The Local Exchange Network
in 2015
20th Annual ICFC Conference
An International Communications Conference for
Marketing, Forecasting and Demand Analysis
June 2228, 2002
San Francisco, California
Lawrence Vanston,Ph.D.
President
Technology Futures, Inc.
13740 Research Blvd., Bldg. C • Austin, Texas 78750-1859 U.S.A.
(800) 835-3887 or (512) 258-8898 • Fax: (512) 258-0087 • www.tfi.com
Copyright © 2001, Technology Futures, Inc.
Basic Conclusion
• By the end of 2015, we will have
transformed the local exchange from a
narrowband network of circuit switches
and copper cable to a broadband network
of packet switches and fiber optics.
Copyright © 2001, Technology Futures, Inc.
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The World of 1986
Household PC Penetration: <1%
Household Online Penetration: 0%
Office LAN Connections (% of PCs): 6%
Typical Modem Speed: 1.2K
Typical PC: 286(XT)
Typical Hard drive: 20 Meg
Cellular Penetration (% of pop.): <1%
CDs (% of Recordings): 7%
Copyright © 2001, Technology Futures, Inc.
3
The LEC World of 1986
Digital Switching (% of lines): < 17%
Fiber Interoffice (% of circuits): < 12%
Fiber Feeder (% of lines): < 1%
SONET Penetration: 0%
ATM & IP Switching Penetration: 0%
Copyright © 2001, Technology Futures, Inc.
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The Local Exchange Network
2015—Outline
•
•
•
•
•
•
•
•
Broadband Internet Access
Video
Wireless
Competition Overview
The Outside Plant
Circuit Equipment
Switching Equipment
Summary
Copyright © 2001, Technology Futures, Inc.
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Technology Futures, Inc. (TFI)
Created 1978
• Forecasting
• Market Assessment
• Strategy
• Planning
• Consulting
• Research • Seminars • Publications
TFI Mission: To help you take advantage of
technological progress and market opportunities.
Copyright © 2001, Technology Futures, Inc.
6
Telecommunications Technology
Forecasting Group (TTFG)
TTFG promotes the understanding and use of
forecasting to predict and support the
continuing evolution of the public
telecommunications network
• Bell Canada
• BellSouth
• Qwest
• SBC Communications
• Sprint-LTD
• Verizon
Copyright © 2001, Technology Futures, Inc.
7
Broadband Internet Access 2015
Built for Speed...
• 88% of Households online
• 82% of Households on Broadband
• 50% of Households at 24 Mb/s
• 28% of Households at 100 Mb/s & above
Copyright © 2001, Technology Futures, Inc.
8
U.S. Adoption of Broadband Access
Percentage of U.S. Households
2000 Forecasts
100%
90%
80%
70%
Online Households
60%
50%
40%
30%
High-Speed Households
20%
10%
0%
1990
1995
2000
2005
2010
2015
2020
Year
Copyright © 2001, Technology Futures, Inc.
9
U.S. Adoption of Broadband Access
100%
Pct of Households
90%
80%
70%
Online Households
60%
50%
40%
High
30%
BB Households
20%
10%
0%
1990
1995
2000
2005
2010
2015
2020
Year
Copyright © 2001, Technology Futures, Inc.
10
Broadband Access by Data Rate
100%
Pct of U.S. Households
90%
80%
Maximum copper
lengths
shown in italics.
70%
1.5 Mb/s & Above
60%
100 Mb/s
& Above
50%
24 Mb/s
40%
6 Mb/s
30%
12 kft
3.7 km
20%
3 kft
0.9 km
1.5 Mb/s
10%
18kft
5.5km
0%
1995
2000
2005
2010
2015
2020
Year
Copyright © 2001, Technology Futures, Inc.
11
Data Rate Increases for Analog
Modems and Broadband
100000.0
96000
Broadband Speeds
(r=41% )
6000
Performance Increases
4 times every 4 years.
10000.0
1500
1000.0
Data Rate
24000
100.0
56.0
28.8
14.4
9.6
10.0
Analog Modem Speeds
(r=40% )
2.4
1.2
1.0
0.3
0.1
1980
1985
1990
1995
2000
2005
2010
2015
Year
Copyright © 2001, Technology Futures, Inc.
12
Computer Systems Policy Project
includes Dell, Compaq, HewlettPackard, Motorola,IBM, Intel,
NCR, EMC, and Unisys
“...today’s typical digital subscriber line (DSL) and cable modem
speeds, at less than 1 Mbps, are not fast enough to realize the full
potential of emerging applications.”
