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2 Literature review

4 Generic business model for NGA

4.1 Basic technical network characteristics

4.1.1 The FTTC-VDSL model

With FTTC-VDSL the copper access lines, which today end in the MDF locations, will be shortened and then end at the street cabinet. Over these shorter copper sub-loops, a VDSL broadband signal can be transmitted68. The street cabinets have to be

exchanged in order to be able to install DSLAMs, which terminate the electrical copper

68 The available bit rates of VDSL are very much dependent on the length of the copper line, see Wulf (2007) or Williamson et al. (2008). The advantages of VDSL regarding bandwidth over ADSL disappear at sub-loop distances of more than 500 m.

signal and concentrate it in an Ethernet protocol over fibre up to the metro core location. Ethernet switches in the metro core location further concentrate the traffic through the concentration network to the IP core network. Since the distance between the DSLAM in the street cabinet and the Ethernet switch in the metro core location is not limited by copper transmission characteristics it may be larger than before.

Many of the MDFs may be closed down, or remain as a mere infrastructure node point because of the existing duct infrastructure, and be replaced by a metro core location. We assume up to approximately 40.000 end customers to be concentrated in one future metro core location.69

In many cases street cabinets are cascaded as shown in Figure 19. Normally all SCs are connected with a fibre feeder cable in order to connect the DSLAM. But one might save DSLAMs and the replacement of the street cabinet if the sub-loop length between the street cabinets of a higher order and the end customers do not exceed about 500 m. In this case, some street cabinets of lower order may be closed down or just be kept as copper distribution frames and need not be replaced. The customers will then be connected by copper sub-loops passing through the SC of lower order to the DSLAM in the SC of higher order. In order to consider this optimization the model allows to use a reduction factor for the amount of street cabinets to be replaced and upgraded.

69 Actual planning of competitive operators consider as well metro core locations with customer concentrations of only about 10.000 customers.

Figure 19: Use of existing (unbundled) sub-loops in an FTTC-VDSL environment: illustration MDF SC SC KVZ Fibre Cu Cu X Cu Tel. Eth. X VDSL 20 M5 M DSLAM GigE SW Metro UPS Air cond. # ports = # customers Fibre Concentration at higher network layer (Metro)? Cascading of SC? Fibre # ports = # DSLAMs

high order SC lower order SC

Source: WIK-C

Starting at the end customers the model considers the cost for the Customer Premises Equipment (CPE) with an integrated VDSL port and up to 2 telephone access ports and 4 Ethernet interfaces for the customer equipment. The sub-loop to the DSLAM is rented for the regulated wholesale sub-loop unbundling fee. One time costs are taken account of by a mark up of 20%. We consider the exchange of the street cabinet, which now needs electrical power, an uninterruptible power supply (UPS) and air conditioning. The DSLAM inside will be expanded with customer port cards according to the market share reached. The maximum size of the DSLAM can be selected and support up to 480 Ports typically. The DSLAM is connected per fibre pair up to the metro core location, where the fibres pass an optical distribution frame before they are connected to the Ethernet switch. The cost for these ports in the MCL switches are the final cost component of the access network. The other cost of the MCL is considered in the cost for the concentrator network.

In the case a second mover intends to roll out a separate VDSL infrastructure he needs to collocate at, or access, the street cabinet in order to obtain unbundled access to the (copper) sub-loop. The common use of the same street cabinet can be considered by selecting a parameter. In this case the cost for the street cabinet is increased by a parameter (which might be varied, default 15%) for the cabinet and the power supply

and air conditioning (default 35%) and then divided by the two parties (50% each70).

Otherwise a second street cabinet will be installed which then has to be connected to the incumbent’s street cabinet (the street distribution frame in the SC), known as virtual collocation.

The amount of fibres needed determines the amount of fibre cables and consequently the amount of subducts needed.

In our model the standard duct infrastructure considers a trench with 2 ducts of 100 mm diameter, which is subdivided into 4 subducts, each being able to contain one cable of 148 fibre pairs. The model allows to deviate from these assumptions, if other standards have been explicitly implemented. Besides the ducts, manholes, handholes and sleeves/ bushes are considered in a parameterized manner for each of the clusters and segments. This infrastructure may be used by different usages. It is e.g.very likely that the infrastructure of the distribution area can be used for the feeder cables (between the street cabinet and the MDF site) as well and it may be used for the cables in the segment between the MDF site and the MCL (metro core location), which we call the backhaul segment. Likewise, in some parts there may exist the possibility to share the construction of trenches and ducts with other operators or utilities. The model allows to consider the common use of infrastructure independently in each of the clusters (Table 6) and for each of the three segments (distribution, feeder, backhaul).

In many countries it is not unusual to use aerial cabling in the distribution segment, notably in the less populated (e.g. rural) areas. The model allows to consider this case: there are two parameters the one denoting the percentage of homes per cluster being accessed by aerial cabling, the other reflecting if this infrastructure is used in a shared manner.

In addition, the amount of ducts being rented from others may be considered as a percentage per cluster.

For all fibre cables we do not consider pure buried cables, rather we concentrate on the use of ducts or aerial installation. The use of ducts in the distribution cable segment improves the possibility to exchange the cables in the case of repair or to add cables in the case of additional capacity needs.