Addressing the Challenges of Delivering Broadband Services

to Multi-Tenant Buildings

By Allan Beaudette & DragonWave Inc.

 

More than 60 years ago AT&T amassed an impressive group of engineering talent that, after years of toil, established the foundation that defined the architectural structure for virtually every telecommunication network in existence. These design principles have stood the test of time and, even today, is being exploited to deliver your telephone, cable TV and, if you are lucky enough to live in the right neighborhood, broadband data services. Even with the tremendous advances made in technology little has changed in the method by which these services are being delivered.

 

Telecommunication providers delivering these services over time have spent tremendous sums of capital to connect virtually 100% of the population to their networks. These companies, whether they come from a cable or telephone background have constructed these vast networks under some form of a monopolistic policy ensuring that they would derive an acceptable return from their investments. This successful approach of delivering telecommunications services in mass has allowed us to become an incredibly well-connected society.

 

These networks have been conceived and designed to deliver high penetration services into the mass market. Thanks to this we can now take for granted that each of our homes come equipped with an RJ-11 telephone jack and 75-ohm cable television connector. The demand for high speed Internet access however popular, has not yet reached the massive demand that telephone and television services enjoy. The current consensus is that there are approximately 3 million broadband connections in the US, which represents a service penetration rate of less than 3%. Without the monopolistic environment that operators enjoyed in the past, today’s service providers intending to deliver broadband must deliver these services within a truly competitive environment satisfying the needs of owners and shareholder alike.

 

With low service penetration rates the favorite targets have been the multi-tenant market where potential customers are concentrated into a single location. Many landlords realizing that offering a broadband services will differentiate them within their real estate market, are encouraging service providers to place their building on net. With less than 10% of multi-tenant business buildings connected to fiber, business and landlords alike are aggressively seeking solutions that will connect their building to a broadband network.

 

This opportunity challenges competing service providers in their ability to deliver broadband services over a cost effective network. At the center of the service costing structure are the price points that the DSL and cable modem markets have established, typically priced between $29 and $60; these low cost Internet service connections have set the thresholds for consumer expectations. The extremely cost effective bandwidth being offered to the residential market is attracting the attention of business customers who in the past, have become accustomed to paying a premium for high speed telecommunication services.

Addressing the needs of these broadband customers are challenging both the incumbent and competitive access provider alike.

 

The cable industry enjoying a high service penetration in the cable television market has deployed a HFC (Hybrid Fiber Coax) technology enabling bi-directional services to their customers. With their network topology based on a tree trunk approach they are capable of delivering a broadband Internet service over their broadcast network. In the course of designing these networks they were forced to estimate the number of customers that would be attracted to their network and divide their customers up into sub-divisions. Depending on their customer estimates, each sub-division could contain 10’s to 100’s of customers and would share a common chunk of bandwidth. If the customer take rate was lower than expected, the customer in that sub-division would experience excellent performance. If the number of customers attracted to the service were higher than expected the network connection would be severely overbooked, resulting in poor throughput performance. In the case of multi-dwelling buildings access to the internal coaxial wiring plant can prove to be a challenge, as in many cases it is not owned by the service provider.

 

For access providers seeking to deliver services over the telephone copper network the prospects are no less challenging. These networks were traditionally designed to deliver voice service to customers up to 18,000 feet from the central office. These broadband service providers using ADSL as the access vehicle have been forced to study demographic data to select the most appropriate central offices to deliver their service. The cost to the service providers to install DSLAM’s can be significant depending on the available space within the targeted central office. Again depending on take rate estimates the operator will typically pre-configure the system to meet the expected demand. A customer on requesting a connection must first determine if they reside within the 12,000 foot service limitation of ADSL for limited service or within the 8,000 foot with the capability of receiving their premium bandwidth services. On average this equates to only 20% of their customer base capable of receiving their premium bandwidth services and slightly more than 50% capable of receiving service at all.

 

Bridging around these copper based networks are operators that are using wireless as the access media. Unlike their copper based competitors that are capable of offering a low cost CPE, radio based CPE still command a premium. The advantage that the wireless operators have, is their ability to deploy services over a larger geographic area. Using this capability the overhead costs implied by the central service distribution point is divided over a much larger geographic area and customer base. The size of these service areas or cells is defined by the frequencies and the effects of fade with lower frequencies capable of offering the greatest service range.

