Monday, November 30, 2020

Do We Need Global Optical Standards?

Should specific mandated optical fiber standards be imposed globally, as are Wi-Fi and mobile protocols? It’s a good question, but such optical transport standards, beyond what we already do, are less necessary that wireless or mobile protocols, for reasons directly related to different cost drivers for mobile, untethered and fixed networks.


For 5G mobile networks, for example, core transport represents about 10 percent of total network cost. No matter what we do, we cannot leverage as much value from standards in core optical transport, compared to standards at the edge.


That largely applies even for fixed networks. Traditionally, fixed telecom and cable TV network cost has been concentrated in the access network and edge interface. Perhaps 80 percent of fixed network cost is in the access portion of the network, only 20 percent in core transport and “switching.”


source: GSMA 


The point is that optical transport in the core is a relatively small driver of network cost. Access represents much more. But how much cost reduction or scale can we drive in the optical access network? Some, but not as much as you might think.

Could cost be lower if a single global standard were used for optical access (even if distribution and transport were not standardized globally) networks? Perhaps. But not necessarily.


A single standard for optical access would overprovision in some areas. A single standard might create minimum capabilities that are "overkill" for many customers. That possibly raise costs enough at the margin to make some deployments untenable and thereby improve the business case for rival platforms.


The reasons have to do with the very-different end user and edge cost implications of global standards for wireless, mobile and fixed network devices. Among the best reasons for global standards are the ability to drive down costs, in the core and at the edge.


But it is the edge that really matters, as most communications cost is driven by the edge. Core network choices are affected by volume, to be sure. But core network choices are mostly transparent to edge device costs. 


No matter what choices are made about transport technology, the edge interfaces for every optical fiber network are electrical. Light is demodulated and converted to electrical format (Ethernet) at the side of a home or in the basement of a building, and then frequently from Ethernet to Wi-Fi for local premises distribution. Volume for the optical network elements is necessarily limited, compared to electrical interfaces actually used by end user devices and premises distribution devices.


It does not matter to the edge devices what the core network or even access network optical technology happens to be. The device interface is Ethernet or Wi-Fi. Those interfaces enjoy vast scale and therefore are quite affordable.


So wireless and mobile networks are different. It does matter what the access protocols are, as frequencies are specific and access protocols are specific at the device level.


The cost implications of a mandated global optical fiber access technology are limited to the effect on optical-to-Ethernet interfaces. 


The cost implications of mandated wireless or mobile protocols are much much broader, affecting virtually every connected device. Roughly speaking, as much as 80 percent of end-to-end network cost is at the edge and access network, looking only at the transport networks. 


Total cost, including edge devices and local area networks, is far higher, probably in the 95 percent range of total cost to support communications.

Of course, there are different types of connectivity providers. Not all firms are in the retail business. Many, especially providers focusing on enterprise-only or backbone connections between point of presence, might find that core transport is about half the total cost, while access costs--just to support the points of presence--constitute the other half.


That probably supports the overall point about where cost is generated, however. Even WAN transport providers not serving retail consumers, small businesses and organizations find that access costs are about half of total network-related cost, averaging urban, suburban and rural locations that must be reached. 

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