Fiber to the Home Last Mile Building Blocks

Fiber to the Home- Last Mile Building Blocks Michael Brayen & Karen Elmont June 9, 2014 1 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

AGENDA • Last Mile Networks– Municipal BB – COOP or UTELCO – • Why Do This? • A Typical Network--Overview • Discuss the Pros the Cons and the Questions to ask- • What does it look Like? Product & Solutions - Next Steps • I hear the words, what do they mean? • What will the Network do for my Community of Interest? • I build it, they build it, but how will it benefit us? 2 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

The Service Provider/ The Asset Provider---Is it You? What Services? Who Owns it? Downstream BW Requirements SDTV 2 Mb/s per channel HDTV 8 12 Mb/s per channel Basic HSI 5 Mb/s average Gaming 2 Mb/s per session Multimedia surfing 8 Mb/s average Video Conf. , learning 3 Mb/s per session Home working 4 Mb/s average About 25 70 Mb/s worth of stuff Drivers: HDTV, VOD, You. Tube, Gaming 3 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

Fiber to the Home/Business/Anchor Institution What is the Driver(s) 4 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

Why Do this? Citizens: Served/un-served Education/Healthcare ü Video enhanced learning ü Wireless or wire line BB access ü Community centers ü Economic development ü Distant Education ü Centralized Records ü Tele Medicine ü Job creation ü Quality of life Public Safety Businesses ü Multi Counties Interoperability ü Local services providers ü Multi Agencies Interoperability ü Wireless service providers ü Interop with Education: ü Local deployment services ü Smart Policing ü Permanent IT jobs ü Interop with Healthcare: ü Situational awareness ü Advanced P. S high speed applications 5 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

Why Do This continued … A Look Back. Video content is making high speed broadband very relevant and creating a lot of traffic! DOUBLES every 2 Yrs. Internet traffic “The popularity of browser-based video 10% is You. Tube 37% Peer to Peer 70% is video 46% HTTP 36% is streaming video such as You. Tube is having a significant impact on overall bandwidth consumption. ” Ellacoya Networks, July 07 Internet video will challenge the current model Demands better quality than “best effort” broadband services can provide Video is Quickly Becoming “The” Broadband Application Users Care Most About 6 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

Network Overview 7 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE

End to End Network Architecture—The Big Picture Alcatel Lucent Triple Play Service Deliver Architecture 5 Inc OSS / End – To – End Solution SIP/POTS Phone Gig. E Ethernet Distribution Fro m Switch BSSICP-Flexcare ALU BO 6850 Switch 5520 AMS Gig. E National Content 5620 SAM DHCP /NTP/ RADIUS /DNS Servers ONT EAS System TV w/STB HPNA GPON IRD PC Public Buildings Harmonic Encoders Local Content GPON 6850 MS Mediaroom VM Micro Architecture Harmonic Head End SIP/POTS Phone ONT G i g E E th e r n e t D is t ri b u ti o n F r o m S w i tch 5 Inc ISP ALU BO b 6850 Gig. E ONT TV w/STB HPNA Collapsible Keyboard Mouse / Monitor Tray DNS 1 DNS 2 Web Server POP 3 Mail Server SMTP Mail Server Backup and RADIUS Server Tape Backup System Internet / Meta. Switch Firewall PC Ethernet Switch ONT 7360 OLT 7342 GPON OLT GPON 7750 SR Portal Server Residential PSTN Small Business 8 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

Key FTTH Architectures – C’est La Difference Central Office/HE Point -to. Point Active Ethernet PON Access loop/L. Mile Home Splicing To ISP Ethernet switch CPE To ISP PON OLT Optical splitter ONT 9 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

FTTH Distribution Overhead and Underground Feeder OSP Cable From C/O Fiber Distribution Hub (FDH) ONT Drop Cable Access Terminal Splice Case Distribution Cable TAP- Terminal Access Point Splice Case ONT Alliance Drop Cable 10 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

11 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT

Open Access Model with Maximum Flexibility to Service Providers • 3 Points of Contention with associated Service Level Agreements or SLAs Access VC (C-VLAN)– the bandwidth available to the ONT UNI per SP per end-user Connectivity VC (S-VLAN)- the aggregate bandwidth available to all SP end-users per OLT The POI (NNI) – the aggregate bandwidth available to a SP at the POI 12 | 12 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

