IADSL Distribution System

Ifor Broadcast Towers, Inc.

by Robert Blaine Twilley

ISection 1: Overview of Broadcast Towers, Inc.

The primary purpose of this project is to assist Broadcast Towers, Inc.

I

with its business planning and network design of an ADSL distribution system.

Broadcast Towers specializes in assisting property management firms and

Ibuilding owners create additional revenues from telecommunication facilities.

For Broadcast Towers, a telecommunication facility, or potential

Itelecommunication capability, may exist on an empty rooftop, an existing

electrical riser, or even a telephone closet. In many cases, these different

Icomponents of a building can be used to generate extra revenues for building

owners. Broadcast Towers represents the telecommunication facility

Imanagement for building owners on a national scale.

The opportunity to create revenue through the use of an ADSL distribution

Isystem, described in Section 5, involves the property management firm at

NationsBank Plaza in Dallas, Texas. The NationsBank Plaza, located at 901

IMain Street in downtown Dallas, is one of the largest office buildings in the

' metro-plex. The building boasts 73 floors, a 922ft rise - the tallest in Dallas, over

1.9 million square feet and a business population of 8,000 people. The building

I

houses an extensive range of internet and wireless capacity providers and

carriers with one of the most state-of-the-art communications centers in the

Iworld. With over 100 different telecommunications clients, the communications

center is enclosed on the 72 and 73 d floors of the building. Another relevant

Ifeature of this efficient structure, which will contribute to this project, is a private

copper network that interconnects NationsBank Plaza to Renaissance Tower,

Iand One Main Place which are two of the adjacent buildings (Diagram A,

Appendix A).

IThe property management firm at NationsBank Plaza, Cushman &

Wakefield, has been introduced to the idea of offering high speed connectivity to

I the internet through an ADSL distribution system. The general manager of

Cushman & Wakefield at NationsBank Plaza has expressed an interest in

1

Ipursuing a business agreement to create revenues for the building owners with

an ADSL system that provides services for the building tenants. This report

I should facilitate any decision made by the building owners at not only

- NationsBank Plaza, but also, the other two properties previously mentioned.

Section 2: Commercial Internet

ICurrently businesses use several different options to connect to the

internet. The most economical method for any given business is to connect each

Iof their users with dial-up modem accounts through an Internet Service Provider

(ISP). Dial-up accounts usually range from $5 to $30 per-month/per-user

depending upon the service provider and the type of service being provided.

Most dial-up accounts use modems, which can be any of following 5 speeds:

14.4 Kbps, 28.8 Kbps, 33.6 Kbps, 56.6 Kbps, and 128 Kbps ISDN. The 128

Kbps ISDN, or Integrated Services Digital Network, line modem uses a different

Itype of delivery system than the other 4 options. The speed for ISDN is much

higher; however, an ISDN line must be leased from a local telephone provider as

Iwell as the fee that must be paid to the ISP (in many cases the ISP for ISDN is a

I

local telephone company). This increases the cost of ISDN service to

approximately $1 00/month per user.

I

The speeds, represented on a Kbps scale, attribute to the speed by which

data can be transferred over the internet. Internet speed is often referred to as

I"bandwidth," and is expressed in Mbps or Megabits per second (Millions of bits

per second). Kbps refers to Kilobits per second or thousands of bits per second.

IData transfers are becoming much more dependent upon higher speed

connections to the internet. Its been estimated that Internet sales will soar from

I$8 Billion today to $300 Billion in the next five years. Because so much business

in conducted over the internet, and business is expected to grow on the internet,

Ihigh speed connections, or high speed connectivity, is becoming more important

to commercial users. So far, this report has only addressed slow speed

I

connections to the internet through modems with the exception of ISDN which

has medial connectivity results. What are the options for businesses that need

high speed connectivity to the internet?

For most corporate sites, TI service is the answer to internet connectivity

issues. TI service is a connection to the internet with 1.544Mbps which is

usually branched through the use of a hub to each individual user. Unlike dialup

accounts, TI service usually is accompanied by the implementation of a Local

Area Network (LAN). Ti's are usually leased from telephone companies which

provide the "pipe" that connects a site to the internet. For many small companies

only partial TI's are leased. At Broadcast Towers, for example, a 256Kbps TI is

leased for internet connectivity. This 256Kpbs is only a fraction of the

1.544Mbps that a full Ti offers. Other larger companies require more than a Ti

connection. Where a Ti is not satisfactory, multiple Ti's can be leased at a

reduced rate and "muxed" together. "Muxing" involves the use of a multiplexer to

combine the bandwidth signal and redistribute it. For even larger company a T3

can be leased. A T3 connection provides users with 45Mbps of bandwidth to the

internet.

The expensive factor involving TI and T3 bandwidth is the means by

which the bandwidth is delivered. As mentioned before, most Ti's are leased by

telephone service providers like Southwestern Bell. A business could call

Southwestern Bell and request a TI. The phone company uses what means are

available to deliver the Ti speeds. Often the means by which the Ti is delivered

is referred to as a "Ti Pipe." The Ti pipe is generally a dedicated line between a

telephone company's CO, or Central Office, and the user or users. Because the

lines are dedicated and require upkeep, they are very expensive to lease.

