The road to 40G optical networking

Optical equipment manufacturers are on the brink of releasing equipment that will pave the way to 40Gbps network transmission speeds that are four times current data rates – the equivalent of transmitting seven CD-ROMs worth of data in one second.

The promise for carriers of 40G optical networking is a lower cost per bit in sending data compared to the current 10G optical technology. Carriers may then, in turn, sell access to the capacity by emphasizing to ISPs and other customers that it will provide greater reliability and scalability for their bandwidth needs.

The corporate connection

Although the initial rollout of 40G optical equipment will offer carriers greater capacity between central offices, the potential exists for the technology to eventually spill over into the corporate market and allow users to provide services such as optical networked storage and optical VPNs – a trend that has happened before with the evolution of other networking technologies, vendors suggest.

For now, 40G optical networking is technology limited only to the laboratory and vendor demonstrations, but vendors are expected to begin selling 40G optical equipment to carriers by the end of the year, manufacturers say.

Optical networking vendors like Lucent Technologies Inc., Nortel Networks Corp., Alcatel SA, Ciena Corp. and Siemens AG subsidiary Optisphere Networks Inc. are developing the new technology, said Chris Nicoll, vice-president of telecommunication infrastructure at Current Analysis Inc. in Sterling, Va. Japanese vendors NEC Corp. and NTT Corp. also are working on 40G networks.

“I expect we will see products from all those vendors within a 30-day to 90-day window,” Nicoll said, referring to the rollout at the end of 2001. “It is going to be very competitive.”

Links between Washington and New York or London and Paris, where capacity demands are high, could be the first corridors to roll out the technology. This is because manufacturers of the 40G equipment say the capacity demand already exists between some major cities, but the demand for high-octane optics is not present in large sections of the U.S. and other parts of the world.

“Has anyone in the Dakotas asked for OC-192 (10Gbps optical technology)?” commented one U.S. carrier representative when asked about the need for greater capacity. “No. The demand is not there,” acknowledged the official, who asked not to be named.

Back to the basics

Fibre-optic technology sends data with the aid of light impulses across glass or plastic wire or fibre. Fibre optics are used as the conduit to send data from one central office to another in metropolitan areas or long distances from a central office in one city to one in another.

A basic point-to-point fibre-optic transmission system requires the following: an electro-optic transmitter, which generates optical bits from electrical bits; an optical fibre to transport the bits; and an optoelectronic receiver to convert the bits back to the electrical. If a signal is travelling a long distance, amplification of the signal is required at regular intervals.

Optical-electrical-optical (OEO) regenerators also are put in place if signals are travelling over a couple hundred kilometres. They grab the signal, bring it back into its electrical form, reshape and re-amplify the signal and send it back on its way to its destination.

The base data transmission rate for fibre optics is called OC-1 or Optical Carrier-1 and it sends information at a rate of 51.84Mbps. An OC-1 line provides a connection nearly 100 times faster than a 56.6Kbps modem.

Many carrier companies these days have OC-192 links in place and they offer a 10Gbps data rate. Products for OC-192 networks are well developed and most carriers have completed or are in the midst of implementing OC-192 networks, according to industry analysts. The 40G standard is referred to as OC-768.

Cutting-edge Canadians

According to one analyst, Canada is well-positioned to implement the most cutting-edge technologies because we have a demography that is ideally suited to rolling out innovative products. Rolling out a fibre optic network to every community with a population exceeded 50,000 people, in any country, is akin to playing a game of connect the dots, says Iain Grant, managing director for the Seaboard Group, a Brockville, Ont. consultancy.

“If you play it with every U.S. city over 50,000 people, it’s an interesting spider’s web you end up with,” he said. “You can appreciate the complexity and magnitude of investment to play that game. If you play connect the dots with all Canadian cities over 50,000 people, you end up with a straight line, which means our national backbone is far easier to build and over-build, with far less money. So we’re there first.”

This unique dispersement of cities, Grant added, has already created some interesting rollouts of fibre technology, ones not seen anywhere else.

