2004 Allied Telesyn, Inc.

Active vs. PON FTTx Technology Choices, 6/30/04, Rev A

www.alliedtelesyn.com PAGE 1 of 10
Technical Brief






Active vs. PON
FTTx Technology Choices


When it comes to FTTx deployment, many carriers mistakenly assume that PON is the
best or only game in town. This paper addresses some of the myths surrounding Active
Ethernet and PON technologies and explains why Active Ethernet networks are
becoming the preferred choice among many leading service providers.




Overview
Dispelling the Myths.






Two of the largest
FTTP initiatives in
North America have
chosen active
solutions, citing lower
CapEx and OpEx as
key drivers.


So which is the better
solution? Thats what
this white paper will
cover.

By now weve all heard of the Super RFP issued by the RBOCs in 2003
for their plans to deploy fiber to the premises (FTTP). Their decision to
deploy BPON, a Passive Optical Network architecture based on ATM
standards, has thrust PON into the spotlight and has given some people
the idea that PON is the only viable option for FTTP networks.

Meanwhile, two of the largest FTTP initiatives in North America,
SureWest Communications and UTOPIA, have both decided to deploy
Active Ethernet fiber solutions citing the lower CapEx (capital
expenditure) and OpEx (operating expenditure) of Active Ethernet as key
decision drivers.

So which is the better solution? The answer depends on many factors,
including legacy infrastructure, bandwidth requirements, and the services
to be offered.

This paper will explore some of the myths about PON and Active
networks and provide an in-depth look at why Active Ethernet is quietly
becoming the preferred choice among leading service providers
worldwide for their fiber deployments.

2004 Allied Telesyn, Inc.

Active vs. PON FTTx Technology Choices, 6/30/04, Rev A
www.alliedtelesyn.com PAGE 2 of 10
Architecture Overview
Passive Optical Networks {PON}




PON uses powered
equipment in the
central office and
customer premise. In
the outside plant, it
uses passive splitters
and couplers to divide
bandwidth among up
to 32 users over a
distance of 10-20km.



A Passive Optical Network (PON) consists of an optical line terminator (OLT)
located at the Central Office (CO) and a set of associated optical network
terminals (ONT) to terminate the fiber usually located at the customers
premise. Both of these devices require power. PON gets its name because
instead of using powered electronics in the outside plant, it instead uses passive
splitters and couplers to divide up the bandwidth among the end users typically
32 over a maximum distance of 10-20km. Because this is a shared network, it is
sometimes referred to as Point to Multipoint or P2MP.


Active Networks




Similar to PON, Active
networks use
powered, hardened
equipment in the field,
enabling them to
provide a dedicated
pipe to each
subscriber.


Active networks can
serve a virtually
unlimited number of
subscribers over an
80km distance.
An Active network looks very similar to a PON, however, there are three main
differences. First, instead of having passive, unmanageable splitters in the field, it
uses environmentally hardened Ethernet electronics to provide fiber access
aggregation. Second, instead of sharing bandwidth among multiple subscribers,
each end user is provided a dedicated pipe that provides full bi-directional
bandwidth. Because of its dedicated nature, this type of architecture is sometimes
referred to as Point to Point (P2P). The third architectural difference between PON
and Active is the distance limitation. In a PON network, the furthest subscriber must
be within 10-20km from the CO, depending on the total number of splits (more
splits = less distance). An Active network, on the other hand, has a distance
limitation of 80km, regardless of the number of subscribers being served. The
number of subscribers is limited only by the switches employed, and not by the
infrastructure itself, as in the case of PON.














Figure 1: PON Architecture
Figure 2: Active Architecture
//
//
//
//
//
//
//
//
ONT
OLT
Optical splitter
1x16 (1x2, 1x8)
1x32 (1x4, 1x8)
Usually 10 Usually 10- -20 km 20 km
//
//
//
//
//
//
//
//
//
CPE
Switch
Up to 70 km Up to 70 km Up to 10 km Up to 10 km
Single Fiber (EFM)
Powered Device
(Ethernet Switch)
2004 Allied Telesyn, Inc.

