From the pages of AGL Magazine
Part Two — For Tower Cloud, the migration from Ethernet to dark fiber readies wireless carriers for 5G and supports continued use of macro towers as the foundation for mobile networks.
March 15, 2016 — Tower Cloud is a backhaul specialist that started when T1 1.544-Mbps dedicated digital data transmission lines from telephone companies were the main transport used for cell tower backhaul. Once fourth-generation (4G) broadband mobile telecommunications initiatives started, Tower Cloud grew and increasingly built fiber connections to towers, providing Ethernet backhaul. The company serves Georgia, Alabama, Florida and South Carolina, including large cities such as Atlanta, medium-sized cities and rural areas. Tower Cloud built its business during the transition from T1 circuits to lit Ethernet.
Ron Mudry, the company’s founder, president and CEO, said Tower Cloud is increasingly serving small cells and other businesses to load its fiber network. His experience includes starting Progress Telecom in 1998 to provide fiber and backhaul services. He led negotiations to sell the company to Level 3 Communications.
In its early days, Tower Cloud used microwave for as much as 20 percent of its connections and still uses microwave in some rural areas. Today, Mudry sees macro tower backhaul moving more toward the use of fiber, other than in extremely rural areas. Mudry spoke at the Tower & Small Cell Summit session “Macro Tower Backhaul Solutions” led by Jennifer P. Clark, vice president of research at 451 Research, a New York-based market research and consulting company.
The past five years has seen backhaul rotating existing T1 sites onto Ethernet service, a task that Mudry said the wireless carriers have done effectively. The current cycle of macrosite densification has some carriers adding more sites than others, along with migrating existing sites from lit Ethernet to dark fiber, which is fiber leased by individuals or companies to use in establishing connections among their own locations. Mudry said the shift will change the way macro backhaul networks are operated and how the use of small cells will grow. “Macrocell site backhaul is not separate from the small cell backhaul,” he said. “They’re going to be integrated, and what happens in small cell is going to affect what happens in the macro side.”
Another aspect Mudry identified as important is the forthcoming renewal cycle for fiber leases. What began as long-time T1 contracts and continued as Ethernet contracts usually have five-to-seven-year terms, and they’re beginning to expire. Meanwhile, carriers are focused on what to do with fiber network providers such as Tower Cloud to expand macro backhaul and cell site densification, and whether to renew with their current backhaul providers.
Mudry said the relative quality of backhaul service will have much more effect during carriers’ reevaluation of their backhaul providers. The selection of backhaul providers during initial deployments emphasizes coverage and cost. Mudry said some of the initial providers aren’t performing up to the standards that the carriers want. “You’re going to see some migration of the existing base because of quality issues,” he said. “If you can perform well, you can take market share from your competitor.”
Macrocell site backhaul remains highly important for fiber providers, and Mudry said the embedded business is growing about 8 percent per year. “It doesn’t sound like a large percentage growth, but it’s on a huge base,” he said. “It’s a big revenue opportunity, and we’re trying to get as much of that as we can.”
Mudry said carriers are spending more money on macrocell site backhaul than small cell backhaul. “It’s not the huge growth opportunity that it was when it shifted from T1 to Ethernet,” he said. “Nevertheless, I see new towers coming in. Density is a big growth opportunity.”
The shift from Ethernet to dark fiber will enable the building of more fiber infrastructure, and Mudry said that in this growth phase, the fiber network can be designed with backhaul and wireless networks in mind. He said that much of the initial wave of fiber construction involved networks built for enterprise services, carrier hotels and data centers. The fiber didn’t extend to the right places for cell site backhaul. “A migration from lit service to dark service by one or more of the large carriers is going to change the fiber landscape in many of these markets, and wireless service is going to be a big part of that,” he said.
Bandwidth use per tower basis is growing. Mudry said it’s near an average of 100 MBps per tower today, and some towers at aggregation points use 300 Mbps or 500 Mbps. “Carriers are now talking about 1 GBps per site,” he said. “They’re not spending all this money on dark fiber because they believe bandwidth growth is flat. They believe it will skyrocket. Having their mobile network sites talking to each other more on the edge means a faster network with less latency and more direct connection.”
For Mudry, the macro world is still the heart of the network wireless carriers. How that part of the business is managed is going to enable the migration to small cell backhaul and whatever happens with fifth-generation (5G) cellular when it comes.
Microwave for Backhaul
Although Tower Cloud used microwave for backhaul to a greater extent in the beginning, Mudry said that, in the long run, many of those microwave legs should have been fiber to begin with. Using microwave comes with more expense because of paying tower rent, usually on both ends. Microwave is not quite as scalable as fiber and isn’t as easy to tap into. Because of the savings on operating expense, it’s affordable to invest more capital in fiber to reach a particular site.
The capacity growth of microwave is there on paper, but in practice, Tower Cloud hasn’t seen it scale as rapidly as necessary. Although it’s possible to handle the growth of one carrier with microwave, it becomes difficult to add a second or a third carrier or to add another tower down the line, which requires aggregating the data traffic through the intermediate tower. Then, the initial length becomes constrained. For this reason, Mudry said bringing fiber deeper into an area makes sense in the long run. “The carriers don’t want to be replacing these backhaul lengths every five years, and we don’t, either,” he said.
In Tower Cloud’s experience, if a cell site doesn’t meet the economics for fiber, the carriers aren’t willing to pay more. “In metro areas where data traffic is growing, fiber is going to be the choice,” he said. “But if you can’t get it done with fiber, the carriers are likely to use their own microwave or just stay with the local exchange carrier until they can get a better solution.”
Mudry said that microwave will have a place in backhaul in lower-capacity growth areas where it’s there for coverage purposes. Where the capacity is growing, bandwidth is growing, and backhaul providers will need fiber for the capacity. “It’s easier to add sites into fiber than to tap into a point-to point-microwave length. Fiber is more flexible for future growth.”
Nevertheless, once a microwave length is in place, its owner doesn’t usually take it down as long as its meeting requirements. “Unless it needs to be overbuilt for capacity reasons, why fix it if it’s not broken?” he asked.
Mudry said that after the evolution to Ethernet backhaul, carriers mostly were looking for availability — is the service up or is it down? Now, there’s more focus on latency (the interval between initiating a transmission and receiving or detecting the result) and other performance factors. Measuring them is essential to revealing service quality. He mentioned the carriers’ wanting a live portal, which would offer real-time viewing of the fiber network’s performance statistics via Internet access.
“All the carriers would love to have a live portal,” Mudry said. “I’d love to have a live portal. I can go to my network operating center and see it, of course. I don’t think it’s a table stake.” [A table stake refers to a minimum level of investment or technology.] “Many carriers have been talking about portals since I have been in this business for 20 years, and most service providers never get there with them because they’re just not a table stake. The carriers know whether the fiber network is performing or not without a portal. You do have to provide the monthly reports and have meetings with the carriers. But the most important thing to the carrier is what you do when there’s a problem.”
Mudry framed the situation with questions: “How do you handle the outage? How do you report about it after an incident has occurred? It doesn’t have to be a fiber cut or an outage. It can be a packet loss problem in a particular area, a node getting confused or something like that.” In those situations, Mudry said carriers want fiber providers to reveal more detail and demonstrate responsibility.
“Carriers want to see that you’re not pointing a finger the other way and you’re doing something about it,” he said. “That’s the kind of reporting that differentiates between the high-quality performers and the ones that are so-so in the minds of the carriers.”
Effect of 5G
Wireless carriers continue to move the network intelligence (its processing capability) closer to the edge of the network. In Mudry’s view, 5G is going to be about centralized radio access networks C-RAN and other steps that enable a high degree of local connectivity. An example would be interaction between small cells and macrocells, using connections with low latency. It will increase the need for fast connections at the network edge, which will provide motivation for making fiber enhancement to the network.
In fiber networks, latency affects transporting the data traffic from the cell site to the mobile network’s switch, but Mudry said latency isn’t a problem when the switch is in the same market as the network tower. But intercity fiber routes can be too long to be useful. For example, if a macro tower served by a network switch is 200 miles away, it can cause latency problems. “Even today, the carriers’ one-way latency standards are 5 milliseconds to 8 milliseconds,” Mudry said. “When they talk about 5G, I hear talk of a need for 1 millisecond of latency.”
Light moves very fast, but it still takes a certain amount of time to cover a given span, and Mudry said that connections add to the time. Every connection box through which the fiber passes adds latency. “The answer is to take the intelligence further out in the network so the data doesn’t have to travel all the way back to the switch,” he said. “That’s going to increase the need not only for small cell aggregation hubs at the macros that are going to be talking to small cells, but you’re going to see more edge data centers and little places out in the network where they’re aggregating things and feeding video, and doing a lot of things that the wireline side of the business is doing today to improve the customer experience for people over the top.”
Over the top refers to the delivery of audio, video and other media over the Internet without the involvement of a multiple-system operator such as a cable TV service provider. “It’s obviously coming as a big service, and that’s going to come to the wireless networks equally and it’s going to cause more need for intelligence, collocation, and fiber connectivity out of the edge that is very fast from a low latency perspective,” