In two decades, Ethernet has taken us a long way. Once confined to the workgroup, Ethernet is now the dominant networking topology throughout the world.

This highly flexible technology is now set to go even further. A new implementation of Ethernet - called Long-Reach Ethernet (LRE) - solves one of the most intractable networking challenges to date: the delivery of cost-effective broadband services into multi-unit buildings. With LRE, a wide variety of high-margin broadband services can be provided by building owners, property managers, hotels, universities and cable and telecommunications providers.

LRE addresses the principal problem that has long snagged service delivery into these areas. It allows very high bandwidth to be delivered over the telephone grade wiring (categories 1, 2 and 3) that already exists in almost all buildings. So, existing (often aging) buildings no longer need to be rewired with higher-grade cable or fiber to offer broadband services.

As a result, broadband services can be delivered very cost-effectively, including services that require the simultaneous transmission of voice, video and data. In turn, service providers, building owners and building managers can rapidly, affordably and dramatically enhance the revenue generated per tenant, student or hotel room guest.

LRE: A Superior Solution

Is there sufficient demand for broadband services into multi-unit buildings and campuses? Absolutely! Among all multi-unit buildings, the U.S. market for high-speed Internet access is expected to jump from $371 million in 2000 to $2 billion in 2004. In the hospitality industry alone, the broadband market will explode from $137 million in 2000 to $674 million in 2004, according to Cahners In-Stat Group.

LRE addresses these markets perfectly. It provides true broadband into the thousands of multi-unit buildings and campus environments not wired with Category 5 cable or fiber. In sum, LRE is:

High Speed. LRE delivers high throughput that can drive the most demanding broadband applications. At its base, LRE boasts a symmetric transfer rate of 5 Mbps over 5,000 feet. Shorter transmission distances boost the delivery speed even more. At 4,000 feet, LRE transmits at 10 Mbps and, at 3,200 feet, at an astounding 15 Mbps (all full duplex). Certainly, users will be thrilled with such impressive speed. Moreover, the differing speeds of LRE allow tiered levels of service to be offered at distinct price points.

Low Cost. LRE is based upon Ethernet, generally recognized as the most cost-effective - and the most popular - networking topology available. Moreover, this solution runs over existing, unconditioned telephone-grade wire. Therefore, no rewiring is required. Ethernet transmissions are even able to co-exist with Plain Old Telephone Service (POTS) and ISDN over the same pair of ordinary copper wires. So, existing networking and telecommunications infrastructures can be leveraged in conjunction with LRE, providing broadband services for a very low overall cost.

A Revenue Generator. Not only does LRE deliver the extremely high bandwidth and lightning fast Internet connections demanded by hotel guests and multi-unit and campus tenants, it also boosts revenues. Using LRE, a host of new, value-added services can be offered that users will pay for (see below). Consequently, LRE boosts the bottom line, while providing an amenity for users.

LRE is the ideal technology to serve the burgeoning multi-unit building market confidently and cost-effectively, delivering impressive performance and unfettered access to the Internet and to high-speed network services for a very reasonable cost.

Markets for LRE

Why is Long-Reach Ethernet a perfect broadband solution for most multi-unit buildings? Today, hotels, apartments, office buildings and condominiums generally are not wired for high-speed connections. In fact, many are older, historically significant buildings that could be wired only at tremendous cost and challenge. Some buildings even have significant accumulations of asbestos or are framed in concrete, making rewiring almost impossible. LRE requires no re-wiring, making it ideally suited to serve these buildings. This solution is especially well positioned for the following market segments:

The Hospitality Industry
Hotels, hospitals, convention centers and even airports are natural markets for LRE. LRE lets visitors access a wide variety of business and entertainment services, generating substantial revenue for both the provider and the building owner/manager. The market opportunity is vast. In the United States alone, there are about 51,000 hotels with 3.9 million rooms. Only a small portion of these buildings today offers high-speed access. Within a few years, this situation will change completely. Guests and visitors will expect access to broadband services, heralding a lucrative new market.

Residential Multi-Dwelling Units (MDUs)
Apartment complexes, condominiums, dormitories, townhouse complexes and other MDU buildings represent a largely untapped market for the delivery of broadband services. In fact, only a small fraction of an estimated 21 million MDU households in the United States have high-speed Internet access today. But 95 percent want broadband service, according to the Yankee Group. In all, the Yankee Group estimates that 14 million households are interested in and willing to pay $40 per month for broadband services. This sum presents a highly lucrative opportunity for both service providers and the owners/managers of MDUs.

Commercial Multi- Tenant Units (MTUs)
MTUs are a third major market for Long-Reach Ethernet. MTUs include many commercial properties, such as office buildings, office campuses and industrial campuses. According to the U.S. Department of Energy, there are 705,000 commercial office buildings in the United States, with 60,000 containing more than twenty tenants. Like MDU residents, these tenants generally lack - but desire - greater bandwidth, representing significant pent-up demand.

For the most part, broadband access has not been provided in hospitality, MDU and MTU environments due to the high cost and disruption of wiring existing buildings with Category 5 cabling. So, a great need exists for LRE - a cost-effective, high-speed solution that does not require threading additional wire throughout a building.

