Local Versus Network

Local versus Network
Power for Cable

Telephony
White Paper #80
Revision 0
Executive Summary
The customer premises network interfaces for cable-based telephony services require
continuous power. In many cases the existing cable network is not configured to supply
the needed power. The choices are to provide the power by upgrading the network power
system, or to provide local power at each site. This paper describes the features and
benefits of these alternatives and summarizes the factors that guide the selection between
network and local power.
2006 American Power Conversion. All rights reserved. No part of this publication may be used, reproduced, photocopied, transmitted, or 2
stored in any retrieval system of any nature, without the written permission of the copyright owner. www.apc.com Rev 2006-0
Overview
As market demand for inexpensive, reliable telephony services heats up nationwide, Cable Multiple System
Operators (MSOs) are looking into offering telephony through Hybrid Fiber Coaxial (HFC) networks using
Voice over IP (VoIP) and circuit-switched technologies. Many MSOs are conducting trials, some have
deployed services on a neighborhood basis as they explore options, still others are conducting full roll-outs.
Many of those who have jumped into the fray are reporting higher than expected demand – as much as 10%
more in some cases – for Internet, data, digital video and telephony services. The stakes and rewards are
immense. Market research predicts that the worldwide retail VoIP market will explode: up from 20.6 billion
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minutes in 2001 to 745.8 billion in 2007.
As MSOs scramble to find the right mix of power sources at the right cost, they face many challenges in
deployment and marketing. The challenge is to provide a primary line telephone network comparable to the
incumbent telephone provider’s network.
To successfully offer telephony services driven by an always-on mentality in a competitive market, it is

necessary to provide high reliability and availability, unaffected by AC power outages. The biggest problem
with telephony is that providers don’t know what the load will be at any given time. In addition, if providing
primary service, MSOs must provide uninterrupted 911 emergency service, which requires highly reliable
powering backup.
Yet to be competitive, the MSOs must implement new powering requirements with low capital cost, low
operating costs, and ease of deployment. The powering solution needs to allow for future incremental
growth but must also be able to handle immediate demand. It is desirable to avoid high “front end loading”
of capital costs when the initial revenue stream is in early development stages.
To accomplish all this, the power solution chosen would reach optimal tradeoffs between energy storage
elements (batteries and generators), power supplies, and power distribution (coax cable, power passing
taps, power passing drops). Tradeoffs include the costs, location, deployment logistics, customer
satisfaction, maintenance, energy efficiency, etc. for these elements. The bottom line is that telephony
demands a diligent, proactive management and preventive maintenance strategy.
MSOs in this arena have three options, says Paul Brooks of Time Warner Communications.
1. No power backup, which enables them to provide only secondary service with no guarantee in
the event of power outage leaving them open to Local Exchange Carriers criticism.
2. Local power backup of the Customer Premise Equipment (CPE).
3. Network power backup of the CPE from the node.
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“IP Telephony Market Forecast and Analysis, 2002-2007”, IDC, January 2002
This paper looks at two power architectures (local versus network), and compares the pros and cons of each
to assist multi-service networks to make optimal power decisions and reach the ultimate goal of keeping
customers connected 24x7. Input was received from several MSOs who have entered, or who are planning
to enter, the market: AT&T Broadband, Charter Communications, Time Warner Cable, and Videotron.
Introduction
Local Power
This architecture reuses existing infrastructure of pole-mounted UPSs, adding local customer premise UPSs
to power the CPE, or Network Interface Units (NIU), for telephony. This approach would make maximum
use of existing typical powering systems and components as well as provide small incremental capital costs
during early and ongoing phases with low to moderate telephony penetration. This option is low cost and
faster to market, yet brings challenges in battery replacement.
Centralized Network Power

This architecture provides higher power capability along with higher power distribution capacity by
centralizing the UPSs. Centralization allows for fixed, rather than portable, generators to be employed, and
for upgrading to very high penetration levels with minimal additional costs. Proponents, such as Cameron
Gough of AT&T Broadband, feel network power provides greater average availability and indefinite run time
through natural gas powered generators, and more closely resembles the existing telephone system.
However, it has large initial costs which may be unwarranted at moderate levels of market penetration. The
overall drivers from a network design standpoint are speed, access, bundled services, and mostly, reliability.
Power Outage Statistics