3

I Section 3: An Overview of ADSL Technology

I ADSL, Asymmetrical Digital Subscriber Line, is a technology that can

I provide high amounts of internet bandwidth over copper lines, or copper pairs.

Because the technology surrounding ADSL is very technical, this report will focus

I

on describing an "ADSL Distribution System" in its simplest ideas.

Basically, the business behind ADSL is to provide commercial users with

Ihigh speed connections to the internet at an economical cost. In theory, ADSL

service should be much less expensive than Ti services due to use of ordinary

1 copper lines which are relatively inexpensive when compared to Ti Pipes (see

Section 2). There are is not a set structure for an ADSL network; in fact, there is

Ino such thing as an "ADSL network." ADSL is simply a method of getting data

from point A to point B at a high speed and a low cost.

I ADSL modems and network equipment transmit data on two frequencies.

For each copper pair, there are two frequencies for bandwidth at which data can

I be transmitted, hence the name "copper pair." For most modems and Ti's all

data is transferred at symmetrical rates. In other words, a 28.8 modem sends

I and receives, or uploads and downloads, at 28.8Kbps. However, ADSL

I modems are asymmetrical due to the different frequencies in copper pairs.

ADSL modems can receive data on the downstream, or download, at up to

I 8Mbps and send data on the upstream, upload, at 640Kbps. This is a

tremendous difference when compared to typical modems. In fact, ADSL can be

Imore than five times faster than Ti service on the downstream.

Is upstream speed important? For most users using the internet uploads

Iare very uncommon. Typically, when using the internet to gather data with an

internet browser, the only uploads occur when the user sends out a signal to the

Ifile or web server where the data is located. The data sent to a server when

browsing is only about 1 Kb, but the data contained on a typical webpage is

I about 30K-200K. File transfers also require upstream speed. If one user wants

4

I to send a file to a user(s) or to a file server, he or she must rely on transmit

speed. ISection 4: Residential Service and ADSL

I

ADSL providers typically have many obstacles when trying to provide their

services to residential users. One of the important limitations of ADSL

Itechnology is that it is mileage sensitive and has a range of only 3 miles. Also

the copper networks for residential areas are usually owned by telephone

Icompanies. To provide an ADSL service for one particular residential user, the

ADSL provider must lease a copper line from the telephone company between

Ithe provider's distribution center and the residential user. The copper line

provided by the telephone company is not point to point; instead the leased

I copper pair goes from the ADSL provider to the CO (Telephone Central Office)

then to the residential user. In order to create an effective 3 mile radius the

I ADSL provider would have to locate their distribution center as close as possible

to the CO or possibly co-locate ADSL equipment within the CO. I Why aren't the telephone companies interested in facilitating the ADSL

I providers? Because the service costs for ADSL are so inexpensive compared to

the cost of TI service, most telephone companies are not interested in giving

I their users an option between ADSL and TI pipes.

In order to expand their network of influence into a new arena, Broadcast

ITowers' original objective was to provide residential ADSL service; however,

after careful consideration, the residential plan was put on hold. Many factors

Ilead Broadcast Towers to believe that a residential ADSL distribution system

could be created with small profit margins. Also, once the ADSL service reached

Ia peak, the telephone companies could easily clone Broadcast Towers service at

a much lower cost.

I5

I Section 5: Broadcast Towers' ADSL Distribution System

To provide ADSL service to commercial users at NationsBank Plaza,

I Broadcast Towers must first purchase a large amount of bandwidth to be

redistributed. There are many options to attain bandwidth, especially since

IBroadcast Towers contracts all telecommunications clients in the building.

Basically Broadcast Towers must first decide how much bandwidth is needed for

Ian efficient ADSL network that services the building and any potential buildings

as noted in Section 1 (Renaissance Tower and One Main Place). The bandwidth

Iis brought into the building by means of "pipe" or wireless transmission (wireless

transmission indicates the bandwidth is transferred through the use of Ti or T3

I radio) and taken to a facility that is the center of the distribution. For Broadcast

Towers, the best location for its distribution center is on the 26' Floor in the

Shared Telecommunications Facility, or STF, which houses the building's copper

network (i.e. telephone lines). The STE must house one very important piece of

I ADSL equipment, the DSLAM, or Digital Subscriber Line Access Multiplexer.

I The DSLAM in the simplest terms, is one huge hub for data transfer. The

bandwidth is brought into the DSLAM and then redistributed to each individual

I user over the copper pairs. A schematic for the location of the DSLAM and the

ADSL distribution can be found in Appendix A, Diagrams A&B.

IIn a classical model of ADSL distribution, the range for the ADSL

transmission would not be calculated point to point (DSLAM to user). Instead,

Ithe DLSAM would feed a signal over the copper pairs, which would go back to

the CO that is closest to NationsBank Plaza, and return to each user station

I(DSLAM to CO to user). Because ADSL is mileage sensitive with a range of 3

miles, much of the bandwidth would be lost because of the CO's distance. The

1 DSLAM could be located at the CO, to reduce the signal loss, but in the case of

NationsBank Plaza, the CO is completely removed from the system design.

