The All-IP Broadband Network:
What The U.S. Can Learn From The Rest Of The World
BY DAVID HOWARD
Leading up to the NASDAQ crash of April 14, 2000, it seemed as though
everyone was focused on IP technology as the way to bring broadband Internet
access to individual consumers and businesses. But there were conflicting
opinions when it came to figuring out how to make money on IP. After the
crash, it became clear that IP alone was not sufficient to create a
sustainable business. Lacking coherent business plans, many of the CLECs
that had led the charge for IP-based DSL broadband services in the U.S.
RBOCs stepped into the void left by the CLECs. However, as guardians of
the U.S. telecommunications structure and legacy, the RBOCs have been
reluctant to cannibalize their existing services for the sake of new
services or to introduce relatively unproven technologies into their
networks. Even today, DSL in the U.S. is used mainly for basic Internet
access. Yet service providers in Asia are taking advantage of IP-based DSL
to offer Internet access as well as a host of profitable, low-cost broadband
applications on a wide-scale, including mass deployments of VoIP and TV over
The Evolution Of A Success
The emergence of Yahoo! BB, a Japanese CLEC, typifies the evolution of a
successful broadband provider. In early 2001, broadband service in Japan was
in its infancy, with fewer than 200,000 DSL subscribers. Yahoo! BB addressed
the underserved broadband market with an always-on, low-cost,
high-bandwidth, multi-application ADSL service available over ordinary
telephone lines. The company introduced its first service, an 8-Mbps ADSL
data service priced at $19 a month, in September 2001, and added BB Phone,
for a basic fee of $3 a month, in early 2002. In July 2002, Yahoo! BB
upgraded its data service to 12 Mbps, which costs subscribers $20.75 a
month, and in March 2003 introduced its TVoIP service, Yahoo! TV, for an
initial subscription fee of $82 and a basic monthly charge of $20.
In only 18 months, Yahoo! BB became the largest DSL provider in Japan, with
2.3 million subscribers and a 30 percent share of the market. More than
two-thirds of Yahoo! BBï¿½s data users now subscribe to BB Phone. The company
also became the first competitive carrier in the world to surpass the
incumbent provider in market share, signing up 40 to 50 percent of all new
DSL subscribers in Japan.
The companyï¿½s business strategy, which calls for it to be the first to
market with the latest applications at the lowest price, is crucial to its
immense success. Yahoo! BB uses the latest technology to stay six to 12
months ahead of the competition, and looks for savings in every aspect of
its business while taking a creative approach to distribution and marketing.
U.S. service providers looking to protect existing subscribers and their
revenues from cable operators and cellular service operators can learn much
from Yahoo! BB.
Pass ATM, Go Directly To IP
Rolling out nationwide DSL service requires a high initial capital
investment. To minimize that investment as well as on-going operating
expenses, Yahoo! BB built a nationwide backbone based on dark fiber and an
all-IP infrastructure that provides a simpler access and backbone network
than does a traditional ATM-based infrastructure. Central to the network is
an IP-based DSLAM from UTStarcom, the AN-2000 IB. A high-density,
non-blocking, easy-to-deploy solution, the AN-2000 IB delivers high-speed
Internet data, voice, and video services over a wireline network. Because
the UTStarcom platform provides IP from the ADSL line card, Yahoo! BB can
provide a pure IP backbone network comprised solely of IP switches and
An all-IP infrastructure is less complex, less expensive, and easier to
deploy than an ATM infrastructure. It is also far more efficient to
transport IP packets over an IP infrastructure. As a result of these and
other factors, Yahoo! BBï¿½s IP backbone was only one-tenth the cost of an ATM
backbone, but it offers ten times the speed -- and accelerates time to
All-IP also enables Yahoo! BB to create a hierarchical network that broadly
distributes bandwidth, thus increasing performance in the DSLAM and
backbone. ATM-based DSLAM networks tend to groom all network traffic across
a backbone to a centralized broadband remote access server (B-RAS). The
B-RAS acts as an IP keyhole entry and exit to and from subscribers -- and as
a bottleneck to quick delivery of broadband services.
The UTStarcom platform also helps Yahoo! BB realize remarkable savings in
operating costs. Because the AN-2000 IB is rack efficient, Yahoo! BB saves
money in co-location charges. Energy costs are $3 less per month per
subscriber, and ease of installation reduces costs by $3 per port.
