S T R A T E G I C

W H I T E

P A P E R

Packet-Optical Transport
Network Transformation for Emerging Services
The explosion of packet-based services and applications is spawning a new generation of
transport products and networks using Packet-Optical Transport. The principle strength
of Packet-Optical Transport is in leveraging embedded SDH/SONET network infrastructure,
operations and expertise with a new breed of products that can gracefully migrate toward
100 percent packet traffic. These packet-optimized transport networks have the scale,
operations, resiliency, and performance characteristics to meet the rigorous demands
of emerging consumer and business applications.
Packet-Optical Transport is enabled by converging TDM, packet and WDM technologies.
Standards developments for connection-oriented packet transport also play a major role
in assuring robust transport performance for packet traffic. Packet-Optical Transport is
a powerful network transformation tool for operators migrating toward packet services
from their current SDH/SONET base.

Table of contents
1

Packet-Optical Transport market drivers

Packet-Optical Transport: an emerging market segment

Packet-Optical Transport systems provide Carrier Ethernet transport

Solutions enabled by Packet-Optical Transport

Packet-Optical Transport benefits

Leveraging todays networks

Transport Performance, Resiliency and OAM

Connection-oriented packet transport a key enabler

6 Alcatel-Lucent 1850 Transport Service Switch (TSS):

blazing the trail to Packet-Optical Transport
7

A case study in Network Transformation

Packet-Optical Transport: enabling seamless network transformation

Packet-Optical Transport market drivers

There is huge demand for new data-oriented services from all segments of the market. Residential
customers expect video, voice and Internet from both their fixed and mobile platforms, with applications such as video streaming, interactive gaming and high-speed Internet access. Theseapplications require huge amounts of bandwidth even when compared with todays standard Internet access.
Increasingly, business customers such as finance institutions are demanding high bandwidth, very
low latency and always-on services.
Industry and public sector (IPS) customers are demanding extremely resilient networks to support their
mission-critical applications. At the same time. they require high bandwidth to transport video data.
As well as requiring more bandwidth, these services increase network complexity and strain network
operations with requirements such as Service Level agreements with precise Quality of Service behavior
and measurements, low latency and low packet loss, and extremely high network resilience.
The increased revenue generated from these new services is limited and this revenue may be split between the service provider and the applications providers such as YouTube, Google and MySpace.
To support these new services,
carriers are faced with a difficult
balance. On one side, costs escalate
with increasing capacity and operations complexity. On the other side,
revenues lag behind increasing traffic
and costs. Faced with this cost/revenue dilemma, service providers must
transform their networks to reduce
the traffic transport cost per bit,
while maintaining and even increasing service quality.
Packet-Optical Transport allows
service providers to fully leverage
their existing SDH/SONET network infrastructure and operations
as they migrate their networks from
circuit-optimized to packet-optimized
transport. Emerging products and
standards can enable this network
transformation and maintain
profitable services.

Figure 1. Traffic growth compared to revenues

Traffic

More
bandwidth
More
services
Revenues

Network
transformation!

Legacy
services era

Costs

Packet
services era

Packet-Optical Transport: an emerging market segment

The transport market is rapidly moving toward packet-based services as Ethernet and IP applications
dominate the application landscape. Service providers must respond with packet-optimized networks
that provide carrier-class transport capabilities and strong operations, administration, and maintenance
(OAM) while leveraging their installed SDH/SONET infrastructure.

