LG-Nortel pushes first mile technology

In their fight with cable companies for broadband customers, telcos and service providers have often been at a speed disadvantage. But after years of testing an unpowered fibre-to-the-premises technology is coming to market which may help them at least keep up.

Called Wave Division Multiplexing Passive Optical Network, or WDM-PON, it uses unpowered optical splitters to let a single optical fibre serve multiple premises. LG-Nortel, a venture between Nortel and LG Electronics, became one of the first to announce a customer last week when it said service provider UNET of Holland will use its Ethernet Access solution to deliver high speed connectivity to businesses and homes across the Netherlands.

“We have a solution for the next 20 years,” boasted LG-Nortel president Peter MacKinnon in an interview.

Its WDM-PON was developed at LG-Nortel labs in Korea, where it has been been sold to carriers for the last 18 months, he said. As more carriers bring fibre direct to the premises, he said, the time is right to make the solution available for sale in other markets.

That’s the sticking point. A number of carriers, including Bell Canada and Telus, have decided – for the time being at least – to bring fibre only to the node rather than the customer and leave copper wiring the rest of the way. Verizon, in the U.S., is one of the few North American carriers to be spending billions putting fibre to homes.

“I don’t see demand is there yet in North America,” said Iain Grant, managing director of the SeaBoard Group, a Montreal-based telecommunications consultancy. Verizon, he said, may have a few neighborhoods where customers are pushing the limits of bandwidth-filling services such as IPTV or video conferencing, but not many. “Maybe a year to 18 months down the pipe or so.”

As fibre gets deeper into carriers’ networks and end-user high bandwidth solutions are being sought, the WDM-PON solution will be very attractive, he said. But right now carriers are trying buy time by managing demand with usage caps.

Erik Keith, an industry analyst with Current Analysis said the technology may have another problem. “With WDM-PON the cost of transmission lasers is something a lot of operators may balk at at this early stage. The Nortel solution, even it if is robust, could be more expensive than some operators are willing to invest in.”

Customers will also be wondering how committed LG-Nortel is to the technology after Nortel – which owns 51 per cent of the joint venture and is selling the solution – said its Metro Ethernet division is up for sale, which includes carrier Ethernet products.

A Nortel spokesman said the company won’t comment on what might be sold. However, she did emphasize that the Ethernet Access solution is an LG-Nortel product.

MacKinnon insists the technology is a money-saver. Operators tell him WDM-PON can reduce the number of central offices by half. “One of the huge advantages of this is because it’s a passive optical network it allows you to remove considerable active electronics out of your network,” he said. Once fibre is laid to premises and a WD-PON solution put in, there’s no reason to go back to premises to replace equipment for years.

The LG-Nortel solution includes the Ethernet Access Service Terminal 1100, a 19-inch wide, 10U high rack mount chassis in the central office that holds the PON interface cards. The cards deliver 32 dedicated wavelengths of 100-Mbps bandwidth per end-user. There are also colourless termination units for either businesses or homes.

Many major equipment makers are looking at WDM-PON technology, Keith said, although most still are in laboratories.