1 Carrier Ethernet Access: Extending Ethernet into the First Mile July 2007

2 Carrier Ethernet Access Standards and Migration Carrier Ethernet Access Expansion –Expanding Ethernet to Copper, PDH, HFC Cable and Wireless Access Networks Applications for Ethernet Access Advantages of Extending Metro Ethernet connections with Ethernet in the First Mile Recent Projects and Developments

3 The Access Challenge There are no bandwidth constraints in the LAN –100 x increase in bandwidth There are very limited bandwidth bottlenecks in the WAN/Internet core –1000 x increase in bandwidth The challenge still remains in the metro and access –16 x increase in bandwidth Long-haul ISP Point of Presence Ethernet MAN ASP, Content Distribution Site Large Enterprise Site Small Enterprise Site L2 VLAN Internet Access Virtual Co-location Optical WAN Transport

4 Drivers for Ethernet Access Very large unaddressed market –Fiber is only available to 11.7% of businesses – growing at a very slow rate –$8.8B/year in service revenues Technology is mature –Standards are ratified with large global deployments Ethernet is the choice –No future protocols on the horizon Business case works! –Payback in months, with ~80% Carrier GM –True for Incumbent Carrier, Independent Carrier, 2 nd Operator & CLEC Footprint Vertical Systems Group

5 Increasing Bandwidth for New Services Providers are meeting subscriber demand for more bandwidth with Carrier Ethernet Services –MEF E-Line Services provide attractive leased line upgrade Less OPEX means more margin per line –Ethernet Backhaul enables next generation applications and services 3G Cellular DVBH video phones Vertical Systems Group 2006

6 Carrier Ethernet Access: Ubiquitous Carrier Ethernet Enables widest availability for business Carrier Ethernet Services that extends beyond 1-10GBE Enterprise networks delivered via copper, fiber, coax and wireless technologies Creates an end-to-end Ethernet service both business and residential users Improved QoS for next generation IPTV, VoIP and data for residential users Creates standardized service opportunities world-wide for any type of subscriber Enables Ethernet services to be delivered across 100% of a carrier’s combined, business, information, and entertainment service portfolio

7 Copper Legacy to Leading Edge Migrating from TDM to Ethernet Access Carrier Ethernet Network E-Line and ELAN business services Ethernet LAN Managed Switch/Router GB Man/WAN Router IP Network Managed Switch/Router GB Man/WAN Router Copper Local Loop RoutersCSU/DSUsRouters CSU/DSUs Copper Local Loop Ethernet LAN Traditional Telco Network Voice Oriented Connectivity ATM Switch MUX Telco Central Office ATMSonet/SDH ATM

8 Most efficient access for Ethernet IP Ethernet AAL5 ATM Ethernet PHY ATM PPP xDSL, PPP, GFP xDSL, PPP, GFP SONET/ SDH SONET/ SDH ATM AAL5 PPP IP ATM, Frame relay, etc. PHY Cat5CopperFiber Ethernet PHY Ethernet xDSL, PPP, GFP xDSL, PPP, GFP PHY Ethernet IP ATM, FR, etc. PHY Cat5CopperFiber Ethernet IP Ethernet minimizes protocol translations

9 Wireless Backhaul Carrier Ethernet Scope and Expansion Voice gateway Voice/Video Telephony HD TV TVoD, VoD Gaming, Business Backup, ERP E-Line and E-LAN service Residential Triple-Play FTTx and DSLAM, Cable Modem Broadband mobile data/video Video Source Video Source Bringing vastly extended scalability for business and residential users Business Broadband Small/Medium Business Carrier Ethernet Network

10 Carrier Ethernet Access Standards 10GbE 10BASE-T (Cu Cat5) Maximum Bandwidth (Symmetric) 100m500m750m2000m2700m5000m10km20km 2Mbps 10Mbps 100Mbps 1Gbps 10Gbps 100BASE-T (Cu Cat 5) 1000BASE-T (MMF) 1000BASE-LX (SMF) Existing IEEE standards Existing IEEE standards Ethernet over Copper Ethernet over Copper Minimum Reach Ethernet over Copper EoPDH provides up to 12/16Mbps over any T1/E1 distance and 45/32Mbps over any T3/E3 distance VDSL2 can provide 100 Mbps (per pair) in short distances 10 Mbps (per pair) in medium distances and 2 Mbps in long distances 100Base-L/BX10 (Single Mode Fiber) 1000Base B/L/PX Base- PX20 EoPDH RFC 3518 or G /16Mbps over T1/E1 EoPDH 45/32Mbps over T3/E3 16Mbps 45Mbps Existing IETF and ITU-T standardsExisting standards

11 Ethernet Access over Copper ITU standard for Ethernet in the first mile include multiple PHY options to provide a ubiquitous service footprint Hybrid copper and fiber deployments provide a seamless end- to-end Ethernet access for Ethernet Metro core networks –Fiber to the node, copper from the curb Internet Metro Core EFM Access Triple play Extended Range

12 Ethernet over PDH

13 What is Ethernet over PDH (EoPDH) ? PDH (Plesiochronous Digital Hierarchy) –Term to collectively refer to T1/E1 and T3/E3 circuits EoPDH enables Ethernet and IP services to be delivered over PDH access networks Two ‘competing’ technologies to deliver EoPDH –MLPPP/BCP over PDH (RFC1990 / RFC3518) for encapsulation, bonding and bridging –GFP over PDH (G.8040) GFP (G.7040) for encapsulation, VCAT (G.7041) and LCAS (G.7042) for bonding EoPDH Equipment support –MLPPP/BCP supported on essentially all routers and new service edge aggregation devices –GFP supported on new types of devices Service Bandwidth Options –Up to 12Mbps (8 bonded T1s) –Up to 16Mbps (8 bonded E1s) –Up to 32Mbps (1 E3) –Up to 45Mbps (1 T3)

14 Why Ethernet over PDH ? Enables multiple revenue generating services over a single Ethernet UNI –E.g., Internet access, managed VoIP, Ethernet Access to managed IP VPN, E-Line and E-LAN L2 VPNs Works over existing copper PDH access networks with no speed or distance limitations Provides Ethernet UNI handoff to subscriber Utilizes T1s, E1s, T3 or E3 –T1s are the most widely deployed access network technology for businesses data networking in North America Enables next generation Radio Access Networks from cell sites to interface to existing microwave radio equipment and PDH backhaul circuits Addresses underserved sub-10Mbps Business Ethernet services market only addressable via copper access networks –$5B cumulative service revenue between * –Less than 14% of U.S. commercial buildings have access to fiber* Fits within service provider’s existing network infrastructure –Service providers have offered T1 Internet Access for businesses for years Still a significantly growing business –EoPDH requires no significant network operation or infrastructure changes * Vertical Systems Group

15 How does it work? Ethernet Frames enter EoPDH Customer Located Equipment (CLE) and encapsulated –Into MLPPP or GFP for transport over PDH network LEC/PTT network multiplexes T1s/E1s into channelized DS3 or E3 circuits Channelized DS3/E3 circuits terminated on EoPDH edge aggregation device –T1s/E1s extracted from channelized DS3/E3 circuits –MLPPP or GFP terminated and Ethernet Frame Extracted Each subscribers’ Ethernet frames mapped to S-VLANs (EVC) –To preserve subscriber’s C-VLAN IDs and 802.1p CoS S-VLAN-tagged Ethernet frame (EVC) to Ethernet Transport Network –Providing transport for EVPL, E-LAN or access to IP services, e.g., Internet access Bonded T1s/E1s LEC/PTT Ethernet Frame IP ETH MLPPP or GFP Channelized DS3/E3 EoPDHCLE ETH EoPDHAggregator Ethernet Transport Network Enterprise or Cell Site Subscriber Ethernet Frame in S-VLAN / EVC Enables multiple revenue generating services over same PDH infrastructure IP ETH IP ETH MLPPP or GFP

16 How is EoPDH (T1 example) deployed? Service provider places CLE router on customer premise –Connects to network via 1 or more T1s Service provider wholesales DS1s to reach customer –ILEC multiplexes DS1 circuits to channelized DS3 Service provider sets up PPP/MLPPP (or GFP) sessions –between CLE device and Service Edge Aggregator Service Edge Aggregator maps subscribers into EVCs (S-VLANs) –To handoff to Ethernet transport network ILEC Network NxT1 chDS3 Provider PoP/CO EoPDH CLE, e.g., router Ethernet Transport Network T1 PPP or GFP session MLPPP or GFP session EoPDH Service Edge Aggregator

17 Ethernet over Active Fiber

18 Ethernet Access over Active Fiber Distance -Up to 140 Km with No Bandwidth Loss Highest Bandwidth Capacity -P2P: 100 Mbps, 1 Gigabit, 10 Gigabit -WDM: 100s of Gigabits Security -Physically Secure Medium with no EMF emission; nearly impossible to tap lines Scalability -EVC / E-Line / E-LAN using Q-in-Q VLAN -High Capacity enables Rate Limiting tiered services Reliability - Protection with Redundant Links & Resilient Rings - OAM Performance Monitoring & Fault Notification Secure Service Management ah OAM IP-less Management & Provisioning -NIDs provide Securely Managed Demarcation Central Office WDM Ring Media Conversion NID Demarcation A/D Mux Multi-Customer NID Demarcation

19 Ethernet over PON

20 Ethernet Access over Passive Optical Networks (GPON) Technology that offers: –Passive splitters used to share a single fiber among subscribers –Bandwidth per subscriber to 2.5Gb/s downstream / 1.25Gb/s upstream –No electronics in outside plant Wavelength Splitter/Combiner Optical Line Terminal (OLT) 1490nm 1310nm Optical Network Terminal (ONT) Subscribers CPE 10/100/1000

21 Ethernet over HFC Cable

22 Carrier Ethernet Architecture for Cable Operators HeadendHub EQAM CMTS Optical Metro Ring Network Video Server D2A Ad Insertion E-LAN E-Line Business Services over Fiber (GigE) Voice gateway Voice/Video Telephony Digital TV, VOD, Interactive TV, Gaming Managed Business Applications Internet Access Analog TV Feeds A2D Hub UNI CE E-NNI Another MSO or carrier Network EoDOCSIS (future) EoT1/DS3 PON Greenfield Residential & Business Services EoSONET/SDH, EoPDH CE UNI WDM UNI Home Run Fiber EoCoax EoHFC Switched Fiber Business Park Business Services Node E-Line E-LAN CE UNI CE Wireless Plant Extension Leased T1/DS3 CE UNI

23 FTTC 100 Mbps coax fiber Switched Ethernet Over Coax 1-10 Gbps 1 Gbps Metro Ring FTTP Up to 1Gbps PWE Coax Trunk Cable Amplifier Cable HFC Node Carrier Ethernet over HFC Cable Plant PON PWE 1-10 Gbps WDM

24 Ethernet over Wireless

25 Ethernet Access over Wireless Optical Mesh Service Provider Requirements –Fast service activation –Profitable / high margin –Minimal capex –High bandwidth –Reliable service –Scalable bandwidth –No licensing or permits –No interference The Wireless Optical Mesh An Alternative to Lateral Fiber Expansion –Service provider can lower the cost of reaching the customer from 95% –Turn the network up in days vs. months –Achieve an ROI of just a few months Fiber 250m Lateral Time to add six more fiber laterals : 2-3 months Time to install 7 optical mesh nodes: 2 days

26 Ethernet Access Applications

27 Ethernet Access Applications Remote DSLAM Commercial Access EPL, EVPL E-LAN Backhaul Ethernet Access Applications Business Metro Ethernet extension –E-Line –E-LAN Backhaul for cellular and remote video traffic ETTN – Ethernet to the node enabling next generation residential broadband

28 Business Ethernet Access Project Business Need –Multi-site bank needs to connect branch office locations and disparate networks, recent bank merger created disparate networks –Needed to allow inter-network connectivity –Needed to implement and support a new e-banking application Network Solution –E-Access to VPN, EVPL –VLANs allowed separation Customer Benefit –Migrate to single network without major disruption –Supported E-Banking to improve core business 10M 100M Branch A Branch B Branch C Branch D Branch E Branch F Bank Headquarters and Data Center E Banking Metro Ethernet Network Metro Ethernet Network IP-VPN

29 Municipal Wireless Ethernet Access Business Need –Internet access and mobility for businesses, homes and government Network Solution –Metro-scale wireless Ethernet mesh access network Customer Benefit –100% Ethernet coverage, net access for enterprise and residence in city limit –Instantaneous data/voice support and 100% mobility in city for Gov’t, police, fireman, emergency personnel

30 Central Office Ethernet Switch Central Office Ethernet Switch Remote Office / Outdoor Cabinet Residential Customer Remote IP DSLAM Ethernet Ethernet Backhaul IP DSLAM and 3G/3.5G Base-stations Backhaul Ethernet Backhaul Cellular Base Station

31 Ethernet Access over Point-to-Point Microwave Links Wireless Carrier Class Ethernet –Very high bandwidth –Carrier class service over licensed bands. ( Interference free) –Dynamic bandwidth allocation with adaptive modulation standards (ETSI EN ) Point-to-Point microwave provides over 50% of connections to the Wireless Base Stations Worldwide. Adaptive Modulation Backhaul Wireless Carrier Ethernet Transport 400 Mbps Ring 100 Mbps Ring

32 The Advantages of Ethernet Access for Metro Extension E-Line and E-LAN service Broadband Wireless Wireless data/video Mobile Computing Small/Medium Business Fiber, Copper Copper, Fiber, Coax E-Line and E-LAN service E-Line and E-LAN service Business Broadband Residential Triple-Play FTTx, Cable Modem and DSLAM Backhaul Fiber Carrier Ethernet

33 The Ethernet Advantage Ethernet provides the bandwidth required to support next generation applications and services Ethernet Access completes the connection –End to end Ethernet provides the most efficient, lowest cost access method for extending Ethernet Metro networks Broad set of media and topologies supported by the standards while keeping consistent service attributes –ITU standards – Copper, Fiber –Hybrid Fiber Coax and Wireless Adherence to standards ensure consistent delivery of Ethernet access services

34 MEF Certifications Program: Access Technologies The MEF Certification Program will address access technologies to ensure conformance with Carrier Ethernet attributes The initial phase will address the conformance to ITU standards in delivering Ethernet services via copper, fiber and EPON access The initial phase also includes wireless Ethernet mesh access certification testing, based on forthcoming IEEE T, ensuring total coverage and mobility of Ethernet services Liaison with Cable Labs looking towards aligning Ethernet over HFC work with MEF specifications

35 Certification Leads to Interoperability Lets vendors cooperate to build complementary “end-to-end” solutions –Metro Core, Aggregation and Access Edge offerings –Providers have their own supplier ecosystem in place and aren’t looking for a whole new solution Interoperability among vendors leads to more favorable market conditions –Interoperability provides a wealth of choices –Lowers the barrier of entry to new markets or applications by reducing the attraction of proprietary architectures

36 Accelerating Worldwide Adoption of Carrier Ethernet Networks and Services