What’s the Next FTTP Technology?

There is a lot of debate within the industry about the direction of the next generation of last mile fiber technology. There are three possible technologies that might be adopted as the preferred next generation of electronics – NG-PON2, XGS-PON or active Ethernet. All of these technologies are capable of delivering 10 Gbps streams to customers.

Everybody agrees that the current widely deployed GPON is starting to get a little frayed around the edges. That technology delivers 2.4 Gbps downstream and 1 Gbps upstream for up to 32 customers, although most networks I work with are configured to serve 16 customers at most. All the engineers I talk to think this is still adequate technology for residential customers and I’ve never heard of a neighborhood PON being maxed out for bandwidth. But many ISPs already use something different for larger business customers that demand more bandwidth than a PON can deliver.

The GPON technology is over a decade old, which generally is a signal to the industry to look for the next generation replacement. This pressure usually starts with vendors who want to make money pushing the latest and greatest new technology – and this time it’s no different. But after taking all of the vendor hype out of the equation it’s always been the case that any new technology is only going to be accepted once that new technology achieves and industry-wide economy of scale. And that almost always means being accepted by at least one large ISP. There are a few exceptions to this, like what happened with the first generation of telephone smart switches that found success with small telcos and CLECs first – but most technologies go nowhere until a vendor is able to mass manufacture units to get the costs down.

The most talked about technology is NG-PON2 (next generation passive optical network). This technology works by having tunable lasers that can function at several different light frequencies. This would allow more than one PON to be transmitted simultaneously over the same fiber, but at different wavelengths. But that makes this a complex technology and the key issue is if this can ever be manufactured at price points that can match other alternatives.

The only major proponent of NG-PON2 today is Verizon which recently did a field trial to test the interoperability of several different vendors including Adtran, Calix, Broadcom, Cortina Access and Ericsson. Verizon seems to be touting the technology, but there is some doubt if they alone can drag the rest of the industry along. Verizon seems enamored with the idea of using the technology to provide bandwidth for the small cell sites needed for a 5G network. But the company is not building much new residential fiber. They announced they would be building a broadband network in Boston, which would be their first new construction in years, but there is speculation that a lot of that deployment will use wireless 60 GHz radios instead of fiber for the last mile.

The big question is if Verizon can create an economy of scale to get prices down for NG-PON2. The whole industry agrees that NG-PON2 is the best technical solution because it can deliver 40 Gbps to a PON while also allowing for great flexibility in assigning different customers to different wavelengths. But the best technological solution is not always the winning solution and the concern for most of the industry is cost. Today the early NG-PON2 electronics is being priced at 3 – 4 times the cost of GPON, due in part to the complexity of the technology, but also due to the lack of economy of scale without any major purchaser of the technology.

Some of the other big fiber ISPs like AT&T and Vodafone have been evaluating XGS-PON. This technology can deliver 10 Gbps downstream and 2.5 Gbps upstream – a big step up in bandwidth over GPON. The major advantage of the technology is that is uses a fixed laser which is far less complex and costly. And unlike Verizon, these two companies are building a lot more FTTH networks that Verizon.

And while all of this technology is being discussed, ISPs today are already delivering 10 Gbps data pipes to customers using active Ethernet (AON) technology. For example, US Internet in Minneapolis has been offering 10 Gbps residential service for several years. The active Ethernet technology uses lower cost electronics than most PON technologies, but still can have higher costs than GPON due to the fact that there is a dedicated pair of lasers – one at the core and one at the customer site – for each customer. A PON network instead uses one core laser to serve multiple customers.

It may be a number of years until this is resolved because most ISPs building FTTH networks are still happily buying and installing GPON. One ISP client told me that they are not worried about GPON becoming obsolete because they could double the capacity of their network at any time by simply cutting the number of customers on a neighborhood PON in half. That would mean installing more cards in the core without having to upgrade customer electronics.

From what everybody tells me GPON networks are not experiencing any serious problems. But it’s obvious as the household demand for broadband keeps doubling every three years that the day will come when these networks will experience blockages. But creative solutions like splitting the PON could keep GPON working great for a decade or two. And that might make GPON the preferred technology for a long time, regardless of the vendors strong desire to get everybody to pay to upgrade existing networks.

A New PON Technology

ONTNow that many fiber competitors are providing gigabit Ethernet to a lot of customers we have started to stress the capability of the existing passive optical network (PON) technology. The most predominant type of PON network in place today is GPON (gigabit PON). This technology shares 2.5 gigabits of download data among up to 64 homes (although most providers put fewer customers on a PON).

My clients today tell me that their gigabit customers still don’t use much more data than other customers. I liken this to the time when the industry provided unlimited long distance to households and found out that, on the whole, those customers didn’t call a lot more than before. As long as you can’t tell a big difference in usage between a gigabit customer and a 100 Mbps customer, introducing gigabit speeds alone is not going to break a network.

But what does matter is that all customers, in aggregate, are demanding more downloads over time. Numerous studies have shown that the amount of total data demanded by an average household doubles about every three years. With that kind of exponential growth it won’t take long until almost any network will show stress. But added to the inexorable growth of data usage is a belief that, over time, customers with gigabit speeds are going to find applications that use that speed. When gigabit customers really start using gigabit capabilities the current PON technology will be quickly overstressed.

Several vendors have come out with a new PON technology that has been referred to as XGPON or NGPON1. This new technology increases the shared data stream to 10 gigabits. The primary trouble with this technology is that it is neither easily forward nor backward compatible. Upgrading to 10 gigabits means an outlay for new electronics for an only 4 times increase in bandwidth. I have a hard time recommending that a customer with GPON make a spendy upgrade for a technology that is only slightly better. It won’t take more than a decade until the exponential growth of customer demand catches up to this upgrade.

But there is another new alternative. Both Alcatel-Lucent and Huawei have come out with next generation PON technology which uses TWDM (time and wave division multiplexing) to insert multiple PONs onto the same fiber. The first generation of this technology creates four different light pathways using four different ‘colors’ of light. This is effectively the same as a 4-way node split in that it creates a separate PON for the customers assigned to a given color. Even if you had 64 customers on a PON this technology can instead provide four separate PONs of 16 customers. But with 32 customers this becomes an extremely friendly 8 customer per PON.

This new technology is being referred to as NGPON2. Probably the biggest benefit of the technology is that it doesn’t require a forced migration and upgrade to existing customers. Those customers can stay on the existing color while you migrate or add new customers to the new colors. But any existing customer that is moved onto a new PON color would need to have an upgraded ONT. The best feature of the new technology is that it provides a huge upgrade in bandwidth and can provide either 40 Gbps or 80 Gbps download per an existing PON.

This seems like a no brainer for any service provider who wants to offer gigabit as their only product. An all-gigabit network is going to create choke points in a traditional PON network, but as long as the backbone bandwidth to nodes is increased along with this upgrade it ought to handle gigabit customers seamlessly (when they actually start using their gigabit).

The big question is when does a current provider need to consider this kind of upgrade? I have numerous clients who provide 100 Mbps service on PON who are experiencing very little network contention. One strategy some of them are considering with GPON is to place gigabit customers on their own PON and limit the number of customers on each gigabit PON to a manageable number. With creative strategies like this it might be possible to keep GPON running comfortably for a long time. It’s interesting to see PON providers starting to seriously consider bandwidth management strategies. It’s something that the owners of HFC cable networks have had to do for a decade, and it seems that we are getting to the point where even fiber networks can feel stress from bandwidth growth.