I

IRemember that Broadcast Towers manages a private copper network which is

owned by the building owners at NationsBank Plaza, Renaissance Tower, and

One Main Place. This factor allows the ADSL distribution system to keep a

strong signal throughout its network and a point to point distribution (DSLAM to

user).

To get started, Broadcast Towers is planning to construct the simplest

level of ADSL distribution. Each ADSL client will need to purchase an ADSL

modem which connects them to the DSLAM by means of copper. For a

company to purchase ADSL service for a number of employees, the company

must pay on a per user basis. Eventually, Broadcast Towers will have to offer its

ADSL clients more alternates for ADSL or DSL service. For example, a

perspective customer could in fact purchase a TI over an ADSL distribution

center. The Ti pipe would make use of copper pairs to distribute the bandwidth

to a LAN that exists at the users location. The Ti could then redistribute

connectivity to a number of users. Of course a TI is symmetrical bandwidth

(1.5Mbps both directions), so the DSL technology called SDSL, or Symmetrical

Digital Subscriber Line would have to be implemented to carry the Ti signal.

Section 6: Bandwidth and the Redistribution of Bandwidth

As noted in Section 5, an initial amount of bandwidth must be purchased

to redistribute over an ADSL distribution System. One of the major factors of the

economics of this project, will be covering the cost of the purchased bandwidth

that is to be redistributed. Broadcast Towers wanted the economic to include the

initial purchase of a full T3, also called a DS3, or Digital Signal level 3. The DS3

provides the redistribution of 45Mbps of bandwidth. With ADSL technology,

each individual user could receive up to 8Mbps on the downstream of this

45Mbps from the DS3 (Remember that not all users will get speeds up to 8Mbps.

Because of mileage some users may only get a 6Mbps signal, yet it is still

treated as 8Mbps at the redistribution center). This does not mean that only 5 or

7

1 6 users can be serviced by a DSLAM with one DS3 (45 divided by 8 equals

5.625). While each user has the potential for multi-Mbps speeds, the user will

only receive the bandwidth that is available.

For ADSL service at NationsBank Plaza and any other potential buildings,

users will be offered a "best-available" rate. This means all the users will be tied

into the same distribution of bandwidth. There is a way to cap the bandwidth for

each user. For example, the DSLAM can put a maximum amount of bandwidth

available for a certain user of number of users.

How many users can a DS3 serve and what maximum should be put on

each individual user? Typically there is a I to 25 active user to idle user ratio in

the data industry. However, these figures are not necessarily accurate for

NationsBank Plaza. In fact, there is no way to estimate the user ratio without

attaining data from a similar work environment. There are a number of different

types of users that use different amounts of bandwidth during a typical day. For

example, a user type 'A' may only periodically check email, and surf the Internet

while user type 'B' checks email every 15 seconds and is running a web server.

Obviously user type A and user type B require different amounts of bandwidth.

Section 7: User types and Mathematical Modeling

I

With data about different user types that will be encountered in an ADSL

distribution system at NationsBank Plaza, a model could be created to simulate

what types of bandwidth distribution will be observed. Unfortunately, creating

data for different user types requires observation of different users. Once an

1

internet service is established, the ISP can usually observe how each user is

using their bandwidth. Though the ISP can label each user as being of a type

I'A', 'B', 'C', etc., service providers usually don't keep records of such data. Nova

Internet Services, for example, observes users referred to as "garners." The

1 gamer user type, requires all the bandwidth available to maximize the speed of

internet gaming, which has become a popular trend for many modem users.

8

INova Internet Services disagrees with the idea of a 1 to 25 user to line ratio.

I Instead, Nova claims that a simple figure cannot be used for the estimation of

bandwidth needed to service a population.

I

The best solution for the problem of bandwidth distribution is trial-by-error.

Once the ADSL service is established, monitor the users and bandwidth

available.

Also for the purposes of this project, bandwidth caps will not be applied.

IIn order to approximate profit margins. The organizations involved in this project,

Broadcast Towers and Cushman & Wakefield, have asked to demonstrate break

I even points for a homogeneous user type assuming a 20% effective market.

Section 9: Overview of the ADSL Service

Basic Service Price list

Costs for ADSL clients

Typical price per user: $60/month

Set up cost per user: $400/user

Modem cost $250.00/per user

Notes: The basic service provides each user with a best-available rate on

a dedicated ADSL connection.

Section 10: The Costs of an ADSL Distribution System

DSLAM

I$2000 for initial system

$38,400 per 48 slot hub.

INotes: The cost for the DSLAM vary depending upon which model is to

I be used. Broadcast Towers has not decided which DSLAM is appropriate for the

this project but needs to spend a minimum of $2000 on the initial system. The

- 48 slot hub is a shelf that is added to the DSLAM system. Shelves for this

project will be added by a factor of 48. For each 48 slot shelf, 48 users can be

provided service

T3 (also called a DS3)

$1 0,000/month

Notes: The cost of the T3 may vary depending upon the provider. The

listed cost is the estimated cost Broadcast Towers expects to pay for its T3

connection.

Section 11: A 3 Year Cash Flow for an ADSL Distribution System

For the purposes of this project many assumption were made in

accordance with Broadcast Towers' and Cushman & Wakefield's expectations.

