Fiber To The Desk: Where Is It Cost-Effective Today?

Where Is It Cost-Effective Today?
Eric R. Pearson, CPC, CFOS President, Pearson Technologies, Inc. TIA Fiber Optics LAN Section
Fiber to the Desk
Copyright 2003, Telecommunications Industry Association.
Agenda
Fiber to the Desk, Where Is It Cost-Effective Today?
Expanded TIA Fiber Optics LAN Section scope Cabling market review & forecast Comparing fiber installed first costs with copper
TIA Fiber Optics LAN Section

Background and Mission
Formed in 1993 as part of TIAs Fiber Optics Division Members include: 3M, ADC, Berk-Tek, CommScope, Corning,
Fluke Networks, Leviton Voice & Data, OFS, Optek Technology, Ortronics, Pearson Technologies, Panduit, Sumitomo Electric Lightwave, Transition Networks, Tyco/AMP Electronics
Original mission: To create a resource where people can learn

about the technical advantages and affordability that optical transmission brings to customer-owned networks
Expanded Focus
Result of Target Audience & Member Input
Fiber-based LANs Storage area networks Data centers Industrial applications Building automation systems Fiber in security systems Fiber in the home
TIA Fiber Optics LAN Section

Many Resources Available
Webcasts Presentations at industry conferences Trade press articles Enterprise fiber case White papers histories Press releases Equipment directories Editor briefings Stimulate complementary
standards development Interoperability demonstrations
www.fols.org
Market Trends
Copper and Fiber Cable Shipment Forecast*
Late 90s: double digit

enterprise cabling growth due to UTP LAN installations in large enterprises 2001-2002: 20% declines in enterprise cabling market 2003: Flat market with slow recovery late in year 2003-2008
$Billion 3 3 3 3 3 3 3
3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3
33 . 33 . 3 33 . 3
. 33 33 .
Single digit growth for UTP Double digit growth for fiber
Total Cabling System Forecast $(B)

*Source: US Building Fiber & Copper Cabling Systems FTM Consulting, February 2003
Copyright 2003, Telecommunications Industry Association. 6
Fiber-Copper Cable Shipments

Cable Product Value Shipments
2001-2003
Copper cable still dominant Declining market Declining copper cable prices
2004-2007:
Major shift to fiber cable
Major fiber applications

Gigabit Ethernet Fiber to the zone Fiber to the desk Storage area networks
Source: FTM Consulting
Selecting the Horizontal Media

UTP Copper or Multimode Fiber?
UTP Copper
3 Perceived lowest system cost 3 The easy choice 3 Almost universal installer familiarity 3 Smooth Ethernet upgrade path More complex to install & test 3 Susceptible to EMI, RFI & crosstalk 3 Limited cable pull strength 3 100 meter maximum @ 1 Gbps 3 Shorter useful life
Multimode fiber
3 Higher bandwidth 3 Simplified installation 3 Significantly reduced testing costs 3 Lower life-cycle infrastructure costs 3 Smooth Ethernet upgrade path 3 Immunity to EMI, RFI & crosstalk 3 Superior cable pull strength 3 Reduced initial installed costs with centralized architecture 3 Perception of complexity 3 Less installer familiarity 3 High priced electronics
So, Why Not More Fiber?

Are Costs Really Higher?
Perception: fiber is still more expensive than copper Erroneous assumption: fiber networks should be
designed exactly like copper networks Reality: fiber electronic capabilities allow the network cost to be reduced in many applications-by tens of thousands of dollars. In these applications, UTP is too expensive to justify! Reality: network lifecycle costs not the primary driver
Comparing Fiber - Copper Costs

Several Comprehensive Studies Tolly Group, August 2000
Migrating to Fiber-The Case for Centralized LAN Cabling Still available for download #200505 http://www.tolly.com/UTS/UTS_home.aspx (page 8)
TIA/EIA-568 B issued
Revision B includes the collapsed backbone, or FTTD network
TIA Fiber Optics LAN Section, November 2001

First generation cost model Very popular download from FOLS website
TIA Fiber Optics LAN Section, July 2003

Second generation cost model Available for download as of September 19: www.fols.org Also visit Pearson Technologies web site: www.ptnowire.com
10
Second Generation Cost Models

