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Economic Assessment
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Because of the wide variation in service requirements, costs, regulation, and degrees of modernization among service provider networks worldwide, it is not possible to construct a simple business case for EPON that would hold in all or perhaps even most instances Instead, in this section, we will highlight some of the fundamental nontechnical issues surrounding a real EPON deployment While it is safe to assume that a real business case would include most of these issues, we cannot predict how any one service provider might weigh the various factors
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Overall Installation Cost per Subscriber
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A detailed cost model for an EPON deployment will include costs for central office equipment, fiber cable, splitters, supporting infrastructure (conduit and utility poles), construction costs at the subscriber s location, and customer premise equipment (CPE) costs
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Depending on the modeling assumptions, these itemized costs can vary dramatically Let s take central office costs as an example: is an allocated share of the OLT the only cost included; or must the model also account for the costs of the PSTN gateway, the video distribution network, connections to ISPs, central office real estate and facilities, and so on In other words, which elements of the network must be charged to the EPON deployment and which can be treated as sunk costs Similar decisions must be made in modeling the costs of the outside plant, and it is worth noting that outside plant costs traditionally dominate such a deployment, with labor costs representing the largest component Even though we cannot construct a generic bottom-up model here, we can get a top-down estimate for the magnitude of per-subscriber costs by using a 2005 published report on planned fiber-access spending by NTT, which stated that NTT foresaw investing $42 billion over a period of five years to provide fiber-based services to 30 million homes and businesses [23] This leads to a simple estimate of $1410 per subscriber Although this single number does not shed any light on the constituent costs or on what will be treated as sunk costs for this deployment, it is in line with typical estimates for EPON/FTTH per-subscriber costs
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Cost of the CPE
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As with other mass-market broadband networks (eg, xDSL or cable modem), one of the most closely watched costs in EPON deployments is the cost of the CPE, and some specific comments are warranted here Early indications are that as EPON ramps into high volume, it is following a cost reduction curve very similar to that of DSL: approximately three years after the mid-2004 adoption of the IEEE 8023ah standard, EPON equipment costs have decreased more than 50 percent Concurrently, the cost of the most expensive ONU subsystem, namely the optical module, has fallen by 70 percent or more There is good reason to believe that, as it matures, EPON CPE costs will be similar to those of other mass-market broadband-access devices
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EPON vs Other PON Solutions
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EPON is frequently compared with other PON solutions, most commonly with WDM PON and the ITU-T systems (APON, BPON, and GPON) Compared with the IEEE and ITU-T systems, WDM PON is in the earliest stages of development and commercialization (initial prototypes based on tuneable lasers, injection mode locked FP LDs and RSOAs are commercially available as for July 2007) and is not a single, well-defined solution Rather, it is best thought of as a broad category of proprietary systems that vary markedly in terms of basic technology As a rule, they are -per-customer systems, meaning there is a laser and a receiver in the OLT for every customer, instead of a single laser and a single receiver for the entire PON This additional cost, along with the need for much more sophisticated WDM functionality in the system, leads to significantly higher per-subscriber costs when compared to either IEEE or ITU-T solutions The ITU-T systems, specified by the ITU-T G983x and G984x series, were originally designed as the access portion of an end-to-end multiservice ATM network, and this
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Passive Optical Networks (PONs)
heritage permeates these platforms At the physical layer, ITU-T PON systems use SONET/SDH requirements for timing, scrambling, and so on, which leads to intrinsically higher per-subscriber costs when compared to EPON For example, the SONET scrambler must be able to tolerate up to 71 consecutive, identical digits, which presents a more difficult clock and data recovery (CDR) problem than that found in EPON, which uses 8B/10B To deal with the jitter accumulation problems and tighter jitter transfer function requirements of GPON, large analog filters with low-time constants are needed, the system must deal with baseline wander due to an unbalanced line code, and more expensive DC-coupled optical receivers are needed Additionally, the shorter upstream burst overhead of GPON requires faster CDR and gain adjustment than does EPON, which translates into a more expensive OLT receiver, while the ONUs must include much faster lasers with significantly decreased laseron/laseroff periods (approximately 50 times shorter than the ones adopted for EPON grade ONU equipment) Lastly, the requirement for adjustable ONU laser power levels increases the relative cost and complexity of the GPON ONU At the protocol layer, GPON uses fixed framing, and packets are fragmented at frame boundaries; hence, bidirectional SAR functions are needed for every flow This adds considerable complexity and cost (in the form of buffering) to the system, especially at the OLT, which may need to support as many as 4000 flows simultaneously In short, any business case that selects GPON must be able to tolerate significantly higher equipment prices than would be needed for an EPON deployment
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