PON vs. Active FTTx Technology Choices, 6/30/04, Rev A
www.alliedtelesyn.com PAGE 3 of 10
Fiber Networking Myths














Years ago, Active
Ethernet required two
fibers, and did not
have options for
outside plant, but new
standards and
products have
removed those
concerns.


With the basics of these topologies understood, we can now explore the five most
common myths surrounding PON vs. Active networks:

1. PON Networks Make Better Use of Fiber
2. Active Electronics In the Field Are a Liability
3. PON Systems Dont Require Set Top Boxes for Video
4. PON Systems Provide Plenty of Bandwidth
5. PON Has Dominant Market Share Over Active.

Myth #1 - PON 8ystems Make Better Use of Fiber
The root of this misperception is one based in reality. However, it is no longer valid
because of two technological developments that have occurred in the past year. The first
of these developments is the completion of the IEEE 802.3ah Ethernet in the First Mile
(EFM) standard that defines, among other things, a method for delivering Ethernet over a
single strand of fiber. Before this standard emerged, Active Ethernet solutions required
two strands of fiber to every subscriber (one to send, the other to receive). Years ago,
when fiber was very expensive, one can understand what a costly proposition this was.

The second development has been the evolution of environmentally hardened Ethernet
devices that can be placed in the outside plant. Prior to the availability of this type of
gear, network operators would have to pull the fiber from every subscriber all the way
back to their CO or else rely on Controlled Environment Vaults (CEVs) or other types of
air conditioned/heated Remote Terminals (RTs).

The two of these developments, along with the fact that fiber costs have dropped to a
fraction of what they were just a few years ago, make the question of which network uses
less fiber virtually a non-issue.

Myth #2 - Active Electronics in the Field are a Liability
To assess where it makes most sense to place powered devices, one should understand
the different theories of outside plant design. These designs, along with their pros and
cons, are described below.

Traditional PON
The promise of PON has been that you can push a single strand of fiber far out into the
field and split it with a passive, unmanageable device close to the customer premises
(Figure 3). Unfortunately, this approach has a number of drawbacks. One of the biggest
disadvantages is that these splitters have no intelligence, and therefore cannot be
managed. You cannot communicate with them remotely, and with hundreds or thousands
of splitters scattered around in the field, driving to each one to check for problems when
a service outage occurs becomes a very slow and a very expensive proposition.

Another major disadvantage to PON is its inflexibility. If a 1x4 splitter is used to serve
four homes, hooking up a fifth customer requires pulling a new strand of fiber all the way
from the upstream splitter, or re-designing the network to accommodate a larger splitter
near the customer premises without violating the 32 split maximum allowed.
Unfortunately, changing any splitter in the network requires all downstream customers to
come offline while the work is done.
CO
Figure 3: Traditional PON
2004 Allied Telesyn, Inc.

PON vs. Active FTTx Technology Choices, 6/30/04, Rev A
www.alliedtelesyn.com PAGE 4 of 10



Traditional PONs 32-
split maximum can be
mitigated by under-
utilizing capacity, but
that can drive up per-
subscriber costs.





Passive Star PON
provides more
centralized
troubleshooting, but is
still limited by PONs
tree-based topologies.





Active Star networks
require power in the
outside plant;
however, those active
electronics do bring
intelligence and
management to the
access edge.


A logical alternative to alleviate this problem is to under-utilize the capacity in the outside
plant. In other words, instead of maxing out each PON port with 32 splits, only deploy 16
or 24 splits to allow room for growth. Important to remember, however, is that each PON
port in the OLT carries a very high price tag since it is intended to be amortized across
32 customers. By not fully loading up that PON port, you increase the per-subscriber
costs dramatically. The network operator, in this scenario, is forced to decide which is the
lesser of two evils low flexibility or inflated per-subscriber costs.

Finally, since PONs are shared networks, each subscriber becomes a homogonous
member of the PON port they are connected to. Each subscriber gets the same
bandwidth, each must receive software updates at the same time, and each must have
the same ONT at the customer prem. This introduces significant challenges when
businesses looking for higher bandwidth services are mixed in with these residential
subscribers, when updating a new load of code, or when migrating to new technology in
the future (eg. BPON to GPON).