Significant Market Changes
Decreased UTP component prices Decreased Fiber cable and connector prices Decreased Fiber transceiver prices
Long wavelength (1300 nm) decreases substantial Short wavelength (850 nm) also decreased
Decreased overall network costs

UTP-fiber All fiber
11
Centralized Fiber Architecture

Designed for fiber (300 meters)
No electronics
SPLICE OR INTERCONNECT
Electronics
WORK AREA
TELECOMMUNICATIONS ROOM
HORIZONTAL
PATCH OUTLET CORD PC
IO
H I G H C O U N T R I S E R S SINGLE POINT CROSS CONNECT HOME RUNS
Electronics
HOME RUNS ACTIVE EQUIPMENT PATCH CORDS
EQUIPMENT ROOM
PATCH CORDS
Standardized in TIA/EIA-568-B.1 & ISO-11801, 2nd Edition

12
Hierarchical Star, Optimized for UTP Copper (333 Meter Limit)

Electronics
HORIZONTAL CROSS CONNECT
Cabling System Architectures

TELECOMMUNICATIONS ROOM WORK AREA
PC
HORIZONTAL
OUTLET
PATCH CORD
PATCH CORDS
ACTIVE EQUIPMENT
Electronics
L O W C O U N T R I S E R S
H I GR H I S CE R O US N T PATCH CORDS
Electronics
MAIN CROSS CONNECT
ACTIVE EQUIPMENT PATCH CORDS
EQUIPMENT ROOM
13
Installed First Costs Model Assumptions

Hierarchical Star UTP vs. Centralized Fiber
Building model
8 story, 48 ports/floor Costs calculated on per port basis Port utilization
Copper: 70% Fiber: 90%
Horizontal subsystem
UTP: Cat 5e or Cat 6 UTP Fiber: 62.5 or 50 m multimode fiber
Riser subsystem
Fiber used in riser subsystem (both models)
14
Comparing Installed First Costs

Additional Assumptions
Loaded labor rate

$60.00/hour [median value]
Telecom room construction costs

$150.00/ft2 [median value]
5 year power costs

Lighting, heating & cooling Does not apply to centralized fiber network Estimated at $450 for 5 years
Cost models completely interactive
15
Telecommunications Room Costs

Significantly Less Expensive With Fiber
UTP/Fiber UPS
Temperature control Telecom room size Telecom room cost
All Fiber
Not required Not required
$1,000 $10,000 6x10 $9,000 $20,000
6x5 $4,500 $4,500
Total cost
Equipment to heat and cool electronics is costly.

Key Point
Model has a major bias against fiber ($93.75/port)! Twelve out of twelve scenarios had the same result
Initial installed fiber cost lower than initial installed UTP/fiber cost
Significance: fiber is cost effective in many scenarios; Network planners should calculate their fiber network
cost with the model to find opportunity for cost reduction
17
Multiple Scenarios Examined

Second Generation Cost Models
1. 2. 3. 4. 5. 6.
SG, list price SG, 80% of list price K-12 Fiber to the zone Tier II electronics, street Tier I electronics, mixed price sources
7. Tier I electronics, reduced

cost switch
8. 9. 10. 11. 12.
Cat 6 Tier I cable Cat 6 Tier II cable Low cost solution 100BASE-SX, list price 100BASE-SX, street price
18
Cost Summary, SG at List Price

Scenario 1
SG is the Generic name for Volition, or VF-45

connector and electronic fiber system
SG components have one of lowest fiber costs With SG at list price, the fiber network saves
$16,037.10 $41.79 /port 6.2%
19
SG at List Price : Details

SG List Price
Materials/Node ($)
UTP/fiber All fiber $151.04 8.40 93.75 328.06
Labor ($)
UTP/fiber fiber $25.03 0.41 0.63 0.46 All
Desktop to telecom $216.10 room Fiber in & to telecom room Support costs Equipment room
$35.00 0.00 0.00 20.00
0.90 426.04 8.47
Total cost per port
678.04 636.25
20
SG at Street Price
Scenario 2
Assumes 80% of list price With SG at street price fiber network saves:
$38,970.43 $101.51 /port 15%
21
SG At Street Price: Details