FTTH Questions to Ask- Challenges/Opportunities to review 13 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS

Common Questions to ask? • What Kind of Network – Open Access or Closed? • What Services do we want to Provide? Voice, Video , Data, Smart Grid—None? • What does the Community Want? Willingness to participate ? (Focus Group) • Do we want to own the Network Asset? • Do we have a Business case? • Do we have a Funding Source? • Do we have a Staff up to running this Network? • Have we Analyzed the competition (capabilities / shortfalls) 14 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

FTTH FUNDING OPTIONS: BENEFITS AND RISKS Type of Funding Benefits Risks Comments Self-Funding/Cash • No debt servicing • May affect cash holding, cash ratios, or equity requirements • Possibly the fastest method to execute project Grant • Cash funds without external debt or payment requirements • Availability of funds from multiple grant sources • Time to obtain grants and amount of required funds • Grant requirements (e. g. , matching funds) may add complexity • Grants many times are preferred to internal cash and debt, but sources and obligations must be investigated • USDA, CAF, E-Rate, Health Connect Debt: Mortgage-type • Access to capital markets may accelerate funding • Debt servicing requirements (amount, schedule, and obligations) affects cash flow • Debt may affect debt and balance sheet requirements • Mortgage-type loan may not be available for scale or length of time required by utility Debt: Bond • Access to capital markets may accelerate funding • Same as above • Public bond offering may require public comment period, extending schedule • Voters may not approve bond • Public comment period also may require public vote and allow competition to lobby against triple play market entry 15 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

CHALLENGES/ OPPORTUNITIES TO MITIGATE FTTH COMMERCIALIZATION CHALLENGES • Engage with Regulators Regarding Business Models • Find available Federal or State Funds • Connect America or E-Rate Funding • Organization Design and Readiness • BCDR Planning • Contract Alignment • Joint Development Agreements with Public • Engage with Planning Authorities • Partner with other Operators • Easement Rules and Requirements State Aid, Grants Federal o r State Agencies/Regulator(s) • Open Access/ Closed Access Opportunities • • • Triple Play Anchor Services Public Sector Contracts Market Assessment and Pricing Smart Grid Opportunities Mobile Backhaul Partner with other providers Permitted Development/ Last Mile Access and Right of Way Organization Operations Priority Funding/Ownership Rules Site Access/Asset Innovation Demand Uncertainty • Organization Design and Asset • Accounting Rules Asset Ownership Business Development and Service Portfolio 16 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT x • Establish Separate Entity/Partnering • Portfolio Lifecycle Management

FTTH A Checklist of the Steps to move Forward 17 COPYRIGHT © 2013 ALCATEL-LUCENT.

Broadband Fiber To The Home Process Program Management Concept Development Concept ØVision ØGoals ØNeeds Assessment ØConsensus Building ØBusiness Modeling Sales and Marketing ØSales ØMarketing ØCustomer Care ØContract Negotiations ØProgram Management and Oversight ØProject Steering ØProject Execution Design Services Design ØRoute Selection & Design ØConstruction Specifications ØConstruction Designs Implementation Services O&M Services Construction Integration Operations ØConstruction Mgmt ØPermitting ØConstruction ØInspection ØAs built Drawings ØPerformance Verification ØAcceptance Testing ØMaintenance ØAdds, Moves & Changes ØRepair and Restoration 18 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

Steps in building a Last mile Network This slide provide a high level overview of the activities that should progress in some logical order. In most cases the following steps will run in a concurrent fashion. Feasibility Study Building the Business Case Utility – Consultant – independent Study Build a Business Case Parameter with options and timelines Establishing the Financial Model Finalize the Business Case and Funding Options Network Architecture and Design Develop a Last Mile Engineering Design, Prepare for Construction Other Important Considerations Develop References and Partners and Educate Yourself on the alternatives 19 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