Before we analyze what type of power backup structure may best serve the MSO telephony market, it may
be helpful to look at a few power outage facts. The majority of power-induced customer-perceived problems
are with short duration dropouts, due to their relative frequency. Both local and network power will eliminate
this issue. The only potential difference is with regard to performance during (less frequent) long duration
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outages. We have consolidated the results from published power quality papers into these findings:
• Long-duration outages (those that exceed 8 hours) are very infrequent and tend to be
concentrated in rural and/or disaster-prone areas.
• A typical site will experience an outage exceeding 8 hours only every 7.7 years on
average.
• In fact, only about .044% of all disturbance events are longer than 4 hours.
2
Potential Impact of Commercial Power Quality on Fiber-in-the-Loop Service Availability, 1993 NFOEC (National
Fiber Optics Engineering Conference, and An Assessment of Commercial AC Power Quality: A Fiber-in the-Loop
Perspective, 1994 Intelec (International Telecommunications Energy Conference)
Given this data, we can conclude that a site’s unavailability is not substantially impacted by whether the
battery backup is 4, 8 or 12 hours. In addition, says Pragash Pillai of Charter Communications, “most
customers have cell phones that they would use as backup in the event of long duration outages.”
Service Models
Providers of telephony must evaluate system costs and reliability against the “service model” they wish to
provide to customers in order to determine availability goals. There are two approaches to defining these:
Worst-Case Circumstance Performance

The service provider targets specific levels of performance in specified “worst-case” circumstances. In the
case of power outages, these typically are scenarios of widespread (system-wide) outages due to a major
loss of generation/transmission capability by the electrical utility, and long-duration outages lasting much
longer than a few hours (typically indicative of a disaster causing major damage to the AC transmission or
distribution system). In these cases of natural disaster and weather-related outages, if power is out, it is
likely that cable lines are down as well.
Statistically Defined Performance

The service provider targets a statistical level of availability for each customer, based on real-world
probabilities and historical statistical data for power outage events. In this case, providers located in areas
not prone to natural disasters, widespread, or long-duration generation/transmission outages may be able to
more cost-effectively deliver performance quite acceptable to the customers, and practically
indistinguishable from the worst-case” performance model. It is generally accepted, regardless of statistical
evidence in a given locality, that a minimum of 8 hours backup time for telephony is required for market
acceptability in North America, says AT&T’s Gough.
Pros and Cons
This table summarizes the pros and cons of Network versus Local Powering that are detailed in the following
pages.
Issue Local Power Network Power