Packet-Optical Transport | Strategic White Paper

Figure 2. Packet-Optical Transport characteristics

The result of these market forces is
a new segment of transport products
SONET/
Packet transport
and networks using Packet-Optical
SDH/PDH
T-MPLS/MPLS-TP
Transport. Packet-Optical Transport
is in the early stages of market penTDM
Packet
etration. Vendors continue to debate
the precise definition of PacketP-OT
Optical Transport, while proposing
competing products and approaches.
However, analysts and equipment
WDM
vendors generally agree on the following Packet-Optical Transport
Wavelength
characteristics (see Figure 2):
switching
Converged support for SDH/
SONET, Ethernet packet and
wavelength division multiplexing (WDM)
Connection-oriented support for TDM and packet services
Robust, carrier-grade OAM for services and transport

Converged support for SDH/SONET and Ethernet or packet is essential because Packet-Optical
Transport systems must support both widely deployed TDM services and traffic from fast-growing
IP applications, usually carried over Ethernet. WDM support is needed to efficiently switch traffic
at the optics level. Connection-oriented packet transport, embodied in the MPLS-based transport
standards Transport-MPLS (T-MPLS) and MPLS-Transport Profile (MPLS-TP) leverages
the flexibility of MPLS with transport-oriented OAM features to assure reliable and robust traffic
streams. In addition, end-to-end OAM is critical for network and services management.
Packet-Optical Transport systems provide Carrier Ethernet transport
For carrier-class Ethernet, service providers need a resilient, scalable and flexible transport solution
that provides a high Quality of Experience (QoE). Service providers need these capabilities to be
cost competitive with existing transport mechanisms that are currently used for application and
service delivery. Key attributes recognized across standards bodies, and enumerated by the Metro
Ethernet Forum (MEF), include:
Scalability: Both in the number of services supported, such as Ethernet LAN (E-LAN) and Ethernet
line (E-line), and of bandwidth. The key to attracting enterprises to Carrier Ethernet is its ability
to vary bandwidth on demand as business needs change.
Protection: Carrier Ethernet
Figure 3. Carrier Ethernet
should offer end-to-end, 50-ms
network-wide restoration capability in the event of link or node
failure, allowing service providers
to support traditional TDM traffic.
Hard QoS: This fundamentally
changes how Ethernet is delivered.
Service providers must deliver
committed information rate (CIR)
and extended information rate
(EIR), allowing Carrier Ethernet to
underwrite their SLAs. Only then
can service providers guarantee
services with confidence.
Source: Metro Ethernet Forum

Packet-Optical Transport | Strategic White Paper

 TDM support: Provided through native support of TDM on the packet-optical system or using
TDM circuit emulation (CES) for pure packet transport
Services management: Carrier-grade service provisioning and OAM
Carrier Ethernet, as defined by the MEF, is rapidly becoming the ubiquitous delivery mechanism
for IP-based applications. Carrier Ethernet combines the traditional efficiencies of Ethernet with
carrier-class transport capabilities. Packet-Optical Transport provides a platform for service providers
to transform their existing transport network to one that efficiently provides Carrier Ethernet and
TDM transport. This platform allows service providers to provide new data services while maximizing
reuse of existing networks and minimizing disruption to existing revenue streams and operations.
Solutions enabled by Packet-Optical Transport
Carriers are exploring many solutions that leverage carrier Ethernet and other capabilities of PacketOptical Transport networks such as:
Mobile backhaul solutions: Mobile applications are the fastest growing segment in the industry.
Innovative applications drive bandwidth and require exacting, real-time performance. From
cell-site to the mobility core, networks are growing in size and sophistication. Whether mobility providers deploy their own backhaul network or buy service from a third party, the mobility
transport network must be transformed to furnish increased bandwidth at a diminishing cost per
bit. Packet-Optical Transport provides a flexible vehicle to serve todays predominantly TDMoriented backhaul with a smooth migration to packet backhaul as Ethernet becomes increasingly
available on mobile network equipment.
Triple play solutions: Operators globally are responding to customer demands with bundled voice,
data and video services. Clearly, video is the bandwidth driver for these services, and IP services are
critical to cost-effective delivery. Packet-Optical Transport can provide efficient traffic aggregation,
regardless of the access methods employed, and deliver this traffic to the appropriate service
points in the network for IP routing and other higher layer services.
Business services solutions: Business traffic is increasingly driven by high-speed applications based
on Ethernet and storage area networking. Yet businesses retain a high demand for TDM-based
services. Packet-Optical Transport, with its ability to service TDM and packet traffic, is well
suited to provide traditional, leased-line services as well as packet services.
Industry and public sector (IPS) solutions: Many large organizations in industry and public sectors,
such as utilities, government, and large corporations deploy networks for their internal missioncritical communications. These networks can be leveraged to offer services to other corporations
or government entities. Packet-Optical Transport solutions offer the flexibility to offer highbandwidth TDM and packet services to multiple customer organization with high reliability
andresiliency.
Packet-Optical Transport offers efficient, scalable traffic aggregation for packet and TDM traffic with
a smooth migration path from todays SDH/SONET networks to networks optimized for packet traffic.