Passive Star PON
A Passive Star architecture is designed to alleviate some of the flexibility challenges of a
traditional PON topology. Instead of pushing the splitters all the way out to the customer
premises location, they are pulled back and aggregated in a more centralized location,
typically housed in a cabinet. This design helps drive more efficiency and lightens the
burden of troubleshooting since the splitters are now more centralized.

But Passive Star is still subject to the inherent drawbacks of a PON network. One of
these is the lack of diverse paths through the network. PONs, by their nature, subscribe
to tree-based topologies. Even if the splitters are pulled back to an aggregation cabinet,
there is still only one physical path upstream, and that introduces a dangerous
dependency on that link. Because these splitters have no intelligence, there is no ability
to provide emergency fail over to a diverse path in the event of a link failure.

Another drawback is high first subscriber costs. As mentioned earlier, each PON port
carries a high price because it is expected to be divided by 32 subscribers. Therefore, to
activate that first subscriber, a significant CapEx investment must be made to provide
them service.


Active Star
An Active Star architecture has one arguable drawback from a deployment perspective,
and thats the requirement for power in the outside plant. However, Active electronics in
the field are nothing new. Telcos have been deploying DLC networks for decades that
have powered electronics in the field. As the types of services evolve to include
advanced, bandwidth intensive content like video, having intelligent devices at the edge
of a network actually becomes an extremely significant advantage for the following
reasons.

For video applications, intelligence at the edge of a network allows multicast streams to
be replicated for downstream delivery using IGMP. This means regardless of how many
people downstream of the switch are watching the
CO
Multiple
feeder fibers
WDM
Figure 4: Passive Star
2004 Allied Telesyn, Inc.

PON vs. Active FTTx Technology Choices, 6/30/04, Rev A
www.alliedtelesyn.com PAGE 5 of 10










While PON systems
do not require a set-
top box for analog
signals and mono
sound, todays digital
applications do
require a set-top box
when run over both
Active and PON
infrastructure.
same channel, only one stream is pulled down from the head end. That multicast stream
is then replicated in the Access switch and sent to the subscribers. This not only speeds
up channel change times, but it also makes more efficient use of your network backbone.

Another benefit to having Active electronics in the field is resiliency. By ringing these
nodes together and choosing a vendor that supports Ethernet Protection Switching Rings
(EPSR), true carrier-class resiliency is introduced which provides sub-50ms failover in
the event of a link failure. For a video customer, it means a split second of picture tiling in
the worst case, and for a voice customer, it means the call is not dropped.

Other advantages, of course, include full management and troubleshooting capabilities,
high flexibility for deploying different services to residential and business customers, and
low first subscriber costs. When striving for Five Nines reliability and maximum flexibility
in a FTTP network, one can quickly see how venerable a PON network is to link failure,
and how deploying Active electronics in the field actually becomes an asset instead of a
liability.

Myth #3 - PON 8ystems Don't Require 8et Top Boxes for Video
PON systems are able to support a somewhat complex method for deploying video
services that most closely resembles what MSOs (ie. cable TV providers) do today. This
method utilizes EDFAs (Erbium-Doped Fiber Amplifiers) to send an RF signal over a
separate wavelength on the fiber to deliver a signal to the customer prem. This is
sometimes referred to as delivering video out of band since it is outside of the IP data
stream.


If this signal contains analog video when it reaches the customer premise, it can be
delivered straight to the television without the need for a set top box just like the basic
service many people receive from cable TV providers today. The experience is exactly
the same the same video quality and the same mono sound.

If the signal contains digital video when it reaches the customer premises, however, a
digital set top box must be introduced again just as in a digital cable service offered
today by the MSOs. This set top box descrambles the digital video signal and delivers it
to the TV.

Where it starts to get more complex is when advanced, interactive services are
introduced like video on demand (VoD). Since an RF signal is a one-way
CO
Single
Fiber
{EFM)
Redundant
10GbE
Ring
Subtended
Node
Figure 5: Active Star
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wf vOD
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Switched video
EDFA EDFA EDFA
RF
Adaptor
Figure 6: Video Deployment Options
2004 Allied Telesyn, Inc.