The business population of the three buildings in which ADSL services will be

distributed is approximately 15,000. Of the 15,000 people, Broadcast Towers

expects a market of approximately 20%, about 3000 potential users. In order to

keep the economic layout as simple as possible, Broadcast Towers is assuming

a user sign up rate of 2% per 3 month period. Below is a breakdown of these

assumptions:

20% of the buildings' populations are potential clients for ADSL service

(3000 users).

2% of the potential clients will sign up every 3 month period (60 users).

The economic spreadsheet for the ADSL distribution system also does not

include any additional labor costs. This figure must be added later, once a labor

force can be estimated.

10

Please refer to Appendix B to view the spreadsheet which describes a the

first 3 years of the estimated ADSL distribution for Broadcast Towers. Each year

is divided into four three-month periods. The totals for each period are listed at

the bottom of the spreadsheet, and the total revenue and total profit for the first 3

years of operation are listed in the bottom right corner. This layout describes

how many users are included in the system for each period. A large cost is

attributed to the DSLAM equipment. The DSLAM serves clients in blocks of 48,

so there is a denoted loss when a shelf on the DSLAM is not being maximized.

11

Section 12: Analysis and Conclusions

Given the assumptions of the client market at the three buildings, an

ADSL distribution service begins to create profit after the sixth 3 month period.

During period 5 (-$28,800) and period 9 ($14,400), the profits decrease

considerably (refer to Chart I below). This is due to the addition of two shelves

(in contrast to one shelf) for the DSLAM that is needed to support the amount of

users during those periods. Over 3 years of operation, a potential $192,000 of

profit can be generated from this service. The factor which should be considered

by the building owners and Broadcast Towers, is labor work force for an ADSL

service. How much profit will be decreased by the addition of labor. Other than

labor, the idea of creating an Internet Service Provider through the use of ADSL

technology could be very profitable for Broadcast Towers.

Chart I

Profits

100000

80000

60000

40000

20000

0 a.-20000

-40000

-60000

-80000

------- ------

---- --------

71H1!

__.__Serieslj

Periods 1-12

12

Appendix A

DIAGRAM —A

FLOOR PLAN DEPICTING ADSL DISTRIBUTION SYSTEM

DS3 OR T3, WIRELESS ENTRY

SHARED TELECOM. FACILITY

69

(LOCATION OF DSLAM) 72 71 70

68 I ______ __________ RISER FACILITY 67 66 65 64 63 62 61 60 59 58 57 56 55 54 53 52 51 50 49 48 47 - 46 45 - 44 - 43 42 41 40 - 39 38 37 36 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12

10 9 - 8 7 - 6 - 5

GROUND _•_4___••_••••_•__•_____: _____________ -

COPPER NETWORK

Broadcast Towers, Inc. ADSL DISTRIBUTION DATE: 5/1/ 98 3612 NationsBank Plaza Broadcast 901 Main Street

Tower i Dallas Texas 75202 (214) 761-6135

NATIONSBANK PLAZA

DRAFTED BY: BLAINE TWILLEY FAX (214) 761-6128 RENAISSANCE TOWER

BROADCAST TOWERS, INC.___________ Email: btobtoweracom ONE MAIN PLACE

DIAGRAM B

ADSL FLOW DIAGRAM

T3 or DS3USER ____

DSLAM

LOCATED IN STF

IOOOOOOOOi USER

=.I.I.I.I.x.1 -^ /̂/XIXEXE

FAMME-011

DATE: 5/1/98

roadcast Broadcast Towers, Inc. ADSL DISTRIBUTION 3612 NationsBank Plaza 901 Main Street

(214) 761-6135NATIONSBANK PLAZA

DRAFTED BY: BLAINE TWILLEY Towers Dallas, Texas 75202

FAX (214) 761-6128 RENAISSANCE TOWER

BROADCAST _TOWERS, _INC.______________ Email: btobtowers.com ONE MAIN PLACE

Appendix B

Cash Flow for ADSL Distribution

Initial Costs Period 1 Period 2 Period 3

Users acti 60 120 180

Change in users 60 60 60

DSLAM -2000 Change in shelves Shelves required

Unused Ports

Loss on Ports

T3 costs

Total Revenues Monthly charges Set up Charges

Totals -2000

Year 1 end Year 2 end Year 3 end

Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12

240 300 360 420 480 540 600 660 720

60 60 60 60 60 60 60 60 60

-76800 -38400 -38400 -38400 -76800 -38400 -38400 -38400 -76800 -38400 -38400 -38400

2 1 1 1 2 1 1 1 2 1 1 1

2 3 4 5 7 8 9 10 12 12 14 15

36 24 12 0 36 24 12 0 36 24 12 0

-28800 -19200 -9600 0 -28800 -19200 -9600 0 -28800 -19200 -9600 0

-30000 -30000 -30000 -30000 -30000 -30000 -30000 -30000 -30000 -30000 -30000 -30000

34800 45600 56400 67200 78000 88800 99600 110400 121200 132000 142800 153600

10800 21600 32400 43200 54000 64800 75600 86400 97200 108000 118800 129600

24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000

-72000 -22800 -12000 -1200 -28800 20400 31200 42000 14400 63600 74400 85200

Total Revenue 1130400

Total Profit 192400

1998-05 Spring 1998

ADSL Distribution System for Broadcast Towers, Inc.

