Can Telcos avoid a speed race with cable?

Perhaps the other reason telcos may not want to get into a speed contest with cable operators is the cost. Because cable is inherently a shared medium, it doesn't typically need the same kind of bandwidth at the aggregation points. For telcos, DSL is a dedicated pipe and must be matched with similarly large bandwidth pipes at aggregation. In some cases, that adds a significant cost element, but the migration to Gigabit Ethernet uplinks from DSLAMs helps, said Don McCullough, director of product marketing for Entrisphere.

“Once you're on Ethernet end-to-end, you're on a different price curve,” he said. “What we've seen so far is we've been able to keep on the Moore's law cost curve about as fast as the telephone companies are beating another chunk of bandwidth out of us at the same cost.”

Even with the reduced cost, the emergence of on-demand video services is certain to push the bandwidth requirements up even further. Layer on top of that the possibility of Internet access in excess of 50 Mb/s, and you end up with a bandwidth demand that is almost exponentially higher than current requirements, said Marco Wanders, chief marketing officer of Redback Networks.

“There are technologies to ensure that the bandwidth at the edge is still limited. In IPTV, it's multicasting. The trend now, though, is that multicast is going to be big in terms of numbers of users. You will definitely start needing more bandwidth in the aggregation layer.”

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