PON vs. Active FTTx Technology Choices, 6/30/04, Rev A
www.alliedtelesyn.com PAGE 6 of 10
When providing on-
demand services,
PON systems must
eventually use IP to
communicate with the
Head End and
therefore require
adapters to convert
the RF signal.








Active Ethernet
systems use IP from
end to end, using an
IP set top box to
convert the signals.





















Depending on the
type of PON
deployed,
downstream
bandwidth can range
from 19Mbps to
38Mpbs. Under-
utilized splits offer
more bandwidth, but
speeds become
steadily slower as
more subscribers join
the network.
communication, the IP stream must be utilized to send commands up to the head end. In
order to do this, an RF adaptor must be added at the customer premises to demodulate
the upstream set top box communications and translate them into IP packets. Once
converted to IP, they are sent up through the IP path (or in-band) to the head end to
make the specified request. The requested content is then sent back down over the RF
path (out of band) using DWDM to that specific subscriber location.

Obviously, this requires a good bit of effort to provide a service that many would consider
to be the same as what cable TV operators are already doing today. As with any me too
service, this approach leaves very little opportunity to differentiate based on anything
other than price.

The alternative, and what many consider to be the best way of delivering advanced video
services, is using IP to deliver the content. This is sometimes called IP Video or Switched
Digital Video. In this solution, instead of having a traditional digital set top box, an IP set
top box is used to receive the IP packets, decode them, and provide audio and video
output to the TV. The experience is a powerful, all-digital experience with full Dolby 5.1
sound, crisp, high quality video, and interactivity unmatched by any other service
available today. Think of the interactive power of the Internet combined with high quality
broadcast TV. The result is strong differentiation that allows service providers to compete
on things other than just price. While IP Set Top Boxes carry a slightly higher price tag
today than traditional digital set top boxes, when you add in the cost of the RF adaptor
required at each customer premises, the CapEx costs for both solutions are quite
comparable.

From the network perspective, the most compelling advantage for deploying IP video is
having a fully converged IP network to manage and maintain. IP has long been the
protocol-of-choice for delivering data services, and in recent years we have seen the
rapid emergence of Voice over IP (VoIP) as the preferred method for delivering voice
services as well. Using IP for video as well allows a network operator to use the same
infrastructure for all three services and realize significant CapEx and OpEx savings by
standardizing on one network infrastructure instead of two as is required in an RF video
deployment.

Myth #4 - PON 8ystems Provide Plenty of Bandwidth
To determine how much bandwidth is enough, a service provider must evaluate what
services they intend to offer over the life of the network. Since the capacity and longevity
of a fiber infrastructure is virtually limitless, one must look out as far as possible to ensure
the equipment that is deployed will handle the bandwidth needs for the foreseeable
future.

0 00 0
20 20 20 20
40 40 40 40
60 60 60 60
80 80 80 80
100 100 100 100
A/BPON A/BPON A/BPON A/BPON EPON EPON EPON EPON GPON GPON GPON GPON Active Active Active Active
Up Up Up Up
Down Down Down Down
Mbps
622MbpsJ
32 splits =
19Mbps
1GbpsJ
32 splits =
30Mbps
1.2GbpsJ
32 splits =
3SMbps 100Mbps
Figure 7: Bandwidth Comparison by Technology
2004 Allied Telesyn, Inc.

PON vs. Active FTTx Technology Choices, 6/30/04, Rev A
www.alliedtelesyn.com PAGE 7 of 10


Active Ethernet
provides dedicated
bandwidth to each
subscriber, regardless
of network population.
Speeds are most
commonly 100Mbps
to 1Gbps.



















As illustrated in Figure 7, different technologies will offer different levels of bandwidth in
the upstream and downstream directions. APON and BPON, for example, deliver
622Mbps in the downstream direction, so assuming it is split among 32 subscribers, it
provides 19Mbps to each customer. In the upstream direction, it provides 155Mbps split
32 ways, resulting in under 5Mbps. EPON is a technology that provides 1Gbps in both
the downstream and upstream directions, providing 30Mbps of bi-directional bandwidth
to each subscriber. Finally, GPON, the newest standard for PON technology, provides
1.2Gbps in the downstream direction resulting in 38Mbps per subscriber assuming 32
splits, and 622Mbps in the upstream direction allowing 19Mbps per subscriber.

