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CenterFuse Broadband Feasibility Report The most talked about technology is NG-PON2 (next generation passive optical network). This technology works by having tunable lasers that can function at several different light frequencies. This would allow more than one PON to be transmitted simultaneously over the same fiber, but at different wavelengths. That makes this a complex technology with multiple lasers and the key question is if this can ever be manufactured at price points that can match other alternatives. The only major proponent of NG-PON2 today is Verizon, which recently did a field trial to test the interoperability of several different vendors including Adtran, Calix, Broadcom, Cortina Access, and Ericsson. Verizon seems enamored with the idea of using the technology to provide bandwidth for the small cell sites needed for a 5G network. However, the company is not building much new residential fiber. They announced they would be building a broadband network in Boston,which would be their first new construction in years, but there is speculation that a lot of that deployment will use wireless 60 GHz radios instead of fiber for the last mile. The market question is if Verizon can create enough economy of scale to get prices down for NG-PON2. The whole industry agrees that NG-PON2 is the best technical solution because it can deliver 40 Gbps to a PON while also allowing for great flexibility in assigning different customers to different wavelengths. Still, the best technological solution is not always the winning solution and cost is the greatest concern for most of the industry. Today the early NG-PON2 electronics are being priced at 3 -4 times the cost of GPON, due in part to the complexity of the technology, but also due to the lack of economy of scale without any major purchaser of the technology. Some of the other big fiber ISPs like AT&T and Vodafone have been evaluating XGS-PON. This technology can deliver 10 Gbps downstream and 2.5 Gbps upstream—a big step up in bandwidth over GPON. The major advantage of the technology is that is uses a fixed laser which is far less complex and costly. In addition, these two companies are building a lot more FTTH networks than Verizon. While all of this technology is being discussed, ISPs today are can deliver 10 Gbps data pipes to customers using Active Ethernet technology. For example, US Internet in Minneapolis has been offering 10 Gbps residential service for several years. The Active Ethernet technology uses lower cost electronics than most PON technologies, but still can have higher costs than GPON due to the fact that there is a dedicated pair of lasers, and a dedicated fiber for each customer. A PON network instead uses one core laser to serve multiple customers. It may be a number of years until this is resolved because most ISPs building FTTH networks are still happily buying and installing GPON. One ISP client told us recently that they are not worried about GPON becoming obsolete because they could double the capacity of their network at any time by simply cutting the number of customers on a neighborhood PON in half. That would mean installing more cards in the core without having to upgrade customer electronics. The bottom line of this discussion is that we decided to not consider NG-PON2 for the primary technology to deliver FTTH services. The technology is still too expensive and since it has not yet been accepted widely in the industry it might never get long-term support by vendors. However, our network design allows for an eventual migration to XGS-PON or NG-PON2 through what is called an overlay. That means introducing the new technology while maintaining the current network. This would allow for an orderly transition over time while bringing faster 10-gigabit connection to Page 79