoperators to meet a range of needs. These include:

Large businesses that require greater bandwidth capacityNG PON technology will bring more bandwidth for the convergence of residential and businessuse. Business services introduce a whole new set of trafc demands, requiring services such assymmetrical Ethernet, remote storage backup transport, high-denition security surveillance andcloud computing, as well as Metro Ethernet Forum (MEF)-compliant services. With the next-generation PON platforms, more capabilities are available to offer these high-bandwidth services.

Mobile backhaulThe ramp-up of new services that drive higher bandwidth consumption is no longer limited tothe home. As wireless operators deploy 3G networks and move to Long Term Evolution (LTE),

mobile subscribers will use their smartphones to access bandwidth-hungry services with signi-cant components of video streaming and sharing. This process will break the traditional voice-optimized TDM leased-line mobile backhaul network, which does not cost-effectively scale insupport of exponentially increasing data trafc. Next-generation PON is seen as a cost-efcientway for the backhaul network to cope with the explosion of mobile trafc. In 2009, Alcatel-Lu-cent demonstrated the use of a 10G GPON system to deliver streaming video trafc to an LTEbase station.

Larger multi-dwelling housing unitsGiven that having greater numbers of users in a single building reduces available bandwidth peruser, one of the commonly discussed applications for 10G GPON is to serve multi-dwelling units(MDUs). In MDUs, a large number of splits can be used to feed multiple living units either byFTTH (splitter in the basement) or FTTB (MDU ONU in the basement) scenarios. Despite the

large number of users sharing the same ber feeder connection, 10G GPON would provide suf-cient bandwidth and allow each user to burst up the full line rate.

High-end customersNewer services will undeniably require greater bandwidth. For the majority of users, currentPON will be sufcient for several years to come, but innovators and early-adopters of new ap-plications and technologies will require 10G very soon. As a case scenario, imagine backing upa smartphone with 8 to 16 Gb of data in 10 minutes. The bandwidth needed to transport 8 Gbin that time today is around 110 Mb/s. Going to 16 Gb would require around 220 Mb/s. Today,users obtain this bandwidth by connecting via their PCs; in future, they will be able to do sodirectly via their handheld device.

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Making the migration

Depending on their current PON architecture, network operators face different paths and chal-lenges in carrying out a next-generation migration.

FromGPONto10GGPON

This is the easiest of the migration paths. Optical line termination (OLT) equipment does not need

to be replaced and no forklift upgrades are required. Because 10G GPON operates on a wholly differ-ent wavelength than GPON, it can use the same infrastructure (e.g., ber feeder and splitters) beforereaching the wavelength blocking lters (WBFs) at the ONT. At the exchange side, a wavelength di-vision multiplexer (WDM) is deployed to split out the colors of the GPON and 10G GPON signals.While this WDM can be deployed when 10G GPON is introduced, operators may consider deploy-ing the WDM during GPON installation to avoid service interruption during migration.

GPON and next-gen 10G GPON can fully co-exist: it would be possible, for instance, to install asingle 10G GPON ONT for business users or mobile backhaul purposes while maintaining current-generation GPON in the short term to serve residential customers. The GPON network can beupgraded incrementally to 10G GPON based on the network operators needs. Given this, migra-tion can be demand-driven, not forced.

Migrating from GPON to 10G GPON is also cost effective. As 10G GPON uses the same bers asGPON, capital requirements are minimized and past investments are not stranded the GPONOLT, ONT and OSP can all be reused. Considering that installation of outside ber plants countsfor 70% of total investment in GPON, it is easy to understand why is this important.

Figure 3 shows the co-existence capability of GPON and 10G PON and also hints at the poten-tial capacity of optical ber. Existing GPON, already capable of delivering up to 1 Gb/s per home,occupies just two colors (i.e., wavelengths) on the ber. 10G GPON is implemented using twoadditional colors. Together, these colors represent only a small fraction of the total spectrum thatcould ultimately be supported.

Advances in cost-effective optical technology since the original design of GPON have enabledfour times greater speed downstream using just one quarter of the spectrum an overall efciencyimprovement of 16 times.