Packet-Optical Transport benefits

The new breed of packet-oriented applications driving todays networks demand a level of service
and scaling that have pushed the performance limits of traditional packet networks, such as layer 3
routed networks (IP) and Ethernet. Certainly one can counter that there is nothing traditional
about todays carrier-class router and switched Ethernet networks. With the widespread deployment
of IP/MPLS networks, carriers have a proven technology available from multiple established vendors
to serve the burgeoning demand for high performance services based on IP routing. Likewise, the
rise of carrier Ethernet platforms, using MPLS and/or Ethernet enhancements standardized by
various bodies such as the IEEE and ITU-T and championed by the Metro Ethernet Forum, offers
service providers a rich set of options when building layer 2 Ethernet service networks.

Packet-Optical Transport | Strategic White Paper

The functionality of IP/MPLS and dedicated Ethernet service networks comes with a price as equipment becomes more expensive and, more importantly, operations systems and procedures become
more complex. Likewise, deployments are often overlay networks that do not take full advantage
ofthe service providers installed base.
Packet-Optical Transport melds the technological benefits of todays MPLS and Ethernet advances
with the proven reliability and operations of embedded SDH/SONET networks. A key aspect of this
approach is in structuring an efficient, packet-aware transport layer with a feature-rich, service layer
(Figure 4).

Figure 4. Packet-Optical Transport and service layers

IPTV, 3G storage, and so on

Application
User

Residential

IP edge
service/subscriber
management

Access

Service network
IP/MPLS
core

P-OT

P-OT

Core
aggregation

Metro
aggregation

Business

Fiber

Fiber

OSI layers
Protocol
richness
Bandwidth
efficiency

L7
Layer 3 (IP)
L1
CPE

Access

Efficient
aggregation

Rich subscriber,
application and
service awareness

IP routing
and MPLS
switchig

Efficient
transport

With this approach, Packet-Optical Transport devices build out an efficient, packet-aware aggregation network for metro and core transport. Packet and TDM traffic flow over this Layer 1/Layer 2
network and are delivered to the service network layer as appropriate. IP edge routers in the service
network provide higher level functions, such as deep packet inspection and other sophisticated
features, to offer service-aware application features and subscriber management.
Key advantages of Packet-Optical Transport are the ability to leverage the installed base of SDH/
SONET networks, transport operations approaches and management systems. There are also key
standards emerging for connection-oriented packet transport that combine the flexibility of packet
switching with connection-oriented transport for optimal treatment of packet and TDM traffic.
Leveraging todays networks
The ubiquity of SDH/SONET networks is testimony to the success of the products and standards
driven by the need for high capacity, and reliable and deterministic transport. With its TDM orientation, SDH/SONET met the needs of delay-sensitive, real-time traffic such as voice and provided
high bandwidth trunking for data services such as frame relay, ATM and IP router networks.