Robert Blaine Twilley

ADSL Distribution System for Broadcast Towers, Inc.

by Robert Blaine TwHIey

Section 1: Overview of Broadcast Towers, Inc.

The primary purpose of this project is to assist Broadcast Towers, Inc.

with its business planning and network design of an ADSL distribution system.

Broadcast Towers specializes in assisting property management firms and

building owners create additional revenues from telecommunication facilities.

For Broadcast Towers, a telecommunication facility, or potential

telecommunication capability, may exist on an empty rooftop, an existing

electrical riser, or even a telephone closet. In many cases, these different

components of a building can be used to generate extra revenues for building

owners. Broadcast Towers represents the telecommunication facility

management for building owners on a national scale.

The opportunity to create revenue through the use of an ADSL distribution

system, described in Section 5, involves the property management firm at

NationsBank Plaza in Dallas, Texas. The NationsBank Plaza, located at 901

Main Street in downtown Dallas, is one of the largest office buildings in the

metro-plex. The building boasts 73 floors, a 922ft rise - the tallest in Dallas, over

1.9 million square feet and a business population of 8,000 people. The building

houses an extensive range of internet and wireless capacity providers and

carriers with one of the most state-of-the-art communications centers in the

world. With over 100 different telecommunications clients, the communications

center is enclosed on the 72nd and 73 d floors of the building. Another relevant

feature of this efficient structure, which will contribute to this project, is a private

copper network that interconnects NationsBank Plaza to Renaissance Tower,

and One Main Place which are two of the adjacent buildings (Diagram A,

Appendix A).

The property management firm at NationsBank Plaza, Cushman &

Wakefield, has been introduced to the idea of offering high speed connectivity to

the internet through an ADSL distribution system. The general manager of

Cushman & Wakefield at NationsBank Plaza has expressed an interest in

I

1 1

Ipursuing a business agreement to create revenues for the building owners with

Ian ADSL system that provides services for the building tenants. This report

should facilitate any decision made by the building owners at not only

INationsBank Plaza, but also, the other two properties previously mentioned.

ISection 2: Commercial Internet

1

Currently businesses use several different options to connect to the

internet. The most economical method for any given business is to connect each

I of their users with dial-up modem accounts through an Internet Service Provider

(ISP). Dial-up accounts usually range from $5 to $30 per-month/per-user

1 depending upon the service provider and the type of service being provided.

I

Most dial-up accounts use modems, which can be any of following 5 speeds:

14.4 Kbps, 28.8 Kbps, 33.6 Kbps, 56.6 Kbps, and 128 Kbps ISDN. The 128

I

Kbps ISDN, or Integrated Services Digital Network, line modem uses a different

type of delivery system than the other 4 options. The speed for ISDN is much

Ihigher; however, an ISDN line must be leased from a local telephone provider as

well as the fee that must be paid to the ISP (in many cases the ISP for ISDN is a

Ilocal telephone company). This increases the cost of ISDN service to

approximately $100/month per user.

IThe speeds, represented on a Kbps scale, attribute to the speed by which

data can be transferred over the internet. Internet speed is often referred to as

I "bandwidth," and is expressed in Mbps or Megabits per second (Millions of bits

per second). Kbps refers to Kilobits per second or thousands of bits per second.

I Data transfers are becoming much more dependent upot1 higher speed

connections to the internet. Its been estimated that Internet sales will soar from

I $8 Billion today to $300 Billion in the next five years. Because so much business

in conducted over the internet, and business is expected to grow on the internet, I high speed connections, or high speed connectivity, is becoming more important

to commercial users. So far, this report has only addressed slow speed

1 2

Liconnections to the internet through modems with the exception of ISDN which

Ihas medial connectivity results. What are the options for businesses that need

high speed connectivity to the internet?

IFor most corporate sites, TI service is the answer to internet connectivity

issues. TI service is a connection to the internet with 1.544Mbps which is

Iusually branched through the use of a hub to each individual user. Unlike dialup

accounts, Ti service usually is accompanied by the implementation of a Local

I Area Network (LAN). Ti's are usually leased from telephone companies which

provide the "pipe" that connects a site to the internet. For many small companies I only partial Ti's are leased. At Broadcast Towers, for example, a 256Kbps TI is

leased for internet connectivity. This 256Kpbs is only a fraction of the 1 1.544Mbps that a full TI offers. Other larger companies require more than a TI

I connection. Where a TI is not satisfactory, multiple Tl's can be leased at a

reduced rate and "muxed" together. "Muxing" involves the use of a multiplexer to

I combine the bandwidth signal and redistribute it. For even larger company a T3

can be leased. A T3 connection provides users with 45Mbps of bandwidth to the

iinternet.

The expensive factor involving TI and T3 bandwidth is the means by

which the bandwidth is delivered. As mentioned before, most Ti's are leased by

telephone service providers like Southwestern Bell. A business could call

ISouthwestern Bell and request a TI. The phone company uses what means are

available to deliver the TI speeds. Often the means by which the Ti is delivered

I is referred to as a "TI Pipe." The TI pipe is generally a dedicated line between a

telephone company's CO, or Central Office, and the user or users. Because the

I lines are dedicated and require upkeep, they are very expensive to lease.

r]

I I 3

Ill Section 3: An Overview of ADSL Technology

ADSL, Asymmetrical Digital Subscriber Line, is a technology that can

Iprovide high amounts of internet bandwidth over copper lines, or copper pairs.