SG 80% of List Price
Materials/Node ($)
UTP/fiber All fiber $151.04 8.40 93.75 268.34
Labor ($)
Desktop to telecom $216.10 room Fiber in & to telecom room Support costs Equipment room
$35.00 0.00 0.00 20.00
0.90 426.04 8.47
Total cost per port
678.04 576.53
22
Tier II Switch, Street Price

Scenario 5
Tier II switch at street price

Tier II switch is not from dominant manufacturer
Fiber network saves

$48,290.59 $125.77 /port 20%
23
Tier II Switch, Street Price: Details

Tier II Electronics Street Price
Desktop to telecom room Fiber in & to telecom room Support costs Equipment room
Materials/Node ($)
UTP/fiber All fiber 163.83 0.90 426.04 13.21
Labor ($)
UTP/fiber fiber 25.03 0.41 0.63 0.46 All
182.43 14.13 93.75 159.43
35.00 0.00 0.00 20.00
Total cost per port
630.51 504.74
24
Tier I Switch Plus Other Electronics

Scenario 6
Switch is from a dominant manufacturer Electronics are from various sources Fiber network saves
$52,026.13 $135.49 /port 21%
25
Tier I Switch Plus Other Electronics: Details

Tier I Electronics, Mixed Price Sources
Materials/Node ($)
Labor ($)
182.43 14.13 93.75 171.10
35.00 0.00 0.00 20.00
Total cost per port
651.90 516.41
26
Tier I Switch And Reduced Cost GbE Switch

Scenario 7
Same switch as the previous scenario Reduced price GbE switch Fiber network saves
$47,968.88 $124.93 /port 19%
27
Tier I Switch And Reduced Cost GbE Switch

Cisco 2950 with Materials/Node Labor Reduced Cost ($) ($) GbE Switch UTP/fiber All UTP/fiber All
fiber fiber
180.58 0.90 426.04 7.29
182.43 14.13 93.75 171.10
25.03 0.41 0.63 0.46
35.00 0.00 0.00 20.00
Total cost per port
641.34 516.41
28
Tier I Switch, Cat. 6 UTP

Scenario 8
Based on Scenario #7 Uses Category 6 UPT cable Tier I switch in the TR Fiber network saves
$72,824.72 $189.65/port 27%
29
Tier I Switch, Cat. 6 UTP: Details

Cat 6 Tier I Cable
Materials/Node ($)
Labor ($)
182.43 14.13 93.75 171.10
35.00 0.00 0.00 20.00
Total cost per port
706.06 516.41
30
Low Cost, Tier II Switch with Cat. 6 UTP

Scenario 9
Based on Scenario #7 Uses lower cost switch in TR and Cat. 6 Cable Fiber network saves
$70,548.72 $183.73 /port 26%
31
Low Cost, Tier II Switch With Cat. 6 UTP: Details

Materials/Node Labor Cat 6 ($) ($) Reduced Cost UTP/fiber All Configuration UTP/fiber All
fiber fiber
239.49 0.79 426.04 7.29
182.43 14.13 93.75 171.10
25.03 0.41 0.63 0.46
35.00 0.00 0.00 20.00
Total cost per port
700.14 516.41
32
Lowest Cost UTP Network

Scenario 10
Switch and electronics chosen for low cost Fiber network saves
$7,615.53 $19.85/port 3%
33
Lowest Cost UTP Network: Details

Low Cost Solution
Materials/Node ($)
Labor ($)
182.43 14.13 93.75 241.24
35.00 0.00 0.00 20.00
Total cost per port
606.40 586.55
34
Expanding Backbone Bandwidth While Integrating Copper Components

No electronics
SPLICE OR INTERCONNECT
Zone Cabling Architecture

PATCH CORDS OUTLETS ACTIVE EQUIPMENT PC
WORK AREA
TELECOMMUNICATIONS ROOM
Extended Backbone
Electronics
OUTLETS Extended Backbone L o w C O U N T R I S E R S SINGLE POINT CROSS CONNECT ACTIVE EQUIPMENT
PATCH CORDS
Electronics
HOME RUNS
Electronics
HOME RUNS ACTIVE EQUIPMENT PATCH CORDS
EQUIPMENT ROOM
PATCH CORDS
Will be standardized in TIA/EIA-568-B.1 & TIA/EIA-569-B

35
Zone Cabling with Telecomm Enclosure

LEGEND:
= Fiber Backbone Cable = Horizontal Cable = Telecommunications Outlet/Connector = Telecomm Enclosure with a switch = Building Pathways and Spaces
HC in the TR
Fiber Backbone
HC = Horizontal Cross-Connect TR = Telecommunications Room

Cubicles Offices
36
Zone (Tiny TR) Telecom Enclosure

Standards Update
TIA TR-42.3
Defines telecom enclosure Out for default ballot To be included in 569-B
TIA TR-42.1
Defines cabling implementation Balloted in July To be addendum to 568-B.1
Both standards expected by February 2004
37
FTTZ, Tier I Switch

Scenario 4
Tier I UTP Switch SG fiber switch with 100 Mbps uplink Fiber network saves
$170,173.25 $443.18/port 65%
38
FTTZ, Tier I Switch: Details

Fiber to the Zone
Materials/Node ($)
Labor ($)
54.38 1.05 93.75 30.57
35.00 0.00 0.00 20.00
Total cost per port
677.93 234.75
39
K-12 FTTZ
Scenario 3
Like previous scenario but technician cost of $78/node

added to UTP cost [1 hr/wk; 5 yrs; $30k/yr]
Fiber network saves

$200,173.25 $521.31/port 69%
40
K-12 FTTZ: Details

K-12
Materials/Node ($)
UTP/fiber All fiber
Labor ($)
$216.10 0.79 504.17 8.47
$54.38 1.05 93.75 30.57
$35.00 0.00 0.00 20.00
Total cost per port
756.06 234.75
41
Reducing Fiber LAN Electronics Costs

TIA/EIA-785 Standard Ratified, May 2001

Low cost, 850 nm LED-based optics 300 meter support Designed for 62.5 or 50 m multimode fiber 10/100 auto-negotiation support Parallel detection for interoperability with installed base of 10BASE-FL devices 100BASE-FX optoelectronics
Not intended to replace or be compatible with Addendum #1 expected to lower costs further
Addendum #1 Released 12-23-02
42
100BASE-SX Electronics
First Dual-Speed Fiber Ethernet
Media converters
Install new fiber infrastructure Use legacy electronics until end of useful life Incrementally upgrade to fiber as required Convert point-to-point links and workstations-to-hubs/switches
NIC cards
Conversion to fiber at the PC New PC card products available

100BASE-SX Wall Outlet Media Converter 100BASE-SX Fiber PC Card (PCMCIA)
43
100BASE-SX, List Price

Scenario 11
Compares the cost of 100BASE-SX electronics to Cat.

6 UTP. Assumes volume pricing.
Fiber network saves:

$41,844.61 $108.98 /port 15%
44
100BASE-SX, List Price: Details

100BASE-SX List Price
Materials/Node ($)
Labor ($)
202.43 14.13 93.75 231.77
35.00 0.00 0.00 20.00
Total cost per port
706.06 597.08
45
100BASE-SX, 90 % List Price

Scenario 12
Based on previous scenario with 10% discount on

100BASE-SX electronics
Fiber network saves

$52,318.28 $136.25 /port 19%
46
100BaseSx, 90 % List Price: Details

100BASE-SX Street Price
Materials/Node ($)
Labor ($)
190.43 14.13 93.75 216.50
35.00 0.00 0.00 20.00
Total cost per port
706.06 569.81
47
Cost Analysis Summary, Part 1

Where Fiber Makes Sense Today
Scenario
(1) SG at list price (2) SG at 80% list price (3) K-12 (4) Fiber to the zone (5) Tier II electronics, street (6) Tier I electronics mixed price sources (7) Tier I electronics reduced cost switch
UTP/fiber All Fiber

$678.04 $678.04 $756.06 $677.93 $630.51 $651.90 $636.25 $576.53 $234.75 $234.75 $504.74 $516.41
premium/ savings
Fiber $
premium/ savings
Fiber %
$41.79 $101.51 $521.31 $443.18 $125.77 $135.49
6% 15% 69% 65% 20% 21%
$641.34
$516.41
$124.93
19%
48
Cost Analysis Summary, Part 2

Where Fiber Makes Sense Today
Scenario
(8) Cat 6 Tier I cable (9) Cat 6, Tier II cable (10) Low cost solution (11) 100BASE-SX at list price (12) 100BASE-SX at street price
UTP/fiber All Fiber

$706.06 $700.14 $606.40 $706.06 $706.06 $516.41 $516.41 $586.55 $597.08 $569.81
premium/ savings
Fiber $
premium/ savings
Fiber %
$189.65 $183.73 $19.85 $108.98 $136.25
27% 26% 3% 15% 19%
Fiber less than copper in every scenario examined. Average fiber savings: $177.70/port (26%)
Second generation cost model sample screen

Developed by Pearson Technologies and the TIA Fiber Optics LAN Section
Download from www.fols.org & input your own numbers

Centralized Fiber Cabling Installations

Recent Installations

Georgia Public Broadcasting Berne University (Switzerland) Tullahoma, TN City Schools Simon & Schuster American Museum of Natural History
DreamWorks Studios NASA Goddard Space Flight

Center
George Washington University Binghamton University
Smith Barney New York City Public Schools (199) The Gleason Works J. Paul Getty Center Siemens ICN Ohio Board of Regents Ballys Las Vegas Metropolitan Nashville Public Schools U.S.A.F. Research Laboratory, Wright Patterson Air Force Base
Hilton Hawaiian Village
* Various published sources

Where Is It Cost-Effective Today?

Most New Buildings, Most Retrofits of Older Buildings Schools [FTTZ] Fiber-To-The-Zone
Fiber to the Desk
Acknowledgement
Mr. John Struhar, Chairman of the
FOLS, developed this presentation with input from members of the FOLS.
54
Thank you for your attention.
www.fols.org
55

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Where Is It Cost-Effective Today?

Fiber to the Desk

Copyright 2003, Telecommunications Industry Association.

Copyright 2003, Telecommunications Industry Association.

TIA Fiber Optics LAN Section

Original mission: To create a resource where people can learn

Copyright 2003, Telecommunications Industry Association.

Copyright 2003, Telecommunications Industry Association.

TIA Fiber Optics LAN Section

Copyright 2003, Telecommunications Industry Association.

Late 90s: double digit

Total Cabling System Forecast $(B)

Fiber-Copper Cable Shipments

Major fiber applications

Selecting the Horizontal Media

Copyright 2003, Telecommunications Industry Association.

So, Why Not More Fiber?

Copyright 2003, Telecommunications Industry Association.

Comparing Fiber - Copper Costs

TIA Fiber Optics LAN Section, November 2001

TIA Fiber Optics LAN Section, July 2003

Copyright 2003, Telecommunications Industry Association.

Second Generation Cost Models

Decreased overall network costs

Copyright 2003, Telecommunications Industry Association.

Centralized Fiber Architecture

PATCH OUTLET CORD PC

H I G H C O U N T R I S E R S SINGLE POINT CROSS CONNECT HOME RUNS

Standardized in TIA/EIA-568-B.1 & ISO-11801, 2nd Edition

Copyright 2003, Telecommunications Industry Association.

Hierarchical Star, Optimized for UTP Copper (333 Meter Limit)

Cabling System Architectures

MAIN CROSS CONNECT

ACTIVE EQUIPMENT PATCH CORDS

Copyright 2003, Telecommunications Industry Association.

Installed First Costs Model Assumptions

Copper: 70% Fiber: 90%

Copyright 2003, Telecommunications Industry Association.

Comparing Installed First Costs

Loaded labor rate

Telecom room construction costs

5 year power costs

Cost models completely interactive

Copyright 2003, Telecommunications Industry Association.

Telecommunications Room Costs

$1,000 $10,000 6x10 $9,000 $20,000

6x5 $4,500 $4,500

Equipment to heat and cool electronics is costly.

Copyright 2003, Telecommunications Industry Association.

Multiple Scenarios Examined

7. Tier I electronics, reduced

8. 9. 10. 11. 12.

Copyright 2003, Telecommunications Industry Association.

Cost Summary, SG at List Price

SG is the Generic name for Volition, or VF-45

Copyright 2003, Telecommunications Industry Association.

SG at List Price : Details

$35.00 0.00 0.00 20.00

0.90 426.04 8.47

Total cost per port

Copyright 2003, Telecommunications Industry Association.

Copyright 2003, Telecommunications Industry Association.