Active Ethernet, in comparison, provides dedicated bandwidth to each subscriber, which
means there is no sharing of network traffic. Speeds most commonly found in the
marketplace today are 100Mbps bi-directional to residential customers and even 1Gbps
to business customers.

When you consider that Active Ethernet solutions, on average, cost less to deploy and
maintain than comparable PON systems, the opportunity to secure more bandwidth for
less investment is certainly a compelling proposition. But how much bandwidth is
enough? All of these speeds are compelling by todays DSL and Cable broadband
standards, but deploying advanced IP video and other next generation services takes
things to a completely new level.

Consider whats being offered today at SureWest Communications in Sacramento, CA.
Over their Active Ethernet FTTP network, they offer residential customers a service
bundle of 200 digital channels with interactive TV services such as video on demand,
voice service with a full package of features such as call waiting and various messaging
options, and 10Mbps of high-speed internet for one low monthly price. To deliver these
types of services, a network would require at least 22Mbps of bandwidth assuming 3
TVs per house at 4Mbps per video stream plus the 10Mbps for high speed Internet.
Based on the bandwidth capabilities of PON-based architectures, it is clear this network
would already be beyond the capabilities of BPON and pushing up against the
capabilities of even the newest PON standard, GPON.


Figure 8: FTTP Residential Services Today vs. Tomorrow
ActIve
FTTx
100
50
0
A0SL2
|bps
25
75
E/CPDN
A0SL2+
A/8PDN
22Mbps
ActIve
FTTx
100
50
0
A0SL2
|bps
25
75
E/CPDN
A0SL2+
A/8PDN
22Mbps
ActIve
FTTx
100
50
0
A0SL2
|bps
25
75
E/CPDN
A0SL2+
A/8PDN

ActIve
FTTx
100
50
0
A0SL2
|bps
25
75
E/CPDN
A0SL2+
A/8PDN

10Mbps High Speed Internet:

60Mbps
HDTV (IP):
20Mbps per stream x 3 TVs:
10Mbps High Speed Internet:
60Mbps
HDTV (IP):
20Mbps per stream x 3 TVs:
10Mbps High Speed Internet:
12Mbps
Broadcast TV (IP):
4Mbps per stream x 3 TVs:
10Mbps High Speed Internet:
12Mbps
Broadcast TV (IP):
4Mbps per stream x 3 TVs:
2004 Allied Telesyn, Inc.

PON vs. Active FTTx Technology Choices, 6/30/04, Rev A
www.alliedtelesyn.com PAGE 8 of 10
PON networks will be
severely challenged
by emerging high-
bandwidth
applications such as
HDTV.







PON and Active
Ethernet technologies
currently split the
FTTP market nearly
equally

Now if we look at what is just over the horizon HDTV we can quickly see how a PON
network will not scale to meet the requirements. This is before we even begin to consider
how other applications will take off such as distance learning, video conferencing, smart
home services, personal video recorders (eg. TiVo), etc. Each of these will carry their
own bandwidth requirements that must be planned for.

Myth #5: PON Has Dominant Market 8hare vs. Active
According to Render, Vanderslice & Associates, a noted research firm focused
exclusively on the FTTP market, the number of actual deployments of FTTP networks
shows a nearly equal split between PON and Active technologies at 48% and 46%
respectively (Figure 9). When the RBOCs proclaimed they would deploy BPON in the
Super RFP, many believed that PON would become the dominant technology choice
for all FTTP deployments. When you stop to consider that their legacy infrastructure is
ATM-based and that video is not a priority for them, however, it becomes clear that while
it makes perfect sense for their needs, it most definitely will not be the best choice for all
deployments.

