# Presentation: 221800

## A Commercial View of Optical Networking In the near Future

**A Commercial View of Optical Networking In the near Future**

**Robert Feuerstein, Ph.D.**
- _[Robert.Feuerstein@Level3.com](mailto:Robert.Feuerstein@Level3.com)_

**Disclaimer: All the following comments express the views**
**of the author, and do not represent the views of Level 3 Communications.**

## Purchasing Drivers

- Physical route diversity is critical for high Network Reliability => requires construction
- Construction is far more expensive than all the optical networking gear out there
- Security is a driver for “Private Networks”
- For “Private Networks” customer purchases:
- Dark Fiber and installs optronics, or
- Optical Wavelengths and/or SONET Private Lines, or
- L2VPN, or
- IPVPN

***No Network***
***Spurs***

***No Non-Diverse ***
***City Laterals***

***Diverse POP entrance facilities***

***Diverse POP***
***Building risers***

## Protected Wavelength Service: Poppycock

-  Diverse Waves provide transparent SONET overhead bytes for protection
-   switching by customer router or ADM
-  Diverse Waves provide full access to all bandwidth; e.g. **two x 10G**
-  Protected Waves basically switch on loss of light or lots of bit errors
-  Protected Waves built end-to-end with 1+1 protection
-  Protected Waves provide access to **only one x 10G**
-  Protected Waves will cost more than two x 10G waves
- So, why would anybody purchase Protected Waves?

## Optical Wavelengths on Demand: Layer 1

**Forgeddabout it**
**Here’s why:**

-  Carrier must purchase multiple wavelength switching boxes:   Big $$
-  Carrier must install Wavelengths throughout network:	Big $$
-  Carrier must develop support systems to enable this product:  Big $$
-  Carrier must train sales and operations staff to support new product
-  Carrier must price it low enough to generate customer interest
-  Small market: 99.9+% of circuits are sub-wavelength
-  Carrier has to over-subscribe Wavelengths to enable dynamic provisioning
- 	and reasonable economics
-  So no guarantee that BW will be there exactly when customer wants it
- 	   For commercial customers, when they want bandwidth,
- 		    **THEY WANT BANDWIDTH!**

## “Wavelengths” on Demand: Layer 2/3

**Maybe: here’s why:**

-  Ethernet/IP switches can support bursting of traffic
-  Ethernet with MPLS, and IP switches, can provide protection
-  Ethernet/IP switches perform stat muxing that can lower costs
-  Carriers only need to add a few extra wavelengths to existing ones
-  Carriers already have Ethernet and IP switches: minimal new
-   training/support or systems development needed
-  Carriers can provision oversubscription in a sensible way to
-   provide economical usage based pricing

## A Short History of Telecom

- Early 1900’s: 	Lots of overhead wires and operators on roller skates
- Early 1900’s:  	Development of “Ma Bell”, where “Ma” is short for Monopoly
- 1982: 		Judge Green and Breakup of Ma Bell
- 1996: 		Telecommunications Act
- 1997 - 2001:   	100’s of Billions of $$ invested in telecom
- 2000 - 2001:   	Telecom crash
- 2000 – 2005:  	Major price cuts in telecom services, 100’s of bankruptcies
- 			So what’s next?

**A Short History of Telecom**

## Optical Transport Services Pricing Trends

- Prices in 2005 are about 10% of what they were in 2000
- Prices in 2010 will be about the same as today
- Because 10x the bandwidth on the network means:
- More real estate 	(large inflation)
- More electricity 	(large inflation)
- More equipment	(modest price cuts per box)
- Higher Right of Way fees
- More equipment maintenance/service fees (modest cuts, per box)
- More people for more work (modest inflation per employee)
- All of these force Service Provider costs to rise with increased bandwidth demand, even with smaller, less expensive, lower power consumption equipment and more efficient systems
- If prices continue to fall dramatically in the short term, then bankruptcies will ensue, followed by consolidation and price increases
- The era of collapsing bandwidth prices is coming to an end

## 104

- 104

- 107

- Number of
- Callers
- (optical ports)

- Call Rate
- (per year, per port)

- 103

- 100

- All Optical Switching
- Required (distant future)

**US telephone network**

**Optical Networks Today**

**Technician re-runs fiber jumpers**

**Most users today are NOT **
**Optically connected **
**to the Network**

**Manual patch**
**panel @ $50/port**

**Early 20****th**** Century: Telephone **
**Operators with **_**manual switchboards**_** **

- OOO: a small niche application

**All Optical Switching: ****A bunch of Hooey**

## Early 1900’s Grand Junction, CO switching office.

## Ultra Long Haul Transmission: Stop Feeding me the Malarkey

- The ULH Dream: All optical wavelengths from San Jose to NYC
-  small niche application
- But, A Network’s usefulness grows with its connectivity
- 	See Prof. Andrew Odlyzko web page: http://www.dtc.umn.edu/~odlyzko/
- The Ideal Network:
-  Every facility supports low cost, sub-wavelength traffic add/drop
-  Every amplifier site is an add-drop site
-  It is inexpensive to add new sites between the existing amplifier sites

## Summary

** ****Reliability and Security drive large purchase decisions**
** ****Protected wavelengths: Poppycock**
** ****Wavelengths on demand Layer 1: Forgeddaabout it**
** ****Optical transport pricing: Stabilizing**
** ****All Optical Switching: Hooey**
** ****Ultra-Long Haul transmission: Malarkey**