25-Gigabit PON

The industry has barely broken ground on 10-gigabit PON technology in terms of market deployments, and the vendors in the industry have already moved on to 25-gigabit PON technology. I know a few ISPS that are exclusively deploying 10-gigabit XGS-PON, but most ISPs are still deploying the fifteen-year-old GPON technology.

As a short primer, PON (passive optical network) technology is a last-mile technology that uses one laser in a core location to communicate with multiple customers. In the U.S., most ISPs don’t deploy GPON to more than 32 customers. The passive name in the technology is due to the fact that there are no electronics in the network between the core laser and the customer lasers. GPON technology delivers 2.4 Gbps of bandwidth to a PON (a group of customers connected to the same core laser). The upgrade to XGS-PON brings something close to 10 Gbps to PON, while the 25-GS-PON will bring 25 Gbps.

The PON technology is being championed by the 25-GS-PON MSA (multisource agreement) Group that has come together to create a standard specification for the 25-gigabit technology. It’s worth a glance at their website because it’s a virtual who’s-who of large ISPs, chip manufacturers, and electronics vendors.

I’m not hearing a lot of complaints yet about ISPs who are seeing GPON technology being overwhelmed in residential neighborhoods. I’ve asked recently, and most of the small ISPs I queried told me that individual neighborhood PONs average about 40% utilization, meaning that 40% of the bandwidth to customers is being used at the same time. ISPs start to get worried when utilization starts routinely crossing 80%, and ideally, ISPs never want to hit 100% utilization, which is when customers start getting blocked.

The cellular carriers were the first champions of 10-gigabit PON technology. This is the most affordable way to bring multi-gigabit speeds to small cell sites. The network owner can deploy a 10-gigabit core and communicate with multiple small cell sites without needing the extra field electronics used in a Metro Ethernet network. The 25-gigabit technology is aimed at cell sites and other large bandwidth users.

The technology is smartly being designed as an overlay onto existing GPON and XGS-PON deployments. In an overlay network, a GPON owner can continue to operate GPON for residential networks, can operate XGS-PON for a PON of businesses with larger bandwidth requirements. The 25GS-PON would be used for the real heavy hitters or perhaps to create a private network between locations in a market.

I’ve been thinking about the benefits of 25GS-PON over the other current GPON technologies.

  • This is a cheaper technology than the alternatives. The MSA group has designed this to be a natural progression beyond GPON and XGS-PON. That means most of the components of the technology benefit from the huge manufacturing economy of scale for PON technology. If 25G-PON costs are low enough, this could spell the eventual end of Metro Ethernet as a technology.
  • It’s a great way to bring big bandwidth to multiple customers in the same part of a network. This technology can supply bandwidth to small cell sites that wasn’t imaginable just a few years ago.
  • The technology is easy to add to an existing network by sliding a new card into a compatible PON chassis. That means no new racks in data centers or new shelves in huts.

Electronics manufacturers have been frustrated by how long the GPON technology has remained viable – and in many applications might be good for years to come. Telecom manufacturers thrived in the past when there was a full replacement and upgrade of electronics needed every seven years. Designing 25-gigabit PON as an overlay is an acknowledgment that upgrades in the future are going to be incremental, and upgrades that don’t overlay onto existing technologies will likely be shunned. ISPs are not interested in rip and replace technologies.

The 25GS-PON technology might become commercially available as early as the end of 2022. There have already been field trials of the technology. After that, the vendors will move on to the next PON upgrade. There’s already talk of whether the next generation should be 40-gigabit or 100-gigabit.

Are You Ready for 10 Gbps?

Around the world, we’re seeing some migration to 10 Gbps residential broadband. During the last year the broadband providers in South Korea, Japan, and China began upgrading to the next-generation PON and are offering the blazingly fast broadband products to consumers. South Korea is leading the pack and expects to have the 10 Gbps speed to about 50% of subscribers by the end of 2022.

In the US there are a handful of ISPs offering a 10 Gbps product, mostly for the publicity – but they stand ready to install the faster product. Notable is Fibrant in Salisbury, NC and EPB in Chattanooga. EPB which was also among the first to offer a 1 Gbps residential product a few years ago.

I have a lot of clients who already offer 10 Gbps connections to large business and carrier customers to serve large businessesn like data centers and hospital complexes. However, except for the few pioneers, these larger bandwidth products are being delivered directly to a single customer using active Ethernet technology.