Packet-Optical Transport | Strategic White Paper

In response to the growing demand for Ethernet services, SDH/SONET platforms evolved into
multi-service provisioning platforms (MSPP), offering Ethernet over SDH/SONET (EoS). MSPPs
can provide carrier Ethernet transport with the SDH/SONET layer providing carrier-class capabilities
for OAM, manageability, and resilience. These MSPPs enjoyed tremendous success in the market
as service providers were able to leverage their installed SDH/SONET networks. The MSPP model
works well when TDM traffic is dominant, but it has scaling limitations with Ethernet traffic growth.
Packet-Optical Transport represents the next step in the evolution of the transport network as traffic
is increasingly dominated by packet services, principally Ethernet. Well-designed Packet-Optical
Transport platforms, with the ability to switch TDM and packet traffic with equal efficiency, allow
service providers to migrate smoothly from TDM-optimized SDH/SONET and MSPP transport
networks to packet-optimized transport networks.
Transport Performance, Resiliency and OAM
The IP/MPLS and Carrier Ethernet solutions for packet transport require increasing levels of performance and resiliency with the growing sophistication of their associated standards and architectural
approaches. This sophistication comes with a price as equipment becomes more expensive and, more
importantly, operations systems and procedures become more complex.
With this rich set of options the issue remains what is the optimal network transformation path
for the service provider with a large installed base of SDH/SONET, including MSPPs, and the associated transport operations infrastructure and expertise for these networks? An IP/MPLS or carrier
Ethernet approach means deploying an overlay network in addition to the existing SDH/SONET
infrastructure. This can mean duplication of services, network resources and operations systems and
personnel and potentially stranded or under-utilized resources that will drive the operators costs higher.
A Packet-Optical Transport approach allows for a smoother migration. By introducing Packet-Optical
Transport platforms, the service provider can support a mix of TDM and packet services while leveraging their existing SDH/SONET network and operations infrastructure. Packet-Optical Transport
platforms leverage existing transport-oriented OAM for service performance and resiliency and
integrate Carrier Ethernet features and innovative connection-oriented packet transport mechanisms,
such as T-MPLS, to minimize costs and complexity. For rich service features, a service-aware IP/MPLS
network can be deployed at service points rather than a wide deployment for the dual transport and
service layer roles.
This maximum leverage strategy can be implemented by deploying Packet-Optical Transport in
areas of high packet service growth to augment the existing SDH/SONET and MSPP network.
Over time, the Packet-Optical Transport platforms can be populated with higher percentages of
packet interfaces as the traffic mix migrates in this inevitable direction. The Packet-Optical Transport network, with its ability to efficiently transport and manage TDM and packet traffic, evolves
from todays mix of TDM and packet services towards the network of the future supporting feature
rich packet transport.
Connection-oriented packet transport a key enabler
Efficient transport of connection-oriented TDM traffic and connectionless packet traffic on a common
network requires a new transport paradigm: connection-oriented packet transport. Connection-oriented
packet transport combines the bandwidth efficiencies and flexibility of packet switching with TDMs
traffic routing efficiency, transport-oriented OAM and service quality assurance to create a powerful,
flexible transport network. There are two competing connection-oriented, packet transport approaches
in the industry today: the MPLS-based approach, T-MPLS/MPLS-TP, and Provider Backbone Bridging
Traffic Engineering (PBB-TE).

Packet-Optical Transport | Strategic White Paper

The goal of T-MPLS/MPLS-TP is

to provide connection-oriented
transport for packet and TDM
services over optical networks
leveraging the widely deployed
MPLS technology. Key to this effort
is the definition and implementation
of OAM and resiliency features to
ensure the capabilities needed for
carrier-grade transport networks
scalable operations, high availability,
performance monitoring and multidomain support.