 

The ability to achieve profitability regardless of the access distribution method depends on the customer take rate and the invested capital required to capture that customer base. Each access solution has the capability of providing service over a given geographic area with a given limitation on available bandwidth. With low penetration rates the imposed costs of the service distribution network will contribute significantly to cost of each attached customers. As the number of the customers attached to the network increases, the cost per subscribers approaches the cost of the CPE plus any associated network cost.

 

A first to market broadband access service provider would on entering a new market expect to capture up to 2% on their serving area with a typical business case expecting a service uptake of 7% - 10% within a five year horizon. With these assumptions the only variable is the density of the customer within a given geographic serving area.

 

Once a multi-tenant building has been connected to a high speed network, the challenge turns to the distribution on services within the building. Traditionally for the business market, telecom services used the internal copper to distribute services such as voice, 56kbps analog modems and T1 (1.5mbps) services. For the residential market a standard twisted pair from the central office is terminated in the basement of the building with the service distribution left to the building owner. In most cases a standard 26 gauge copper was used however there were a significant number of buildings in the 70’s and early 80’s which used a lower grade copper wrapped paper to save costs. This grade of copper will challenge high speed ADSL technologies in delivering high speed services and force building owners to upgrade their wiring plant to support high speed services.

 

Many landlords impatient with the ability of the incumbent service providers or wishing to offer their tenants innovative services, are becoming "Netlords". Although fiber build outs have been proceeding at a rapid pace, they have only succeeded in connecting less that 10% of multi tenant structures. This has left a significant portion of the market seeking alternative access schemes to attach their buildings and tenants to broadband networks. This situation has opened a unique opportunity to broadband wireless spectrum holders giving them that ability to quickly seize a market position.

 

Once the building is connected to a high speed network, the challenge turns to the distribution of service to individual tenants. As mentioned previously, the service take rates will typically define the most appropriate method to attach each customer to the network. In cases where service demands are very high, a hardwired access strategy is generally the best approach using category 5 or better cabling. This will provide each tenant with an access media capable of delivering enough bandwidth to the most demanding applications in general use today. For those wishing to deliver a future proofed interface an optical fiber connection should be considered along with the copper cabling.

 

Where service demands are low or unknown, the decision facing the landlord becomes difficult. The cost to install a new cable plant into an existing building is both disruptive and costly. Many service providers and landlords alike are deploying or experimenting with wireless technologies based on the 802.11 standard. This access method allows each customer the ability to access the network at speeds up to 11Mbps. Individuals connecting to the network would use a tiny modem occupying a slot in a desktop PC, or in the case of a portable PC, a little card that gets inserted into the PCMCIA slot available in most laptop computers. This approach allows the service providers and landlords alike, the ability to deliver high speed services while delaying an investment in expensive cabling infrastructure.

 

An additional benefit provided by 802.11 is that the service allows a certain degree of mobility by the user. This gives each of their customers the convenience access speeds of a physical network, but with the ability of allowing people to move freely within the office or residence and maintain their network connection.

 

The rate of evolution for telecommunication services and their associated take rates have always been driven by their ability to rapidly deploy their network. Few will question the bandwidth advantages that come from attaching buildings and customers to a network via fiber. With only a small fraction of buildings attached to a fiber network, both landlords and their tenants alike are finding themselves on the wrong side of the digital divide. Those seeking to overcome these barriers are looking to broadband wireless and their ability to rapidly attach their buildings to a high speed network. With these high speed wireless systems capable of achieving speeds in excess of 600Mbps, they are now exceeding the bandwidths being delivered over SONET based fiber services. By further enhancing both network connectivity and convenience of wireless LAN technologies through the use of standards based 802.11, landlords are capable of not only offering all of the traditional services but can now enhance their service offering beyond what a traditional wire line network is capable of offering.

 

 

About the Author

Allan Beaudette, Director Strategic Sales is responsible for the development of sales channels for DragonWaves' innovative range of broadband radio products. He has accumulated over 20 years experience in the telecommunications industry in wireless, switched voice, data and networking technologies. The author may be reached with questions or comments via email at abeaudette@dragonwaveinc.com