“It allows things like the phenomenon we’re seeing in Saskatchewan, where SaskTel is offering DSL services to communities (with populations) as small as 2,000. This is light years ahead of anywhere else on the planet. Is it tough to dig ditches in the Canadian Shield? Sure. But once you’ve got over that, it’s a very interesting demographic.”

That isn’t to say, however, that Canada is not faced with the challenges of every other country in its deployment of fibre technology, both standard strands like OC-192 and cutting edge cables like 40G. Grant points to the problems encountered in laying fibre optic lines in urban environments as an example.

“It’s difficult to build (in cities) and it’s expensive,” he said. “The various municipalities are getting a little pissed off that every time they put a road in, it gets dug up six weeks later. Construction engineers will tell you that a road should last 20 years. Every time you dig it up you cut the life in half.”

The end result is that municipal budgets eventually get affected.

“Who pays for that? You and me in our city taxes. That’s sort of a hidden cost of all of this.”

Hurdling the obstacles

Each leap in fibre-optic transmission speed has come with new challenges, and the jump to 40G optical over a single wavelength is no different, as it offers both technical, financial and even marketing obstacles.

On the technical side, 40G optical networking requires the pulses of light that send the signal across the fibre to be closer together. When the signals are closer together, there is greater chance for signal degradation to interfere with another signal on the fibre, said Will Russ, Optisphere’s senior manager of solutions marketing. As the signal moves along the fibre, it must be cleaned up and amplified to keep it in its truest form.

The fibre used to send the 40G signal also must be more refined to reduce distortions over long distances, Russ said. Some existing fibre-optic cable that was laid during the 1980s and into the early 1990s in the U.S. may not be ideally suited for use with 40G technology because of its inability to keep a signal pure. A problem known as polarization mode dispersion (PMD) can occur which causes pulse dispersion and, ultimately, affects transmission quality.

Financial challenges of 40G optical networking are similar to the ones that arose with the development of 10G technology, said Scott Andrews, chief executive officer for Picosecond Pulse Labs in Boulder, Co., which makes optical components for companies like Corning Inc. that enable high speed conversion from electrical to optical and back to an electrical signal.

Carriers that buy 40G optical equipment would typically be looking for a cost-benefit model that provides they gain four times the network capacity compared to 2.5 times the cost of the company’s existing OC-192 network, Andrews said.

At this time, the financial model appears to be more costly than typically desired to gain the increased capacity.

“It will not be adopted in a broad way until the economics make sense for the carrier,” Andrews said. “The model, in my opinion, will be viable in the next two or three years. Look at 10G. When Nortel first came out with OC-192, the model wasn’t there and they had to push the technology benefit. You are faced with the situation today that it is not economically viable. I don’t see the hurdles (for 40G optical networking) as insurmountable “

Over the long haul…

Developing a network is not something that happens overnight, and optical network equipment vendors will have to prove to carriers that the investment in 40G equipment is worthwhile, Nicoll of Current Analysis said.

The rollout of 40G is more likely to begin in the long-haul transmission space, which is from city to city. Nicoll said he believes it will be first seen there because the metro market is more cost sensitive. By starting in the long-haul space, carriers can spread the costs of the new networking equipment over a bigger user base, he said.

“We will see some sort of trials at the end of the year,” he said. “We will see service provider implementation by carriers in the second half of next year.”

Initial implementations of 40G equipment are expected to let carriers use existing 10G technology, Nicoll said. Four OC-192 signals will be streamed over a single 40G wavelength to provide greater service economics, he said.

Still, adoption of 40G optical networking could be slowed by the current industry spending slowdown and carriers buying the latest 10G gear that can offer 1.6 terabits-per-second capacity using DWDM (Dense Wavelength Division Multiplexing) on a 10G line with 160 channels, said Sterling Perrin, a research analyst with International Data Corp. Although companies like Lucent and Nortel say they will roll out 40G optical networking equipment by the end of 2001, it may be 2003 before the true adoption of 40G begins, he said.

“Ultimately it boils down to the fact that people are only going to adopt 40G if it makes economic sense,” Perrin said.

– with files from Greg Enright