Because the technology surrounding ADSL is very technical, this report will focus

Ion describing an "ADSL Distribution System" in its simplest ideas.

Basically, the business behind ADSL is to provide commercial users with

I high speed connections to the Internet at an economical cost. In theory, ADSL

service should be much less expensive than TI services due to use of ordinary I copper lines which are relatively inexpensive when compared to Ti Pipes (see

Section 2). There are is not a set structure for an ADSL network; in fact, there is I no thing "ADSL ADSL is data such as an network." simply a method of getting

I from point A to point B at a high speed and a low cost.

ADSL modems and network equipment transmit data on two frequencies.

I For each copper pair, there are two frequencies for bandwidth at which data can

be transmitted, hence the name "copper pair." For most modems and Ti's all

Idata is transferred at symmetrical rates. In other words, a 28.8 modem sends

- and receives, or uploads and downloads, at 28.8Kbps. However, ADSL

Imodems are asymmetrical due to the different frequencies in copper pairs.

ADSL modems can receive data on the downstream, or download, at up to

I8Mbps and send data on the upstream, upload, at 640Kbps. This is a

tremendous difference when compared to typical modems. In fact, ADSL can be

I more than five times faster than TI service on the downstream.

Is upstream speed important? For most users using the internet uploads I are very uncommon. Typically, when using the internet to gather data with an

internet browser, the only uploads occur when the user sends out a signal to the I file or web server where the data is located. The data sent to a server when

browsing is only about 1Kb, but the data contained on a typical webpage is I about 30K-200K. File transfers also require upstream speed. If one user wants

I 1 4

Ito send a file to a user(s) or to a file server, he or she must rely on transmit

ispeed.

Section 4: Residential Service and ADSL

1

ADSL providers typically have many obstacles when trying to provide their

services to residential users. One of the important limitations of ADSL

I technology is that it is mileage sensitive and has a range of only 3 miles. Also

the copper networks for residential areas are usually owned by telephone

I companies. To provide an ADSL service for one particular residential user, the

ADSL provider must lease a copper line from the telephone company between

I the provider's distribution center and the residential user. The copper line

I

provided by the telephone company is not point to point; instead the teased

copper pair goes from the ADSL provider to the CO (Telephone Central Office)

I

then to the residential user. In order to create an effective 3 mile radius the

ADSL provider would have to locate their distribution center as close as possible

Ito the CO or possibly co-locate ADSL equipment within the CO.

Why aren't the telephone companies interested in facilitating the ADSL

Iproviders? Because the service costs for ADSL are so inexpensive compared to

the cost of Ti service, most telephone companies are not interested in giving

Itheir users an option between ADSL and TI pipes.

In order to expand their network of influence into a new arena, Broadcast

ITowers' original objective was to provide residential ADSL service; however,

after careful consideration, the residential plan was put on hold. Many factors

I lead Broadcast Towers to believe that a residential ADSL distribution system

could be created with small profit margins. Also, once the ADSL service reached

I a peak, the telephone companies could easily clone Broadcast Towers service at

a much lower cost.

1 5

I I

I

Section 5: Broadcast Towers' ADSL Distribution System

To provide ADSL service to commercial users at NationsBank Plaza,

Broadcast Towers must first purchase a large amount of bandwidth to be

redistributed. There are many options to attain bandwidth, especially since

Broadcast Towers contracts all telecommunications clients in the building.

Basically Broadcast Towers must first decide how much bandwidth is needed for

an efficient ADSL network that services the building and any potential buildings

as noted in Section 1 (Renaissance Tower and One Main Place). The bandwidth

is brought into the building by means of "pipe" or wireless transmission (wireless

transmission indicates the bandwidth is transferred through the use of Ti or T3

radio) and taken to a facility that is the center of the distribution. For Broadcast

Towers, the best location for its distribution center is on the 26th Floor in the

Shared Telecommunications Facility, or STF, which houses the building's copper

network (i.e. telephone lines). The STF must house one very important piece of

ADSL equipment, the DSLAM, or Digital Subscriber Line Access Multiplexer.

The DSLAM in the simplest terms, is one huge hub for data transfer. The

bandwidth is brought into the DSLAM and then redistributed to each individual

user over the copper pairs. A schematic for the location of the DSLAM and the

ADSL distribution can be found in Appendix A, Diagrams A&B.

In a classical model of ADSL distribution, the range for the ADSL

transmission would not be calculated point to point (DSLAM to user). Instead,

the DLSAM would feed a signal over the copper pairs, which would go back to

the CO that is closest to NationsBank Plaza, and return to each user station

(DSLAM to CO to user). Because ADSL is mileage sensitive with a range of 3

miles, much of the bandwidth would be lost because of the CO's distance. The

DSLAM could be located at the CO, to reduce the signal loss, but in the case of

NationsBank Plaza, the CO is completely removed from the system design.

I I I I I I I I ! 1 I I

6

IRemember that Broadcast Towers manages a private copper network which is

Iowned by the building owners at NationsBank Plaza, Renaissance Tower, and

One Main Place. This factor allows the ADSL distribution system to keep a

Istrong signal throughout its network and a point to point distribution (DSLAM to

user).

ITo get started, Broadcast Towers is planning to construct the simplest

level of ADSL distribution. Each ADSL client will need to purchase an ADSL

I modem which connects them to the DSLAM by means of copper. For a

company to purchase ADSL service for a number of employees, the company

I must pay on a per user basis. Eventually, Broadcast Towers will have to offer its

ADSL clients more alternates for ADSL or DSL service. For example, a I perspective customer could in fact purchase a TI over an ADSL distribution

' center, The TI pipe would make use of copper pairs to distribute the bandwidth

to a LAN that exists at the users location. The TI could then redistribute

I connectivity to a number of users. Of course a Tl is symmetrical bandwidth

(1.5Mbps both directions), so the DSL technology called SDSL, or Symmetrical

1 Digital Subscriber Line would have to be implemented to carry the TI signal.

Section 6: Bandwidth and the Redistribution of Bandwidth

IAs noted in Section 5, an initial amount of bandwidth must be purchased

to redistribute over an ADSL distribution System. One of the major factors of the

I economics of this project, will be covering the cost of the purchased bandwidth

that is to be redistributed. Broadcast Towers wanted the economic to include the

I initial purchase of a full T3, also called a DS3, or Digital Signal level 3. The DS3

provides the redistribution of 45Mbps of bandwidth. With ADSL technology,

I each individual user could receive up to 8Mbps on the downstream of this

I 45Mbps from the DS3 (Remember that not all users will get speeds up to 8Mbps.

Because of mileage some users may only get a 6Mbps signal, yet it is still

treated as 8Mbps at the redistribution center). This does not mean that only 5 or

1 7

6 users can he serviced by a OSLAM with one DS3 (45 divided by 8 equals

5.625). While each user has the potential for multi-Mbps speeds, the user will

only receive the bandwidth that is available.

For ADSL service at NationsBank Plaza and any other potential buildings,

users will be offered a "best-available" rate. This means all the users will be tied

into the same distribution of bandwidth. There is a way to cap the bandwidth for

each user. For example, the DSLAM can put a maximum amount of bandwidth

available for a certain user of number of users.

How many users can a DS3 serve and what maximum should be put on

each individual user? Typically there is a 1 to 25 active user to idle user ratio in

the data industry. However, these figures are not necessarily accurate for

NationsBank Plaza. In fact, there is no way to estimate the user ratio without

attaining data from a similar work environment. There are a number of different

types of users that use different amounts of bandwidth during a typical day. For

example, a user type 'A' may only periodically check email, and surf the internet

while user type 'B' checks email every 15 seconds and is running a web server.

Obviously user type A and user type B require different amounts of bandwidth.

Section 7: User types and Mathematical Modeling

With data about different user types that will be encountered in an ADSL

distribution system at NationsBank Plaza, a model could be created to simulate

what types of bandwidth distribution will be observed. Unfortunately, creating

data for different user types requires observation of different users. Once an

internet service is established, the ISP can usually observe how each user is

using their bandwidth. Though the ISP can label each user as being of a type

'A', 'B', 'C', etc., service providers usually don't keep records of such data. Nova

Internet Services, for example, observes users referred to as "gamers." The

gamer user type, requires all the bandwidth available to maximize the speed of

internet gaming, which has become a popular trend for many modem users.

I I

I I I I I 1 I I [1 k/

8

INova Internet Services disagrees with the idea of a 1 to 25 user to line ratio.

IInstead, Nova claims that a simple figure cannot be used for the estimation of

bandwidth needed to service a population.

IThe best solution for the problem of bandwidth distribution is trial-by-error.

Once the AI)SL service is established, monitor the users and bandwidth

I available.

Also for the purposes of this project, bandwidth caps will not be applied.

In order to approximate profit margins. The organizations involved in this project,

Broadcast Towers and Cushman & Wakefield, have asked to demonstrate break

I even points for a homogeneous user type assuming a 20% effective market.

I Section 9: Overview of the ADSL Service

Basic Service Price list

Costs for ADSL clients

ITypical price per user: $60/month

Set up cost per user: $400/user

IModem cost $250.00/per user

1

Notes: The basic service provides each user with a best-available rate on

a dedicated ADSL connection.

ISection 10: The Costs of an ADSL Distribution System

IDSLAM

I $2000 for initial system

$38,400 per 48 slot hub.

1 9

INotes: The cost for the DSLAM vary depending upon which model is to

Ibe used. Broadcast Towers has not decided which DSLAM is appropriate for the

this project but needs to spend a minimum of $2000 on the initial system. The

I48 slot hub is a shelf that is added to the DSLAM system. Shelves for this

project will be added by a factor of 48. For each 48 slot shelf, 48 users can be

Iprovided service

I T3 (also called a DS3

$1 0,000/month

INotes: The cost of the T3 may vary depending upon the provider. The I listed cost is the estimated cost Broadcast Towers expects to pay for its T3

connection.