This diagram shows a typical installation of LRE in an MxU environment. Located in the building basement, LRE switches deliver broadband services over a building backbone of ordinary copper wire. In-room CPE devices split LRE and POTS traffic, allowing users to leverage broadband connections.

New Services

So, what are these new, highly lucrative broadband services made possible by LRE? They range broadly into two categories: business services and recreational services.

Business Services
· Broadband Internet Services. It's a constant complaint. A guest checks into a hotel room and can only access the Internet at very slow dial-up modem speeds. Or a small business has to pay for its own T-1 line to get the Internet speed it needs. With LRE, high-speed Internet access is easy to deliver to users in multiple rooms or units. And, in the process, a premium can be charged for this lightning fast access.

· Secure LAN Access at LAN Speeds. Telecommuters, SOHO users and road warriors all need secure access to the company LAN. LRE allows users to leverage virtual private networks (VPNs) to link to the network securely. As a result, they enjoy full access to their applications and data, enabling them to work from hotels, small offices and home offices just as productively as from company headquarters.

· High-bandwidth Applications. LRE provides the robust bandwidth needed to support networks based upon converged voice, video and data. LRE easily enables such demanding applications as videoconferencing, video-on-demand and e-learning, which make long-distance communication robust, interactive and highly productive. With these technologies, companies and individuals can hold meetings in real-time across great distances inexpensively and without compromise. This capability is a great boom to business travelers who must interact face-to-face with colleagues and customers from their hotel rooms. In addition, educational institutions can offer a full slate of coursework to students residing in remote locations.

· IP Telephony. IP telephony takes an ordinary telephone and turns it into an exciting, dynamic, interactive communications tool for the 21st century. With IP telephony, voice is carried over the IP protocol - just like data. So, users are able to add video and data to their phone calls. As a result, callers can truly interact and collaborate with each other over ordinary phone lines. IP telephony also can be far more affordable than current voice tariffs. LRE delivers the bandwidth to make IP telephony possible.

Wireless Services
Today, business travelers, students and even office workers are highly mobile. Therefore, they need high-bandwidth links both in and out of their hotel rooms, classrooms and offices. LRE complements such a robust wireless broadband solution. With a combination of a wired LRE and a high-bandwidth wireless solution, users can take their laptops to the hotel conference center, to conference rooms, or even to the campus coffee shop-and maintain seamless, high-speed access. With this capability, they can work efficiently from anywhere within a building or campus environment.

Recreational Services
· Recreational Internet Use. We've seen it already. More and more, discriminating apartment and condominium dwellers require that their units come equipped with broadband Internet access. These high-end tenants are even willing to pay a greater rent or fee for the service. LRE easily provides this capability, even in old-world brick or concrete buildings.

· Entertainment. For the hospitality industry, in-room entertainment already generates substantial revenue for hotels and adds value for guests. With the addition of LRE, these services can be even more lucrative. LRE lets hotels and resorts offer much more sophisticated and extensive entertainment options, such as interactive video games and video on demand.

· Gaming. With high-bandwidth availability, hotels also can offer in-room gaming, where it is allowed. Once again, this capability opens up a whole new source of revenue from vacation travelers.

Without question, this list of broadband applications - already compelling - will grow substantially in the years ahead. Indeed, these applications cover just the immediate needs of today's business, wireless and recreational users.

LRE: Answering the Challenge

Occupants of multi-unit buildings are an enormous, captive marketplace for the delivery of broadband service. To date, the challenge has been to get service to them quickly, cost-effectively and robustly. Long-Reach Ethernet answers that challenge. LRE offers high-speed connections for the lowest possible cost. So, service providers, building owners and building managers have the chance to provide high-bandwidth connections to a virtually untapped marketplace. And, in turn, they have a tremendous new opportunity to generate substantial revenue and boost profits.

About the Author

Maciej Kranz is the Director of Marketing for the Desktop Switching Business Unit (DBSU) within the Commercial Line of Business at Cisco Systems, Inc. In this position, Kranz leads a team in the development of market leading Ethernet switching solutions for the midmarket, enterprise LANs, MxU and IP/Ethernet Metro Access. Kranz received his Bachelor of International Business from the Warsaw School of Economics in Poland and his Master of Business Administration from Texas Christian University.

SIDEBARD

Up and Running with BBSM
So, you've deployed LRE to get the high-performance infrastructure you need to deliver a host of incredible new broadband services. Now what do you do?

Many LRE users use a service creation platform called Cisco Building Broadband Service Manager (BBSM), which lets service providers or property owners/managers easily deploy, market and operate broadband services. BBSM provides the functionality needed to initiate broadband services, manage them and even bill for them in a highly automated manner. In addition, BBSM software works with any other in-building infrastructure, including Ethernet, cable and wireless technologies, thereby providing a complete networking solution.

BBSM delivers highly cost-efficient service provisioning. It also allows users to customize their own online experience. So, they can select their own levels of bandwidth and services on an as-needed basis. In addition, service providers and property owners/managers can create portals and content specifically targeted to their users. In the process, they're able to gain many revenue-generating options, including user fees and online advertising revenue. And, since the system is highly automated, the active involvement of the provider is minimal.