There are a few hurdles for offering speeds over a gigabit in the US. Perhaps foremost is that there are no off-the-shelf customer electronics that can handle speeds over a gigabit – the typical WiFi routers and computers work at slower speeds. The biggest hurdle for an ISP continues to be the cost of the electronics. Today the cost of next-generation PON equipment is high and will remain so until the volume of sales brings the per-unit prices down. The industry market research firm Ovum predicts that we’ll see wide-spread 10 Gbps consumer products starting in 2020 but not gaining traction until 2024.

In China, Huawei leads the pack. The company has a 10 Gbps PON system that is integrated with a 6 Gbps WiFi 6 router for the home. The system is an easy and overlay on top of the company’s traditional GPON network gear. In South Korea the largest ISP SK Broadband has worked with Nokia to develop a proprietary PON technology only used today inside of South Korea. Like Huawei, this overlays onto the existing GPON network. In Japan the 10 Gbps PON network is powered by Sumitomo, a technology only being sold in Japan. None of these technologies has made a dent in the US market, with Huawei currently banned due to security concerns.

In the US there are two technologies being trialed. AT&T is experimenting with XGS-PON technology. They plan to offer 2 Gbps broadband, upgradable to 10 Gbps in the new high-tech community of Walsh Ranch being built outside of Ft. Worth. AT&T is currently trialing the technology at several locations within its FTTP network that now covers over 12 million passings. Verizon is trying the NG-PON2 technology but is mostly planning to use this to power cell sites. It’s going to hard for any ISP to justify deployment of the new technologies until somebody buys enough units to pull down the cost.

Interestingly, Cable Labs is also working on a DOCSIS upgrade that will allow for faster speeds up to 10 Gbps. The problem most cable networks will have is in finding space of their network for the needed channels to support the faster speeds.

There are already vendors and labs exploring 25 Gbps and 50 Gbps PON. These products will likely be used for backhaul and transport at first. The Chinese vendors think the leap forward should be to 50 Mbps while other vendors are all considering a 25 Mbps upgrade path.

The real question that needs to be answered is if there is any market for 10 Gbps bandwidth outside the normally expected uses like cellular towers, data centers, and large business customers. This same question was asked when EPB at Chattanooga and LUS in Lafayette, Louisiana rolled out the earliest 1 Gbps residential bandwidth. Both companies were a bit surprised when they got a few instant takers for the faster products – in both markets from doctors that wanted to be able to analyze MRIs and other big files at home. There are likely a few customers who need speeds above 1 Gbps, with doctors again being good candidates. Just as broadband speeds have advanced, the medical imaging world has grown more sophisticated in the last decade and is creating huge data files. The ability to download these quickly offsite will be tempting to doctors.

I think we are finally on the verge of seeing data use cases that can eat up most of a gigabit of bandwidth in the residential environment. For example, uncompressed virtual and augmented reality can require masses of downloaded data in nearly real-time. As we start seeing use cases for gigabit speeds, the history of broadband has shown that the need for faster speeds is probably not far behind.

Shaking Up the FTTP Industry

Every once in a while I see something in the equipment market that surprises me. One of my clients recently got pricing for building a gigabit PON FTTP network from the Chinese company ZTE. The pricing is far under the market price for other brands of equipment, and it makes me wonder if this is not going to put downward price pressure on the rest of the industry.

There are two primary sets of electronics in a PON network – the OLT and ONTs. The OLT (Optical Line Terminal) is a centrally located piece of equipment that originates the laser signal headed towards customers. The OLT is basically a big bay of lasers that talk to customers. The ONT (Optical Network Terminal) is the device that sits at a customer location that has the matching laser that talks back to the OLT.

ZTE’s pricing is industry shaking. They have priced OLTs at almost a third of the price of their competition. They have been able to do this partially by improving the OLT cards that hold the lasers and each of their cards can connect to twice as many customers as other OLTs. This makes the OLT smaller and more energy efficient. But that alone cannot account for the discount and their pricing is obviously aimed at gaining a foothold in the US market.

The ONT pricing is even more striking. They offer a gigabit Ethernet-only indoor ONT for $45. That price is so low that it almost turns the ONT into a throw away item. This is a very plain ONT. It has one Ethernet port and does not have any way to connect to existing inside wiring for telephone or cable TV. It’s clearly meant to work with WiFi at the customer end to deliver all services. Their pricing is made even more affordable by the fact that they offer lower-than-normal industry prices for the software needed to activate and maintain in future years.

This pricing is going to lead companies to reexamine their planned network design. A lot of service providers still use traditional ONTs that contain multiple Ethernet ports and that also have ports for connection to both telephone copper and cable company coaxial wiring. But those ONTs are still relatively expensive and the most recent quotes I’ve seen put these between $200 and $220.