Equipment + Off the shelf equipment at low cost -Uses complex, new technology
Availability
Time to market +Short, readily deployable. -Longer upfront time to build or upgrade
infrastructure, may lose market share to DSL.
Scalability Issues +Infinitely scalable, allowing for cash flow -Impossible to scale powering upgrade to
based capital investments. As costs grow, telephony penetration rate. May force over-
so does subscriber base. design, likely to spend more than necessary
due to worst or best case scenario.
-Difficult to design consistent run time. Will
vary dramatically based on penetration rate.
Outage issues +Eight hours of run time will provide enough +Can support fixed permanent generators to
backup to make it through all but the most deal with widespread, long duration outages,
catastrophic events. (Most outages are less if left undamaged by natural disaster.
than two hours.) Long-duration outage -In the event of widespread outage, a large
cases, network nodes would be out as well, number of subscribers are likely to pick up
unless powered by Natural Gas. their telephones at the same time. How
+Capability for large volume, simultaneous many simultaneous users can a single node
usage. hold up?
Capital Cost +Low initial capital cost, proportional to -Very costly for infrastructure.
penetration. -Real Estate costs for new nodes are costly if
available at all.
Operating Cost +Low operating costs, subscriber pays the -Very costly - to power an NIU is in the $5-$8
cost of powering the NIU. per year range depending upon the local
kWh costs.
Deployment Issues +Easiest incremental deployment method -Requires total rebuild of power infrastructure
(costs directly tied to revenue stream for and scrapping of existing power hardware.
telephony) -Tap replacement causes service disruptions
+No drop issues. for non-telephony customers
+Distance and density are non-issues. -Raises major site acquisition and right-of-
-Installation more time-consuming. way issues that require enormous upfront
time, as well as customer and general public
“obtrusiveness” factor.
-NEC Code 830 requires drop to be buried
18” underground or in conduits. In addition, it
requires use of a detector device that shorts
the line if it senses power disturbance
between the home and the node.
-Distance and density issues: how far is the
subscriber from the powering node? How
much loss will he incur? How many
subscribers can a single power node handle?
Is there a single point of failure that would
impact a large number of subscribers?
-Power passing taps are required.
+Premise installation a little easier, only one
box to hang on the outside wall.
Issue Local Power Network Power
Marketing issues -Architecture different, tendency for people to +Mimics RBOC model, making it easier to
avoid change. market. Power issues nearly invisible to
-Customer may be uncomfortable with customer.
battery in home and with paying for
electricity.
Battery / Generator -Need for battery management -Generators are very high maintenance and
issues program/service calls, or for customer to costly. Must be powered by Natural Gas if to
replace battery. Solution: web-based, cost- provide constant availability. Difficult to find a
effective user-replaceable Battery Program. location for large generator in every
+Battery technology has improved, run times neighborhood.
are longer and units are more compact. -Outdoor batteries require replacement every
-Outdoor, environmentally stable batteries two years or less. More and larger power
eliminate need for in-home appointment but nodes raise the battery maintenance costs.
cost more. -If not used to capacity, utility will still charge
+Batteries can last from 5 to 10 years up to 85% of capacity.
depending on model chosen. +No required home visit to replace a battery
several years after installation.
+No requirement for indoor appointment.
Reliability +Service is always on, except in the most +Indefinite run time when backed up with
extreme power outages. natural gas powered generators.
-If customer delays battery maintenance, -Concerns about powering down drop or
could result in outage large additional costs for Siamese drop
replacement.
-HFC corrosion is higher when passing
power.
Cost Issues
“Most agree, cost as compared to the level of reliability provided may be MSOs single largest consideration
when deciding how to power a telephony network,” says Brooks of Time Warner.
Capital Costs
A fully centralized power node location with a generator and one hour of battery time will cost between
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$30,000 and $50,000 per node, (for a 600 to 1000 home node) depending on current network architecture,
while the per site cost of the typical UPS for local powering is $65, including battery.
With initial infrastructure costs so high for centralized power, cable companies must have large amounts of
capital available to invest. Cable companies are not rate-based as are the phone companies, so they must
borrow capital to design and install infrastructure, which means a large cash outlay before there is any
payoff.
“A total centralized network can cost $100 million to build, and with higher reliability requirements for lifeline
services, installing network power can add up to 4 to 5 percent of the total build cost. That’s causing some
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MSOs to look for more innovative, efficient means of powering.”
3
“Cable Operators Feeling Power Surge”, CED Magazine, April 2000
However, if an MSO has approximately 25-30% market penetration, network power may be more cost
effective per customer depending on the pricing of the local power supply. The largest and best-known
name brands may reach more than 25% market penetration quickly enough to recoup costs, but smaller
companies most likely will not. One metric shows that if local power supplies are less than $40, it never
makes sense to go network, points out Brooks of Time Warner.
Make-ready (for centralized network power)

Heavy power-cables must be added to the network to distribute power, notes Larry Schutz, VP, Engineering
at Charter Communications. “These cables will push many utility poles beyond their loading capacity
because of weight and cable bundle size, which increases wind loading and ice loading. Power companies
require those that attach to poles to pay for changes necessitated by their attachments. So, for example, if a
cable operator adds additional cables that will cause the loading under heavy winds or ice loading to exceed
the limits for which the poles are designed, the cable operator must pay for the upgrade to the poles
impacted. In aerial portions of the system, make-ready may cost over $4,000 per mile.”
Overdesign
Network powering may force MSOs to spend more on overdesign due to the vagaries of predicting market
penetration.
“Operators have to architect their power on their hook rate (number of phone customers and usage). Their
conservative business models have been projecting a 155-hook rate. Now they are finding their success
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rate is much higher, which requires more power.”
It may be helpful to draw on the experience of one company in the UK that expected, and designed for, 10%
market penetration, Brooks says. They achieved 30% market penetration the first time out, and could not
meet expectations. If all subscribers connected at the same time, it would knock the cable out for the entire
neighborhood. So MSOs must overdesign network architecture to handle higher demands.
Operating costs
Network Power costs more for the MSO to run, while local power is paid for by the subscriber. However,
centralized power locations can save on maintenance costs by allowing easy access to on-ground locations
for an entire neighborhood in one location.
“Network maintenance is an important consideration when evaluating different power systems. Even
seemingly small reductions in required maintenance activity on a per-unit basis can translate into very
significant dollars that can be reallocated to additional infrastructure of value-added, revenue-generating
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services.”
4
5
6
“Power and its connection to Network reliability”, Alpha Technologies White Paper, Eric Wentz
Niche markets
Given the low cost and quick-to-market time of local power, Brooks points out that local powering serves
several niche markets well: 1. Low penetration markets 2. Non-lifeline secondary service 3. Introductory use
while building network infrastructure until the MSO has sufficient market share.
Key Technical Issues: Network Powering