“...the benefits from widespread, affordable, nextgeneration
broadband wll be significant. The advances in medicine,
education, national security, commuting, home entertainment and
shopping will bring dramatic improvements to our quality of life.”
Building the Foundation of the Networked World, A Vision for 21st
Century Wired and Wireless Broadband, CPSS, Washington, January 2002.
See ”reports/networkedworld.pdf”.
Copyright © 2001, Technology Futures, Inc.
13
Computer Systems Policy Project
...Continued...
“Regardless of the current definitions of broadband, the data
transmission methods currently considered broadband will be
inadequate to satisfy consumer and business demand for next
generation, valued applications. Speed is critical. Videoon
demand provides a useful example...To provide streaming video
using DVDquality video, a provider would need to achieve
transmission rates of almost 4 Mbps, and high definition video
requires 19.8 Mb/s. Some experts set the frontier for highspeed
access to highquality, digital, skipfree audio and video as high as
100 Mbps.”
Copyright © 2001, Technology Futures, Inc.
14
Computer Systems Policy Project
...Continued
“ By yearend 2003, 80 percent of U.S. homes
should be able to get at least 1.5 Mbps capacity
and 50 percent of U.S. homes should be able to
get up to 100 Mbps affordable broadband
capacity.”
Copyright © 2001, Technology Futures, Inc.
15
TechNet
includes Cisco, 3Com and Palm, Genuity, Intel, Microsoft, and
Excite@Home
“TechNet calls on the President and policymakers
to make broadband a national priority and to set a
goal of making an affordable 100megabits per
second broadband connection available to 100
million American homes and small businesses by
2010.”
A National Imperative: Universal Availability of Broadband by 2010,
TechNet, January 2002. See />0115.64.pdf.
Copyright © 2001, Technology Futures, Inc.
16
TechNet
...continued
“...policies should encourage the availability of
broadband at speeds of at least 6 Mbps from two
or more providers to at least 50 percent of U.S.
households and small businesses by 2004. This
goal will enable highbandwidth applications
including DVDquality video, file sharing and
peertopeer computing.”
Copyright © 2001, Technology Futures, Inc.
17
Video 2015
• People still watch lots of TV.
• Traditional delivery channels still deliver.
• Video streaming is mainstream.
• 2 of 3 North American households have Digital
TV (many HDTV).
Copyright © 2001, Technology Futures, Inc.
18
U.S. Households with Digital TV
100%
Percent age of U.S. HHs
90%
80%
70%
2001 TFI Forecast
60%
50%
40%
30%
2001 CEA Forecast
20%
10%
Historical Data
0%
1995
2000
2005
2010
2015
2020
Year
Copyright © 2001, Technology Futures, Inc.
19
Wireless 2015
• 90% of North Americans are wireless users.
• Wireless has displaced wireline for voice and lowspeed data.
• 70% of NA Households no longer have standard
wireline telephone connection.
• Most wireless users are on 2.5/3G systems
• Wireless LANs prevalent in homes, offices, and
public places
Copyright © 2001, Technology Futures, Inc.
20
Percentage of North American Population
North American Subscribers by
Cellular Generation
100%
90%
80%
Total Cellular/PCS
Subscribers
70%
60%
2.5G / 3G
(Voice/Data)
50%
40%
1G (Analog)
30%
2G (Digital)
20%
10%
0%
1990
1995
2000
2005
2010
2015
2020
Year
Copyright © 2001, Technology Futures, Inc.
21
Competition 2015
Copyright © 2001, Technology Futures, Inc.
22
Competition for Narrowband
Access Lines
140
Millions of Lines
120
Wireless
100
80
60
Cable
ILEC
40
20
0
1995
Resale & UNE
2000
2005
2010
2015
2020
Year
Copyright © 2001, Technology Futures, Inc.
23
Major ILEC Switched Access Lines
Year Business
1996
49.1
1997
52.7
1998
55.5
1999
57.9
2000
58.4
2001
53.3
Payphone
1.4
1.8
1.8
1.8
1.7
1.4
Residential
103.4
107.4
111.2
114.4
113.7
110.8
Mobile
0.1
0.1
0.1
0.2
0.0
0.0
Total
154.0
162.0
168.6
174.2
173.7
165.5
Copyright © 2001, Technology Futures, Inc.
24
Cable Telephony on the Rise
• U.S. Cable Telephony Subscribers
– 1999
– 2000
– 2001
198,000
850,000
1.5 Million
• In Orange County, California COX Digital
Telephone has achieved 24% total market
penetration
• In Chicago, AT&T Broadband has reached 18%
penetration overall and 40% penetration in some
suburbs
Copyright © 2001, Technology Futures, Inc.
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