Using an Ethernet-only ONT means dumping the bandwidth into a WiFi router and using that for all services. That means having to use voice adapters to provide telephone service, similar to what’s been used by VoIP providers for years. But these days I have clients that are launching fiber networks without a voice product, and even if they want to support VoIP the adapters are relatively inexpensive. This network design also means delivering only IPTV if there is a cable product and this ONT could not be used with older analog-based cable headends.

ZTE is an interesting company. They are huge in China and are a $17 Billion company. They make a lot of cellphones, which is their primary product line. But they also make a lot of different kinds of telecom gear like this PON equipment. They claim they FTTP equipment is widely used in China and that they have more FTTP customers connected than most US-based vendors.

This blog is not a blanket endorsement of the company. They have a questionable past. They have been accused of bribery in making sales in Norway and the Philippines. They also were fined by the US Commerce Department for selling technology to North Korea and Iran, both under sanctions. And to the best of my knowledge they are just now trying to crack into the US market, which always is something to consider.

But this kind of drop in FTTP pricing has been needed. It is surprising that OLTs and ONTs from other manufacturers still basically cost the same as they did years ago. We generally expect that as electronics are mass produced that the prices will drop, but we have never seen this in a PON network. One can hope that this kind of pricing will shake up other manufacturers to sharpen their pencils. Larger fiber ISPs already get pricing cheaper than what I mentioned above on today’s equipment. But most of my clients are relatively small and they have little negotiating power with equipment vendors. I hope this shakes the industry a bit – something that’s needed if we want to deploy fiber everywhere.

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.



The Return of Active Ethernet

WDM_FORecently I have been seeing new fiber construction for residential service favoring Active Optical Networks (AON) over Passive Optical Networks (PON). This reverses a decade-long trend where PON had clearly won in the US market. The reemergence of AON has been sparked by Google and others who have pushed the industry to be able to offer gigabit connections to homes.

When fiber was first built to residential neighborhoods both technologies had some success in the market in the US. But once Verizon chose PON to build its FiOS network, other builders took advantage of the price reductions driven by Verizon’s large deployment and there were very few new active networks built. Around the world the choice of technology varies. Europe also has largely chosen PON technology due to a success there by Alcatel-Lucent. But South Korea went with active Ethernet due to the large number of apartment buildings in the network, where AON is a better solution.

AON technology has never disappeared in the US and it’s the technology of choice when building fiber networks to serve business districts and business parts. Metro Ethernet is one form of an AON technology. In fact, most fiber networks have a mix of technologies and many networks use PON to serve residences and small businesses but use active connections to serve large data customers like schools and large businesses.

There are pros and cons to both technologies when building in residential neighborhoods. But the two most distinctive characteristics are the way that bandwidth is delivered and the configuration of the physical fiber network. Active Ethernet requires a dedicated fiber for each customer. PON can put up to 32 customers onto a single fiber, although it’s generally some smaller number in actual field deployment. This means that the physical fiber bundles in the network have to be significantly larger in an AON deployment. This won’t make much of a difference when deploying in small towns or rural areas. But in a densely-packed urban area the extra fiber pairs required by AON can cause some concerns, particularly for fiber management where fiber connections are aggregated at headends and hubs.

Bandwidth is handled very differently with the two technologies. With Active Ethernet each customer gets whatever bandwidth the network provider supplies. Active networks routinely can deliver 1 gigabit to 10 gigabits. Larger connections are also possible but can get significantly costlier. A PON network shares bandwidth between customers. The mostly widely deployed PON technology in the country is GPON which delivers a gigabit path dedicated to delivering cable TV and a separate data Ethernet path of 2.4 gigabits to share among the customers on a given PON. That is sufficient bandwidth to give everybody a 100 Mbps connection, but it’s not enough bandwidth if you want to guarantee a gigabit connection. There is a new PON today that can deliver 10 gigabits to each PON, but many network operators still see that as inferior to direct gigabit connections when shooting for a gigabit delivery.

The other trade-off is cost and there are cases where each technology can cost less. The customer electronics generally cost more with PON. A PON network of any size requires placing huts in neighborhoods used to terminate the feeder fibers and electronics. But an active network has a greater cost for fiber since there are more fiber pairs in each bundle. But in many cases these two costs somewhat cancel out and we have seen small town deployments that price out almost identically under the two different technologies.

There was a time five years ago when anybody building a residential fiber network could not even consider active Ethernet. There were very few vendors active in the space that supported US markets. PON had won the US marketplace and when building a network once simply decided between the various PON vendors. But today it’s all up for grabs again and anybody building a new fiber network needs to give strong consideration to both technologies.