Figure 3. Co-existence of GPON and 10G GPON on the same network

GPONGPON

10 Gb/s

GPON

10 Gb/s

GPON

No changesto OSP, includingfiber and splitter

10 Gb/s ondifferent wavelengths

(up and down)

STOP

STOP

WDM to splitGPON from

10 Gb/s GPON

Many GPONONTs todayhave WBF

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FromEPONto10GEPON

Network operators currently using EPON technology face a slightly more difcult next-generationmigration path. This is primarily because EPON and 10G EPON have overlapping upstream wave-lengths meaning their trafc cant exist on the same infrastructure without some kind of mecha-nism that would separate the 1G from the 10G trafc. Upstream trafc is divided by time-divisionmultiplexing (TDM). Since this is not implemented in the EPON OLT, operators must perform afull forklift upgrade with new OLT for all customers stranding investments in the legacy EPON

architecture, which may be a cost-prohibitive proposition for some. Another option is to deploy newoptic distribution network for 10G EPON, but this means the original investment in ber plant isnot preserved.

Once 10G EPON has been deployed, service providers can upgrade seamlessly from the asymmetric1 Gb/s uplink system to the symmetric 10 Gb/s system on a per user basis using the same outside plant.This allows them to introduce symmetrical 10G EPON to individual users without replacing all cus-tomers equipment, minimizing the operational impact of upgrading a large, in-service FTTH network.

Figure 4. Co-existence of EPON and 10G EPON on the same network

EPON EPON

10 Gb/s

EPON

10 Gb/s

EPON

No changesto OSP, including

fiber and splitter

10 Gb/s DL different1 or 10 Gb/s UL on same

STOP

STOP

Fork-lift upgrade

X

Additionalconsiderations

The exibility offered by GPON is not exclusive to a 10G GPON migration. Current GPON net-works can be upgraded to 10G/10G EPON as well, because the two dont share the same wavelengthdomain. However, migration from GPON to 10G/1G EPON is not possible on the same ODN dueto the overlap of the 1G optical wavelengths.

Figure 5. Migration option matrix

10/10 EPON up10 GPON up

1260

-1280

1260

-1360

1480

-1500

1550

-1560

1575

-1580

(in nm)

10G/1G EPON 10G/10G EPON 10G GPON

EPON

From

To

Fork-lift Fork-lift New ODN

GPON New ODN Yes Yes

EPON up10/1 EPON up

GPON downEPON down

10G PONdown

GPON up CATV

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NGPONmigration:Bigbangorgradualmigration?

PON technology is evolving even as deployments proceed today, making some operators hesitant tocommit to a current technology track. When breakthroughs happen nearly constantly boostingperformance, enhancing capabilities and lowering cost to serve it is always tempting to wait forthe next big thing.

The reality, however, is that technology will never stand still long enough to create a perfect mo-

ment for deployment; while operators wait for such a moment to come they may lose ground, busi-ness opportunities and market share.

The good news is that a big-bang transformation isnt necessary. Current PON, especially GPON,will be bandwidth- and cost-efcient for the medium term and next-gen technologies are still fewyears away. New technology can be introduced gradually and according to scenarios that makesense from business point of view. This is in fact what happened when GPON emerged as the suc-cessor to BPON. Operators that had deployed BPON did not replace their installed base wholesalewith GPON. Instead, they introduced GPON incrementally in overlay or greeneld situations.BPON is actually still deployed today, mostly to extend existing sites.

Because GPON and 1oG GPON can co-exist on the same ber, gradually introducing 10G GPON

is particularly cost-effective it may be introduced initially as a super-premium offering and even-tually become standard for new installations.

This isnt to suggest a complete transition to 10G GPON is out of the question in every case. Incertain situations where GPON penetration is small and higher-bandwidth service is needed, anoperator may wish to move all subscribers to 10G GPON to reduce OPEX by having just onePON technology.