Reliability of drop power
The implications of powering down the drop cable raises several concerns. The 60 Hz AC currents involved,
while small, can contribute to acceleration of corrosion compared to the normal extremely small RF currents
carrying the signals, resulting in more frequent than normal drop cable replacements. Also of concern is the
potential that digital services, such as telephony, may be more susceptible to ingress problems and
attenuation associated with powering through drops and with power passing taps.
Additionally, workmanship on drop connections in pre-telephony days may not have been sufficient to
ensure interconnect integrity. One solution proposed is replacement of telephony customers’ drop cables
with Siamese coax/twisted pair cables. However, the cost of doing this would add major telephony capital
costs -- an additional $13 per subscriber.
Safety of drop power

Although the 90 VAC that is being used in drop-supplied network power meets the NEC safety standards by
being energy limited, and does not normally enter the house to become exposed to the general public, there
are nevertheless some concerns. For example, it is not impossible for accidental (or deliberate) cuts to the
drop cable to occur and expose children, pets or animals to the center conductor voltage. A service person
error could potentially put power on a non-telephony drop, where there is nothing (no NIU) to block it from
entering the house and contacting or damaging TV and VCR equipment, or even the customer.
Tap replacement
Network power requires replacement of taps with power-passing taps. This typically disrupts basic service
for everyone downstream, presenting a dilemma for the service provider: replacing all taps in one short time
period (midnight) or replace them only as new telephony customers are added, risking disruption of a typical
customer’s service repeatedly during the transition period.
Impact of NIU power on system loading

Of particular concern may be situations where a cluster of telephony users adds significant load at the end
of a long powering span, bringing voltage drops to an unacceptable point. This may necessitate a new UPS
to be installed near the users, even though the existing central UPS has ample output power capacity. This
in turn undermines the advantages of having fixed generators, and requires some portable generators to be
deployed as well.
Site location issues
There can be major problems with acquiring easements, permits, etc. to locate central UPSs along with their
associated generators. Municipalities, concerned about liability, safety and noise issues (all involved in
cable operations have addressed complaints over “hum from power supplies), generally do not want this
equipment on municipal property. This adds a significant level of complexity and cost to the service
deployment for new telephony services. There are also geographies where this issue is prohibitive
(wetlands). Service providers who favor central network powering will face situations where this simply is
not feasible.
Maintenance
Manufacturers recommend “exercising” generators every 30 days to ensure that all mechanical systems are
operating properly. In addition, oil changes are necessary for engine-generators after each 100 hours of
operation. Engines operate 44 hours per year under conditions of 95 percent AC availability, and 90 percent
of outages are shorter than 10 minutes. Typically, an oil change is needed every other year. The total
number of oil changes a company would have to manage depends on what penetration the network is
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designed for.
Key Technical Issues: Local Powering

Indoor vs. outdoor location
Local power supplies can be located either indoors or outdoors, with certain tradeoffs. Outdoor locations
provide better service provider battery replacement access (no need to schedule an appointment with
homeowner) and customer transparency. However, outdoor deployment requires environmentally stable
design and components, battery heating and outdoor packaging, resulting in a cost premium. Indoor
location would facilitate customer replacement of the battery, avoiding the cost of service provider personnel
visits.
Battery Replacement Issues