Yahoo! BB has also realized savings by simplifying network operations.
Typical ATM-based DSLAM deployments require per-access subscriber
authentication, so the operator has to maintain a subscriber database.
Yahoo! BB eliminated the need for such a database by capturing all the
information needed to ï¿½authenticateï¿½ the customer -- telephone number,
billing address, and the identification of the DSL modem, which Yahoo! BB
provides -- at customer sign up. Thereafter, the company does not need to
authenticate subscribers every time they access the network.
Service providers in the U.S. and other countries can gain similar savings
from an all-IP network -- and they can translate those savings into more
attractive prices for their applications.
Engineering The Network For Bandwidth Requirements
As service providers look to expand their broadband services, they must
consider how much bandwidth the applications they want to offer will
require. Bandwidth drives decisions about the access network, application
technology, and backbone requirements. Available bit rate has increased over
time, while the bandwidth required by applications has decreased. The
bandwidth required for DVD-quality video, for example, has declined from 4
Mbps (MPEG-2) to 1.5 Mbps (MPEG-4). Service providers need to understand
where available bit rate and application bandwidth demand intersect to
determine what equipment they need to deploy and thus optimize their
Although application bandwidth requirements are decreasing, there are limits
to service providersï¿½ ability to deliver service to all potential
subscribers over the existing copper infrastructure. Higher bit rates demand
shorter copper loops. ADSL can reach customers up to 18,000 feet from the
central office (CO), while higher-bandwidth ADSL2+ services can only reach
customers that are no more than 5,000 feet from the CO. Downstream bit rates
up to 50 Mbps will require loop lengths of 4,000 feet or less.
In highly urbanized Japan, the majority of the population is served by short
loop lengths that can be reached from the CO. In the U.S., where suburban
sprawl is the norm, many subscribers are served by long loops and cannot
receive higher-bandwidth services that are available only over short loops.
U.S. providers that want to capture the largest possible number of
subscribers will thus need to consider installing DSLAMs in the outside
plant (OSP), and equipment vendors are developing DSLAMs specifically for
these locations. This development will make multiservice DSL more attractive
to U.S. service providers by enabling them to attain greater market
Applications And Distribution Keep Company At Forefront
Yahoo! BB relies on its all-IP network and IP DSLAMs to stay ahead of the
competition when it comes to offering the advanced applications that are
central to its business plan. Yahoo! BB is also deploying softswitches in
their network to enable rapid service and application delivery.
An innovative distribution model is also instrumental in the rapid and
widespread uptake of Yahoo! BBï¿½s DSL service. To reach as many subscribers
as quickly as possible, the company realized that a modem and Internet
service had to be as easy to purchase as a carton of milk. To this end, the
company has set up distribution channels with 7-11, the most popular
convenience-store chain in Japan; with coffee shops such as Mister Donut and
Starbucks; and with bookstores.
Even more innovative -- and extremely effective -- is Yahoo! BBï¿½s giveaway
program. Many Yahoo! BB subscribers in urban Japan have quite literally
picked up their DSL modems on a street corner, from a promotional stand.
Armed with pen and clipboard, Softbank representatives use the offer of a
free modem to lure passersby to sign up for service right there on the
sidewalk. The representatives are equipped with cell phones, allowing them
to call in and quickly validate the potential subscriberï¿½s residential phone
number. The newly registered subscribers walk away with a modem that they
can take home to self-install.
Learning From A Leader
While there are great differences between the Japanese and U.S. markets,
there is much U.S. service providers can learn from the success of Yahoo!
BB. An all-IP network offers significant savings in both capital and
operating expenses when compared to an ATM network. Carefully tailoring
bandwidth to the requirements of applications and simplifying network
operations can further reduce costs. Keeping the business focus on
applications -- and being nimble enough to be the first to offer important
new applications -- is crucial to gaining and keeping market share. A
distribution model that reaches out to potential subscribers at places where
they ordinarily do business also helps accelerate market growth. Service
providers anywhere in the world can implement these principals to attract
and retain customers, reduce churn, and improve the bottom line.
David Howard is product manager at
UTStarcom, Inc. UTStarcom is a leading global provider of wireless and
wireline access and IP switching solutions. The company designs,
manufactures, sells, and installs an integrated suite of future-ready access
network and next-generation switching solutions.
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