What Does the Network Provide for the Community Enables Municipal or other Government-run Utilities and COOPs to provide communities with broadband voice/video/data services and Smart Grid combined in a single solution using an innovative business modeling approach. Drive Economic Development High-speed broadband allows businesses to compete on a global level Reliable power is attractive to new business Attract new businesses and enable e-commerce Improve Quality of Life - Telemedicine Distance Learning, Telecommuting Entertainment and Access to Information Improve power delivery and quality Low latency communications for smart grid applications Automated switching and protection systems, improved situational awareness reduce impact and duration of power outages Incorporate Green Energy Monitor and control renewable energy sources everywhere Maintain grid stability as renewable energy sources are added Meet environmental targets and regulatory requirements 20 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

FTTH Common Terms and Acronyms 21 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT

Common Acronyms • 3 G: 3 rd Generation cellular data technology (peak load min. 2 Mbps) • 4 G: 4 th Generation cellular data (peak load min 100 Mbps) • AE: Active (or Point to Point) Ethernet AON Active Optical Network • ARPU: Average Revenue Per User • ARRA: American Recovery & Reinvestment Act • ATM: Asynchronous Transfer Mode • BPON: Community Access or Cable Television • CO: Central Office • DOCSIS: Data Over Cable Service Interface Specifications • DSL: Digital Subscriber Line • EPON: Ethernet Passive Optical Network 22 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

Common Terms • Fi. OS: Fiber Optic Services • FTTH: Fiber To The Home • FTTN: Fiber To The Node • FTTP: Fiber To The Premise • GPON: Gigabit Passive Optical Network • HD: High Definition • ILEC: Independent Local Exchange Carrier • IPTV: Internet Protocol Television • LAN: Local Area Network • LEC: Local Exchange Carrier (typically "the Phone Co") • LTE: Long-Term Evolution (i. e. 4 G Mobile network) • MAN: Metropolitan Area Network 23 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

Common Terms • Mbps: Million bits per second • MDU: Multi-Dwelling Unit (typically residential) • Mo. CA: Multimedia over Coax Alliance • MSAN: Multi-Service Access Node • MSAP: Multi-Service Access Platform • MSO: Multi-Service Operator (typically a Cable Co) • MTU: Multi-Tenant Unit (typically commercial) • NGPON: Next Generation PON • NOC: Network Operations Center • ODM: Original Design Manufacturer • OEM: Original Equipment Manufacturer • OLT: Optical Line Terminal 24 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

Common Terms • ONT Optical Network Terminal • OTT Over The Top (typically refers to TV) • PON Passive Optical Networking • POP Point of Presence • POTS Plain Old Telephone Service • RF Radio Frequency • RFo. G Radio Frequency over Glass • RG Residential Gateway • ROI Return On Investment • RT Remote Terminal • RUS Rural Utilities Service • SBU Small Business Unit 25 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

Common Terms • SBU: Small Business Unit • SFU: Single Family Unit • SLA: Service Level Agreement • SMF: Single Mode Optical Fiber • TDM: Time Division Multiplex • USF: Universal Service Fund • VDSL: Very high data rate over DSL • Vo. IP: Voice over the Internet Protocol • WDM: Wave Division Multiplex • XGPON: 10 Gigabit Passive Optical Network • OLT: Optical Line Terminal 26 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

Common Terms • Aerial: Use of poles (telephone or utility poles) for cable placement • Attenuation: Loss of Signal, transmission loss • Bandwidth: how much data can be sent over a specific connection over a specific amount of time, also can refer to the radio frequencies • Broadband: High-speed data transmission where a single cable can carry a large amount of data at once • Broadband: typically considered to be synonymous with a high speed connection to the internet • Brownfield: Existing service area/redevelopment • Buried Fiber: Underground fiber placement • Closed network: a network used only by the owner • Coax: is a common type of cable used to transmit data 27 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT

Common Terms • Copper: common type of wiring, typically used in phone service • Dark Fiber: un-lit, no equipment on the fiber • Dispersion: Length of the Signal • Fiber optics: the design and application of optical fibers • Gig or Gigabit: 1, 000 Mbps • Greenfield: New Development • Incumbent: Existing/current service provider • ISP: Internet Service Provider • Latency: the amount of time it takes a packet of data to move across the network • Open Access: Allows any provider to access, unrestricted • Optical Fiber: is a flexible, transparent fiber made of high quality extruded glass (silica) or plastic, slightly thicker than a human hair • 28 COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOT FOR DISTRIBUTION OUTSIDE BECHTEL WITHOUT WRITTEN APPROVAL FROM ALCATEL-LUCENT