Figure 5. MPLS-based transport drivers

Circuit network
SONET/SDH

Need
Standardized connection-oriented
packet transport technology

Transport operations
Ethernet and multiservices
Packet traffic growth

T-MPLS/MPLS-TP

Packet network
IP/MPLS

Following the approval of the first version of the ITU-T recommendations on T-MPLS, the IETF and
ITU-T jointly agreed to work together to extend MPLS protocols to meet transport network requirements to ensure a smooth convergence of MPLS-based packet transport technology. A Joint Working
Team (JWT) was formed between the IETF and the ITU-T to achieve mutual alignment of requirements and protocols and to analyze the options for MPLS-based transport standards progress.
On the basis of the JWT activity, it was agreed that future standardization work will focus on defining
MPLS-Transport Profile (MPLS-TP) within the IETF using the same formal requirements that drove
the development of T-MPLS. In parallel, the ITU-T will align the existing T-MPLS Recommendations
to the MPLS-TP work in the IETF.
T-MPLS/MPLS-TP share many of the same goals as PBB-TE, an effort currently in the IEEE standards
process and scheduled for ratification in the same timeframe as MPLS-TP. PBB-TE, also known as
Provider Backbone Transport (PBT), and T-MPLS/MPLS-TP are both connection-oriented transport technologies with OAM and protection capabilities. There are some important differences
between the two approaches. PBT is focused on Ethernet support, while T-MPLS/MPLS-TP supports
all client payloads. PBT supports point-to-point connections, and T-MPLS/MPLS-TP supports
point-to-point and multipoint operations. There are, likewise, some differences in supported
protection mechanisms.
While both T-MPLS/MPLS-TP and PBT are being pursued in the industry, T-MPLS/MPLS-TP
leverages the mature and proven MPLS technology. The T-MPLS standard is implemented today
and offers investment protection for the future as it will be aligned with MPLS-TP.

Alcatel-Lucent 1850 Transport Service Switch (TSS): blazing the trail

to Packet-Optical Transport
The Alcatel-Lucent 1850 Transport Service Switch (TSS) product family meets Packet-Optical
Transport market challenges. The 1850 TSS-320 was the first Packet-Optical Transport product
introduced in the industry. The Alcatel-Lucent 1850 TSS product family now spans the PacketOptical Transport network from the metro and regional core to the CPE with MEF Carrier
Ethernet certified platforms. These products include:
Alcatel-Lucent 1850 TSS-320 and its compact chassis version, the 1850 TSS-160, which share a
common software release and hardware modules: metro- and regional-core switches for backbone
and aggregation applications
Alcatel-Lucent 1850 TSS-100: a metro-edge and core switch with rich TDM and Ethernet service
features for scaling multi-service provisioning platform (MSPP) networks with a transition to
Packet-Optical Transport

Packet-Optical Transport | Strategic White Paper

 Alcatel-Lucent 1850 TSS-40: a metro-edge switch for packet-ring transport

Alcatel-Lucent 1850 TSS-5: a metro-edge and CPE switch for multi-service Ethernet and TDM
aggregation with circuit emulation services (CES) support
Alcatel-Lucent 1850 TSS-3: a CPE device for intelligent Ethernet demarcation, offering end-to-end
management and Quality of Service (QoS) support for carrier Ethernet services
Managed by the Alcatel-Lucent 1350 OMS, the 1850 TSS products enable a seamless migration from
SDH/SONET and MSPP networks to a converged, Packet-Optical Transport network that efficiently
handles todays mix of TDM and packet traffic and gracefully scales to tomorrows predominantly
packet traffic profile.