Section 11: An Economic Descri ption of the ADSL Distribution System

I

For the purposes of this project many assumption were made in

accordance with Broadcast Towers' and Cushman & Wakefield's expectations.

IThe business population of the three buildings in which ADSL services will be

distributed is approximately 15,000. Of the 15,000 people, Broadcast Towers

Iexpects a market of approximately 20%, about 3000 potential users. In order to

keep the economic layout as simple as possible, Broadcast Towers is assuming

I a user sign up rate of 2% per 3 month period. Below is a breakdown of these

assumptions: I. 20% of the buildings' populations are potential clients for ADSL service

(3000 users). I. 2% of the potential clients will sign up every 3 month period (60 users).

The economic spreadsheet for the ADSL distribution system also does not I include any additional labor costs. This figure must be added later, once a labor

force can be estimated.

10

IPlease refer to Appendix B to view the spreadsheet which describes a the

Ifirst 3 years of the estimated ADSL distribution for Broadcast Towers. Each year

is divided into four three-month periods. The totals for each period are listed at

Ithe bottom of the spreadsheet, and the total revenue and total profit for the first 3

years of operation are listed in the bottom right corner. This layout describes

Ihow many users are included in the system for each period. A large cost is

attributed to the DSLAM equipment. The DSLAM serves clients in blocks of 48,

Iso there is a denoted loss when a shelf on the DSLAM is not being maximized.

I Section 12: Analysis and Conclusions

I Given the assumptions of the client market at the three buildings, an

I ADSL distribution service begins to create profit after the first 3 month period.

During period 5 (-$1,800) and period 9 ($41,400), the profits decrease

I considerably. This is due to the addition of two shelves (in contrast to one shelf)

for the DSLAM that is needed to support the amount of users during those

I periods. Over 3 years of operation, a potential $516,000 of profit can be

generated from this service. The factor which should be considered by the

Ibuilding owners and Broadcast Towers, is labor work force for an ADSL service.

How much profit will be decreased by the addition of labor. Other than labor, the

Iidea of creating an Internet Service Provider through the use of ADSL

technology could be very profitable for Broadcast Towers. I

1 11

I

Appendix A

1 I I I I I I I I I I I 1 I I I I I I

DIAGRAM A

FLOOR PLAN DEPICTING ADSL DISTRIBUTION SYSTEM

DS3 OR T3, WIRELESS ENTRY

SHARED TELECOM. FACILITY

(LOCATION OF DSLAM) 72 71 70 69 68 67 66 65

RISER FACILITY

64 63 62 61 60 59 _____________ _______ 58 57 56 55 54 53 52 51 50 49 4847 46 45 - 44 - 43 42 - 41 - 40 - - 39 38 37 36

33 32 31 30 29 28 27

25 26

24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 - 8 7 - 6 - 5 -

GROUND

COPPER NETWORK

Broadcast Towers, Inc. ADSL DISTRIBUTION DATE: 5/1/98 3612 NationsBank Plaza Broadcast 901 Main Street

Towers Dallas, Texas 75202 (214) 761-6135 NATIONSBANK PLAZA

DRAFTED BY: BLAINE TWILUY FAX (214) 761-6128 RENAISSANCE TOWER

BROADCAST TOWERS, INC. ____________ Email: btobtowerscom ONE MAIN PLACE

1 I I I I 1 I I I 1 I I I I I I I I I

DIAGRAM B

ADSL FLOW DIAGRAM

DATE:- 511198

roadcast Broadcast Towers, Inc. ADSL DISTRIBUTION 3612 NationsBank Plaza 901 Main Street

(214) 761-6135 NATIONSBANK PLAZA

DRAFTED BY: BLAINE TWILLEY

Tower Dallas, Texas 75202

FAX (214) 761-6128 RENAISSANCE TOWER

BROADCAST _TOWERS, _INC.Email: btobtowers.com ONE MAIN PLACE

I I

L I Li Li I I Appendix B

I [I I I I

I I

- - - - - - - - - - - - - - - - - - -

Year 1 end Year 2 end Year end Initial Costs Period I Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12

Users activated 60 120 180 240 300 360 420 480 540 600 660 720 Change in users 60 60 60 60 60 60 60 60 60 60 60 60

DSLAM .2000 -76800 -38400 -38400 -38400 .76800 -38400 -38400 -38400 -76800 -38400 -38400 -38400 Change in shelves 2 1 1 1 2 1 1 1 2 1 1 1 Shelves required 2 3 4 5 7 8 9 10 12 12 14 15 Unused Ports 36 24 12 0 36 24 12 0 36 24 12 0 Loss on Ports -28800 -19200 -9600 0 -28800 -19200 -9600 0 .28800 -19200 -9600 0

T3 costs -3000 -3000 -3000 -3000 -3000 -3000 -3000 -3000 -3000 -3000 -3000 -3000

Total Revenues 34800 45600 56400 67200 78000 88800 99600 110400 121200 132000 142800 153600 Monthly charges 10800 21600 32400 43200 54000 64800 75600 86400 97200 108000 118800 129600 Set up Charges 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000

Totals -2000 -45000 4200 15000 25800 -1800 47400 58200 69000 41400 90600 101400 112200

Total Revenue 1130400

Total Profit 516400