My previous post about LTE taking the lead in the 4G wireless sweepstakes prompted some interesting comments, including those of sharp readers who pointed out the pokey nature of the wireless backhaul networks. As luck would have it, I had a breakfast meeting this week with John Roese, chief technology officer of Nortel and one of the most astute people I know in the broadband business.
Whether because of a perceived fear of WiMAX or a sudden spurt in data revenues, the LTE announcements made earlier this year didn’t come as a surprise. In the U.S., two major carriers, Verizon and AT&T, are looking to roll out their LTE networks in the early part of the next decade.
Roese had correctly predicted that LTE would arrive much faster than people thought, and he seems to have a much better handle on the 4G timeline than others in the wireless industry. It seemed appropriate to ask him about the wireless backhaul business and the bandwidth demand that LTE will create.
Instead of giving me a pithy quote, Roese laid out the kind of compelling argument only an engineer can make. He pointed out that the wireless carriers are currently using around 3 T-1 or DSL-type connections to connect their 3G base stations. (In some cases they use microwave or passive optical network connections.) A 3G network base station typically has 10 Mbps of capacity.
In a 4G world, where three antennas will form an arc to provide coverage, each antenna will need a 100 Mbps, or about 300 Mbps total, Roese explained to me. The carriers would prefer more headroom, for if there are four carriers per base station, the bandwidth demand per base station could run closer to about 2 gigabits per second.
Clearly today’s pipes aren’t going to be enough. Optical/metro Ethernet might be one of the better options for the 4G bandwidth needs, according to Roese. There are point-to-point wireless backhaul solutions that could come in handy as well, but he said fiber is the real answer. Even at slower 3G speeds, today’s backhaul infrastructure isn’t ready to do the hard work. Level 3 is one bandwidth provider that could benefit from the LTE-driven demand in the U.S.; we’re told the company has fiber as close as 1,000 feet to most base stations in the country.
From an equipment standpoint, the wireless broadband buildout spells opportunity. Infonetics reports that spending on backhaul equipment will grow to $8.2 billion in 2010 from $4.5 billion in 2007. Juniper Networks wants a piece of that; it recently started offering the BX7000 family of products. (More on this @ Search Telecom)

When we watch movies or play music online, there’s a flurry of unseen activity making sure that data arrives when and where it’s supposed to be. This is the job of the high speed fiber and computer systems of the internet’s content distribution networks (CDNs).
Every website that streams content (live video, music) needs a CDN. The flurry of new media online has made it a prime time for companies like Akamai, Limelight Networks, Level 3, VitalStream, BitGravity, and EdgeCast who provide fast and efficient ways to deliver rich media to millions on the internet. The market is estimated to be around $800 million, of which Akamai controls about half.
One of the newer networks, EdgeCast (2006), has closed a $6 million in Series B financing led by Steamboat Ventures, which is affiliated with The Walt Disney Company, bringing their total financing to $10 million. Steamboat joins Series A investors such as Mark Amin, Chairman of CinemaNow as well as Jon Feltheimer, CEO of Lionsgate films. The new funds will be used to expand internationally, scale the network for additional capacity, enhance features, and market to more businesses.
EdgeCast has distinguished itself from other CDNs by charging for bandwidth instead of lumping the cost in with the cost of other CDN services. This means customers should see declines in their bill as bandwidth costs drop.
But these businesses are as much defined by their customer list as pricing plans. Level3 provides the backbone for YouTube’s content. Limelight handles Microsoft and Amazon Unbox. BitGravity serves Revision3. EdgeCast’s most recognizable customer is IMAX, but their investment from Steamboat Ventures leads me to believe they’ll be the CDN of choice for Disney as well.
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Level 3 is trying its best to transform itself from a pure vanilla long haul carrier to a bandwidth operator with deep metro links. The company has been making acquisitions to go after the metro market opportunities, hoping that those will be enough to compensate for loss of AT&T and Verizon long haul business.
Today the company announced that it has bought metro assets from AT&T in six markets: Detroit, Hartford, Kansas City, Milwaukee, San Francisco and St. Louis. The price of the deal wasn’t disclosed. While we understand Level 3’s motivation to get into the metro services, it is not a slam dunk. It faces tough competition from smaller, more nimble rivals such as Yipes.
Ma Bell was supposed to divest assets in 11 markets as a pre-condition for the the SBC-AT&T merger. Six cities come with access to over 200 buildings and more than 1,600 metro fiber route mile. At present Level 3 has 6,500 on-net buildings and over 25,000 metro fiber route miles, while plans are afoot to add upto 1000 buildings in 2007.

The massive online video boom is putting strain on the optical infrastructure, prompting researchers and equipment makers to come up with ways to transmit more data at higher speeds over the existing networks. The target everyone seems to have in their cross hair is 100 gigabits per second - at least when it comes the long haul networks that connect cities.
Today, Alcatel-Lucent owned Bell Labs showed off a technology that allows today’s 40 Gbps long haul networks to jump to 100 gigabits per second. They transmitted 10 100-Gbps WDM channels over a 1,200-kilometer distance.
“If you look at VOD — if it takes off, carriers will need to upgrade their networks. In a few years, 90 percent of traffic will be VOD, and bandwidth demand will go up by a factor of 10,” Martin Zirngibl, director of Bell Labs Data/Optical Networks Research Department told LightReading.
But he and his Franco-American corporate masters are not the only ones looking to zoom past the 100 Gbps mark. Tomorrow, CoreOptics and Siemens are going to present a paper (PDF) that claims that the two companies have been able to send data at 111 gigabits per second over 10 channels on a single fiber at 50 GHz channel spacing over a distance of 2,400 kilometers.
These speed tests show that older networks can be repurposed to support speeds of 100 Gbps. Bernhard Kubis, vice president of Research and Development at Siemens Networks in a press release said:
“This demonstration proved the feasibility of transmission of 100 Gbps over the 10 Gbps network infrastructure installed today.”
Infinera and Level 3 had showed off their own capabilities in a test transmission held in November 2006.