Ethernet promises cheaper broadband

In the future, broadband will mean Ethernet to the home, instead of existing ADSL or cable, according to Ericsson.

However, few people have the necessary fibre-optics to their home or office, and service providers have so far based their networks on the rival ATM (asynchronous transfer mode) protocol.

On Monday, the company will launch a set of products which it hopes will smooth the way towards the all-Ethernet network, saving service providers money and letting them reach a much larger group of users at a lower cost.

"Operators are getting closer to a decision point," said Peter Linder, technical director of broadband access at Ericsson. "Will they continue the traditional rollout of ATM-based ADSL, or will they move to public Ethernet?" It's a rhetorical question: Linder is also vice president of marketing at the Ethernet in the First Mile Association, a group which promotes the all-Ethernet network, so there is little doubt where he is coming from.

Ericsson's Ethernet DSL Access is based on DSLAMs (DSL access modules - the systems which provide a DSL connection from the telephone exchange to the user) which have an Ethernet uplink to the service provider's network, instead of ATM, but provide conventional ADSL to the user, so they can be used to sell services to customers over current delivery methods (saving money by using cheaper bandwidth to the main network). They can be upgraded to delivery by Ethernet when that is available, said Linder.

Suppliers cannot grow their DSL penetration much on the existing model of $40 to $50 (£25 to £32) per month for the service, said Linder. "If they continue down this route, they will not see expansion - they will see the market softening as subscribers return to dial-up. On average, dial-up users spend less on their service than it would cost for broadband."

For service providers to shift models at this point - when they have invested in the ATM-based model for broadband delivery, have a shortage of new investment, and access is finally starting to take off - might seem unlikely, but Linder suggests running the new equipment alongside the old.

"I'm not proposing service providers disconnect subscribers on the existing model," he said. The Ethernet uplink from the DSLAM can be run on a spare fibre or, using a separate wave division multiplexing box, on one already in use by the ATM network. Instead of adding more expensive ATM channels for new subscribers, they can be put onto the new equipment, at a new lower price. Existing users will move across to the new service as their contracts run out, so the existing equipment will continue in use. "The equipment for the initial DSL rollout is nearly written off," said Linder.

The new DSLAMs are much more compact than earlier models. "It's the reinvention of the DSLAM, for a completely new price point," said Linder. "It has shrunk from a chassis to a box, to a single board that slides into the main distribution frame at the telephone exchange." This alone should save service providers money, he said. "Service providers can install it and write it off in twelve months."

To realise these ideas, Ericsson will have to take on Alcatel, currently a very strong (albeit possibly complacent) market leader in DSL provision. "Even if (Alcatel) keeps its leadership position, prices are falling so it will lose revenue," said Linder. "It is much easier for us to go after price leadership - we don't have a substantial market to defend."

He is prepared for arguments that ATM is the best way to provide the quality of service that permium services will require. "The best way to get quality of service is through bandwidth," he said. Even for applications which need quality of service, ATM cannot reach the price point and volume required. Finally, with the price of ATM links, service providers cannot afford to run contention rates that even deliver the promised quality of service.
In the longer term, more ways will emerge to deliver Ethernet to the subscriber, he said, including Ethernet over VDSL (a high speed DSL variant). Ericsson's equipment is being tried out by KPN in Holland and King.com in Southern Italy.

Peter Judge writes for ZDNet UK