Figure 6. Alcatel-Lucent 1850 TSS

Packet/
MPLS

Universal
switching

TDM

WDM

1850 TSS
P-OT platform

The Alcatel-Lucent 1850 TSS products have been developed with attention to space utilization, power
consumption and in compliance with global eco-standards for materials and packing. These platforms
are making gains with next-generation electronics and optics components as well as software- and
hardware-driven power and cooling improvements. For example, the Alcatel-Lucent 1850 TSS-320
demonstrates a 65 percent power reduction on a power-per-transported-bit basis compared to MSPP
platforms and can save up to 50 percent floor space.
The 1850 TSS product breadth and Alcatel-Lucent innovations establish Alcatel-Lucent as the leader
in Packet-Optical Transport. The 1850 TSS core switches feature the unique universal agnostic
switch, switching TDM and packet traffic in their native formats for maximum flexibility and scale.
The 1850 TSS-320/160 implements the industrys first standards-based, connection-oriented packet
transport protocol, T-MPLS. Alcatel-Lucent has taken a leadership role in implementing MPLS-based
packet transport and is fully committed to MPLS and MPLS-TP and will continue to develop a full
range of products based on common specifications, while working closely with service providers and
other vendors to ensure interoperability.
A case study in Network Transformation
A recent deployment of the 1850 TSS by an established fixed network operator provides a demonstration of the advantages of a Packet-Optical Transport-enabled network transformation in:
Meeting rising demand for packet services
Maintaining highly profitable TDM services
Integration with existing SDH infrastructure and operations
Positioning the network for new services

Packet-Optical Transport | Strategic White Paper

This service provider had an installed SDH/MSPP base and was experiencing high growth in packet
service demand, especially in dense metro areas. In addition to business and residential services, the
provider has major positions in providing mobility backhaul, which in the near term translates into
increased E1 demands with the potential of sparking Ethernet backhaul requirements as mobility
operators begin to deploy Ethernet enabled base stations. The provider was also anxious to position
itself for entry in video and IPTV services for the future.
After considering several alternatives, the service provider chose to transform its network using the
1850 TSS, seeding the network with Packet-Optical Transport devices in high-growth areas and
taking advantage of interworking with the installed SDH base. For very high-growth and traffic
concentration areas, the DWDM capability of the 1850 TSS provides capacity and scale. At the
appropriate points, the Packet-Optical Transport network hands traffic off to an IP/MPLS network
for higher level services, thus providing cost-efficient aggregation and transport. With the 1850 TSS,
the service provider was able to keep the transport operations paradigm, allowing integration with
existing operations systems and procedures.

Figure 7. Network transformation with 1850 TSS, Packet-Optical Transport

Carrier-grade OAM, resilience and management

Internet
VoIP

IPTV

IP/MPLS
Mobile

1850 TSS

Metro
P-OT
P-OT

SDH/MSPP

IP DSLAM

Home

WDM

Business

With the 1850 TSS, this provider was able to meet high growth demands for packet and TDM services
and anticipate demand for new services. This scalable network fully leverages their existing network
and management infrastructure with no stranded resources.

Packet-Optical Transport | Strategic White Paper

Packet-Optical Transport: enabling seamless network transformation

The emerging Packet-Optical Transport market segment is driven by burgeoning IP and Ethernet
applications and services. These high-volume applications require packet-optimized transport with
carrier-class performance and OAM.
With Packet-Optical Transport, carriers can leverage their embedded SDH/SONET network infrastructure, operations and expertise in migrating toward 100 percent packet transport. These new
networks, combining TDM, packet and WDM capabilities, have the scale, OAM, resiliency and
performance to meet the rigorous demand of services critical to success in the market today and
in the future. Standards development for T-MPLS/MPLS-TP will assure robust features for OAM,
resiliency and full interworking with IP/MPLS service layers.
The Alcatel-Lucent 1850 TSS is a pioneering Packet-Optical Transport platform offering models
ranging from the metro-regional core to the customer premises. With full featured packet and TDM
services, innovative platform architectures, and carrier-class OAM and resiliency, the Alcatel-Lucent
1850 TSS family fulfills the rigorous requirements for the migration from SDH/SONET to PacketOptical Transport. Our market position and standards leadership in SDH/SONET transport and
MPLS networking make Alcatel-Lucent a good choice for moving into the future with PacketOptical Transport.

Packet-Optical Transport | Strategic White Paper

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The information presented is subject to change without notice. Alcatel-Lucent assumes no responsibility
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