Beyond 10G GPON

Looking beyond the next decade, even greater network speeds will be required. Given that GPONis more widely distributed than EPON, this next section looks at possible developments post-10GGPON. Preliminary work is underway to determine how speeds of 40 Gbit/s and even 100 Gbit/scould be achieved, with three main technologies in contention:

TDMPON

The TDM PON architecture is very similar to existing GPON systems, with the electronics andoptics being much faster. Although this is conceptually simple technology and it allows reuse ofthe existing ber plant, the cost of developing and manufacturing optics to support these data rateswould be high. Additionally, basic limitations of the ber start to come into play through factorssuch as chromatic dispersion making pure TDM an unlikely approach.

Figure 6. The TDM PON option

1260 1380 1480 1600 nm

ONT

ONT

1:n40/100GPON

40G PON or 100G PON (CGPON)

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WDMPON

WDM PON is one of the most intriguing potential technologies of the future, combining the bestof P2P and PON by creating a logical point-to-point with end users with no bandwidth limita-tion while preserving the economical advantages of PON. In WDM PON, one wavelength isassigned per customer, enabling very high-speed transport.

There are, however, challenges. First, it seems likely that the most expensive form of WDM,

DWDM, would be needed. Second, ensuring wavelength stability at the user end under extremetemperature conditions would be far from easy. Filtering requirements at the user end would also becomplex, and upgrades and changes would be more difcult. It is expected that color-specic ONTswould likely be needed when using DWDM PON; however, there is no clear best solution to thisproblem at the present.

Figure 7. The DWDM PON option

WDM ONT

WDM ONT

WDM PON

Upstream Downstream

Pure DWDM PON

HybridPON

This method implements multiple 10G GPONs each using different wavelengths on the sameber, effectively stacking existing 10G GPONs within the same ODN. The wavelength multiplexingwould be less expensive than with DWDM PON (as CWDM could be used instead) and fundamen-tal improvements in optics performance would not be required.

Besides offering additional bandwidth, Hybrid PON offers another appealing feature: it permitswavelength leasing, whereby different operators could use different colors (wavelengths) and sendtheir respective trafc over the same infrastructure. This unbundling scenario is considered attrac-tive because it provides a cost-effective way for fair competition among operators. The challenge withthis scenario is that it requires operator-specic ONTs (i.e., a specic wavelength for each operator).

Given that Hybrid PON allows the usage of the same point-to-multipoint network designed forGPON and requires only some changes in optical components, it represents a compromise optionthat may gain industry support.

Figure 8. The Hybrid PON option

4 10GPON

Stacked 4x XG-PON

1260 1380 1480 1600 nm

1:n

10GPON ONT

10GPON ONT

10GPON ONT

10GPON ONT

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Supporting the next-gen evolution

Network operators are showing great interest in next-generation PON. While the actual imple-mentation date may yet be a few years away, it is important for them to fully prepare their networksto ensure seamless migration when the time comes and protect their legacy PON architectureinvestments.

In an environment of never-ending upgrades, the most important aspect for operators to get right isthe basic architecture at the infrastructure level. If ber optic cables are laid with the correct capac-ity and attention to detail, it will be possible to use PON at ever increasing speeds for decadesto come, with each new advancement rolled out at the appropriate time and at an affordable cost.

The evolutionary path for GPON is smooth, incremental and targeted at the eventual goal of mi-gration to NG-PON2. As research is carried out over the next ve-plus years, GPON networks canbe migrated to next-generation GPON economically making full reuse of all currently deployedOSP to carry legacy GPON and next-gen 10G GPON trafc on the same infrastructure.

Alcatel-Lucent continues to lead the industry in delivering advanced access technologies. Withmore than 100 ber projects around the world more than 85 of which are GPON-based com-

bined with the latest 10G symmetrical trials and Bell Labs involvement in optical technologies,Alcatel-Lucent has the experience and technical depth to ensure its ongoing leadership positionand support providers through their next-generation PON migrations whether its GPON, EPONor WDM PON.

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www.alcatel-lucent.com Alcatel, Lucent, Alcatel-Lucent and the Alcatel-Lucent logoare trademarks of Alcatel-Lucent. All other trademarks are the property of their respective owners.The information presented is subject to change without notice. Alcatel-Lucent assumes no responsibilityfor inaccuracies contained herein. Copyright 2010 Alcatel-Lucent. All rights reserved.CPG4688090922 (07)

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