For network operators interested in offering video as a key differentiator and are not
locked into a legacy ATM infrastructure, on the other hand, most are realizing the value
of deploying a fully converged IP network that is based on the most ubiquitous
technology in the world Ethernet.






Homes Connected as of
October 2003
EPON
3%
Hybrid
Active/
PON
3%
Active
46%
APON/
BPON
48%
Source: Render, Vanderslice & Associates.


Figure 9: Deployments by Technology

2004 Allied Telesyn, Inc.

Active vs. PON FTTx Technology Choices, 6/30/04, Rev A
www.alliedtelesyn.com PAGE 9 of 10

8ummary
Making the Active vs. PON Call
In the end, each network operator will make their decision of which
technology to deploy based on their own unique circumstances. The
purpose of this paper is not to suggest that one technology is the best for
every situation. On the contrary, the intention of this paper is simply to make
network operators aware that there is an attractive alternative to PON-based
FTTP architectures that leverages the benefits of IP and Ethernet to deliver
services that will provide compelling differentiation based on the unique
experience it delivers to customers and not just on price.

To learn more about Active Ethernet FTTP solutions and how Allied Telesyn
is helping some of the worlds largest FTTP network operators realize the
benefits of carrier grade IP/Ethernet, visit www.alliedtelesyn.com or call
1-800-424-6596.

www.alliedtelesyn.com


2004 Allied Telesyn, Inc.

Active vs. PON FTTx Technology Choices, 6/30/04, Rev A
www.alliedtelesyn.com PAGE 10 of 10

Company Overview
Allied Telesyn: t's Our Network, Too.


A global company
with nearly two
decades of
continuous profitability




Our tagline: Its Our
Network, Too, is a
testament to our
investment in our
customers bottom
line success






Allied Telesyn focuses
entirely on end-to-
end, purpose-built
Ethernet applications



A world-class
engineering and
support organization
spanning five
continents and more
than 30 countries



The ideal choice for
cost- conscious IT
professionals who are
looking for high-
quality, feature-rich
network solutions at a
lower price.

Founded in 1987 with the goal of producing feature-rich, reliable, standards-
based networking products, Allied Telesyn has a proven track record in
bridging the gap left by other Ethernet networking manufacturers, whose
solutions are often limited in scope or cost-prohibitive.
By taking cues directly from our customers and leveraging our global
manufacturing competencies, weve evolved a market-focused approach to
system development that is geared entirely to applications, rather than
individual components. And by concentrating on battle-tested, end-to-end
solutions for vertical market applications we avoid the scattershot, company-
focused approach common in the industry. Our tagline: Its Our Network,
Too is a testament to our high-level of accountability and to our investment
in our customers bottom line success.
Allied Telesyn focuses entirely on end-to-end, purpose-built Ethernet and IP
applications; with a complete line of networking products that includes Layer
2 switches, Layer 3 switches, carrier class fiber/copper Multiservice Access
Platforms, and residential gateways. No other networking vendor can match
Allied Telesyns breadth and depth of Ethernet productswe are the leading
manufacturer of media converters, unmanaged Fast Ethernet switches and
hubs, fiber optic network adapters and other feature-rich interconnectivity
products, worldwide. Additionally, Allied Telesyn has developed a world
class systems engineering and support organization that ensures networks
are designed and implemented to handle the stress of providing voice, video
and data services.
With engineering, manufacturing, sales, and distribution divisions
strategically located throughout the Americas, Europe, Asia and Japan,
Allied Telesyn is able to deploy solutions anywhere in the world, quickly and
efficiently. And by rigorously testing products in design and support centers
and leveraging our design and manufacturing competencies, Allied Telesyn
is able to offer reliable solutions for the access edge. This ideal combination
helps our customers keep costs low, speed network deployment and
maximize network uptime.
Our customer-driven approachcombined with a pragmatic, value-based
pricing scheme and a superlative service organizationhas made Allied
Telesyn a global networking leader, with more than 17 years of continuous
profitability and products deployed in more than 50,000 companies in 30
countries and five continents. Allied Telesyn: the ideal choice for cost-
conscious IT professionals who are looking for high-quality, feature-rich
network solutions at a lower price.

www.alliedtelesyn.com