Customers may not be comfortable having to replace their own battery, or with having to make an
appointment for an in-home service call. Outdoor batteries eliminate the hassle of service appointments, but
environmentally stable batteries may cost more. Depending on market penetration, the number of truck rolls
simply to replace batteries must be taken into account. There is also a low-cost option to install a unit with
an 8-10 year battery life, rather than the standard 4-6 years.
Solutions: Remotely Monitor Battery State & Employ Web-based Battery Exchange
American Power Conversion (APC) has developed a “Battery Replacement Program” plan that will
dramatically reduce the need for service calls by making it easy for customers to replace the batteries
7
Telephony Powering, White Paper, Charter Communications Internal Document
themselves. The APC PowerShield sends a “Replace Battery’ message to the NIU, which is then
transmitted via the MSO to APC. APC ships the hot-swappable battery directly to the subscriber with simple
instructions. The subscriber sends the used battery back to APC for recycling with a postage-paid, pre-
addressed label for mail pickup. These batteries have been tested to be extremely safe and have been
approved to be sent via the US Postal Service. MSOs could encourage users in this direction through one-
time dollar credits toward monthly service, or a free premium channel.
Francois Rouseeau of Videotron outlines another option. “We are not network believers due to operational
and maintenance issues. We decided to go with local power solutions in our initial tests, using an
inexpensive battery system with fixed terminals, no wires, so that it is easy to use. We kept it inexpensive
by building the power management software into our cable modems. The battery is a ‘dumb’ terminal; it has
no processing power, only two LED lights for backup confirmation of power. The modem will signal us when
the battery needs to be replaced, in 7 to 9 years.”
Marketing Issues
Many agree that the entire industry could turn on customer service issues – how well companies treat their
customers and respond to their concerns. Some customers, reluctant to change, are uncomfortable with the
idea of a power supply location at their home and are unused to having to replace a battery for telephony
service. Rousseau has solved some of the aesthetic issues by color matching the UPS and the cable
modem, and building custom racks for all the telephony equipment.
The market in general has not focused on a single approach, and probably will not in the future. There are
applications well suited for each approach, and a combination of the two is probably ideal. Rousseau
agrees that they have not determined whether to move forward with customers replacing batteries, or
whether Videotron would be conducting “proactive swapping” a few months before the end of battery life.
Network Management
The local power supply alarms, commands, and management data must be transmitted to the service
provider’s operational support and service personnel via a network management software system. Existing
local power supplies are able to provide battery status information, which includes on battery alarms,
missing or disconnected battery alarms, and replace battery alarms. MSOs can elect to ignore alarms if it is
aware of a widespread power outage as the cause or call the customer if it is a single-home issue,
committing to a truck roll only when necessary.
Deployment Considerations
Network Power
This solution requires a total rebuild of the powering infrastructure, as well as replacement of active
elements for the upgrade to 90 VAC. It also requires evaluation and qualification of suppliers for new types
of power equipment. The equipment evaluation, network design, planning and network rebuild process may
very well put power on the critical path to being able to deploy new services and start exploiting new
revenue sources. The high capital cost presents a front-end-loaded deployment scenario. Continuing
rebuilds and upgrades to the power network may be needed as penetration grows over time.
Local Power
This is the only infinitely scalable solution, allowing for cash-flow-based capital investments. Power is added
one telephony customer at a time. No other changes or disruptions to an existing power network are
necessary once it is equipped with UPSs and monitoring to hold up the line-powered active elements. Many
new systems have already done this or can easily implement as upgrades. Only one new power element is
required, and it can rapidly drive down the volume cost economy curve if deployed in large quantities.
When time-to-market is a concern, local power can be deployed more quickly. Early use of local power for
rapid start-up service is not mutually exclusive with later network rebuilds and capital expenses (for
example, migration to central network power). This is especially true once the revenue stream for telephony
has been solidly established, and penetration rates are high enough to justify the expense of network power.
Conclusions
As trials proceed and the cable industry gets closer to deployment, many are finding they do not have the
infrastructure to provide network power, and are using local power for immediate deployment.
In the final analysis and rush to capture a hot market, it appears that local powering could become the
dominant power alternative of choice, sharing the market with network power. In all wireless local loop
applications, local powering is required everywhere primary line service is being deployed. As services
become integrated - voice, video, data – customers will demand cost-effective bundled communications
from one provider - including lifeline telephony.
Looking ahead, as demand for bandwidth increases, the cost of fiber technology decreases, and the
demand for applications increases bandwidth usage, fiber to the subscriber will become more common.
New developments are wiring fiber into new homes in anticipation of the technology demand. Since you
cannot send power down fiber lines without incorporating expensive siamese cable, local power supplies will
answer the future demand as well.

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Local versus Network

Power for Cable

White Paper #80

network and local power.

To successfully offer telephony services driven by an always-on mentality in a competitive market, it is

Centralized Network Power

Power Outage Statistics

Worst-Case Circumstance Performance

Statistically Defined Performance

Issue Local Power Network Power

Make-ready (for centralized network power)

Key Technical Issues: Network Powering

Safety of drop power

Impact of NIU power on system loading

Key Technical Issues: Local Powering

Battery Replacement Issues

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