The road to 40G optical networking

Optical equipment manufacturers are on the brink of releasing equipment that will pave the way to 40G bps (bits per second) network transmission speeds that are four times current data rates -- the equivalent of transmitting seven CD-ROMs worth of data in one second.

The promise for carriers of 40G optical networking is a lower cost per bit in sending data compared to the current 10G optical technology. Carriers may then, in turn, sell access to the capacity by emphasizing to ISPs (Internet service providers) and other customers that it will provide greater reliability and scalability for their bandwidth needs.

Although the initial rollout of 40G optical equipment will offer carriers greater capacity between central offices, the potential exists for the technology to eventually spill over into the corporate market and allow users to provide services such as optical networked storage and optical VPNs (virtual private networks) -- a trend that has happened before with the evolution of other networking technologies, vendors suggest.

For now, 40G optical networking is technology limited only to the laboratory and vendor demonstrations, but vendors are expected to begin selling 40G optical equipment to carriers by the end of the year, manufacturers say.

Optical networking vendors like Lucent Technologies, Nortel Networks, Alcatel SA, Ciena Corp., Optisphere Networks Inc., a subsidiary of Siemens AG, are developing the new technology, said Chris Nicoll, vice president of telecommunication infrastructure at Current Analysis Inc. in Sterling, Virginia. Japanese vendors NEC Corp. and NTT Corp. also are working on 40G networks.

"I expect we will see products from all those vendors within a 30 day to 90 day window," Nicoll said, referring to the rollout at the end of 2001. "It is going to be very competitive."

Links between Washington and New York or London and Paris, where capacity demands are high, could be the first corridors to roll out the technology. This is because manufacturers of the 40G equipment say the capacity demand already exists between some major cities, but the demand for high-octane optics is not present in large sections of the U.S. and other parts of the world.

"Has anyone in the Dakotas asked for OC-192 (10G bps optical technology)?" commented one U.S. carrier representative when asked about the need for greater capacity. "No. The demand is not there," acknowledged the official, who asked not to be named.

Fiber-optic technology sends data with the aid of light impulses across glass or plastic wire or fiber. Fiber optics are used as the conduit to send data from one central office to another in metropolitan areas or long distances from a central office in one city to one in another.

A basic point-to-point fiber-optic transmission system requires the following: an electro-optic transmitter, which generates optical bits from electrical bits; an optical fiber to transport the bits; and an optoelectronic receiver to convert the bits back to the electrical. If a signal is traveling a long distance, amplification of the signal is required at regular intervals.

Optical-electrical-optical (OEO) regenerators also are put in place if signals are traveling over a couple hundred kilometers (124 miles). They grab the signal, bring it back into its electrical form, reshape and re-amplify the signal and send it back on its way to its destination.

The base data transmission rate for fiber optics is called OC-1 or Optical Carrier-1 and it sends information at a rate of 51.84M bps. An OC-1 line provides a connection nearly 100 times faster than a 56.6K-bps modem.

Many carrier companies these days have OC-192 links in place and they offer a 10G-bps data rate. Products for OC-192 networks are well developed and most carriers have completed or are in the midst of implementing OC-192 networks, according to industry analysts. The 40G standard is referred to as OC-768.

Each leap in fiber-optic transmission speed has come with new challenges, and the jump to 40G optical over a single wavelength is no different, as it offers both technical, financial and even marketing obstacles.

On the technical side, 40G optical networking requires the pulses of light that send the signal across the fiber to be closer together. When the signals are closer together, there is greater chance for signal degradation to interfere with another signal on the fiber, said Will Russ, Optisphere's senior manager of solutions marketing. As the signal moves along the fiber, it must be cleaned up and amplified to keep it in its truest form.

The fiber used to send the 40G signal also must be more refined to reduce distortions over long distances, Russ said. Some existing fiber-optic cable that was laid during the 1980s and into the early 1990s in the U.S. may not be ideally suited for use with 40G technology because of its inability to keep a signal pure. A problem known as polarization mode dispersion (PMD) can occur which causes pulse dispersion and, ultimately, affects transmission quality.

Financial challenges of 40G optical networking are similar to the ones that arose with the development of 10G technology, said Scott Andrews, chief executive officer for Picosecond Pulse Labs in Boulder, Colorado, which makes optical components for companies like Corning Inc. that enable high speed conversion from electrical to optical and back to a electrical signal.

Carriers that buy 40G optical equipment, typically, would be looking for a cost-benefit model that provides they gain four times the network capacity compared to 2.5 times the cost of the company's existing OC-192 network, Andrews said.

At this time, the financial model appears to be more costly than typically desired to gain the increased capacity.

"It will not be adopted in a broad way until the economics make sense for the carrier," Andrews said. "The model, in my opinion, will be viable in the next two or three years. Look at 10G. When Nortel first came out with OC-192, the model wasn't there and they had to push the technology benefit. You are faced with the situation today that it is not economically viable. I don't see the hurdles (for 40G optical networking) as insurmountable "Developing a network is not something that happens overnight, and optical network equipment vendors will have to prove to carriers that the investment in 40G equipment is worthwhile, Nicoll of Current Analysis said.

The rollout of 40G is more likely to begin in the long haul transmission space, which is from city to city. Nicoll said he believes it will be first seen there because the metro market (within one metropolitan area) is more cost sensitive. By starting in the long-haul space, carriers can spread the costs of the new networking equipment over a bigger user base, he said.

"We will see some sort of trials at the end of the year," he said. "We will service provider implementation by carriers at the second half of next year."

Initial implementations of 40G equipment are expected to let carriers use existing 10G technology, Nicoll said. Four OC-192 signals will be streamed over a single 40G wavelength to provide greater service economics, he said.

Still, adoption of 40G optical networking could be slowed by the current industry spending slowdown and carriers buying the latest 10G gear that can offer 1.6T-bps capacity using DWDM (Dense Wavelength Division Multiplexing) on a 10G line with 160 channels, said Sterling Perrin, a research analyst with International Data Corp. (IDC). Although companies like Lucent and Nortel say they will roll out 40G optical networking equipment by the end of 2001, it may be 2003 before the true adoption of 40G begins, he said.

"Ultimately it boils down to people are only going to adopt 40G if it makes economic sense," Perrin said.

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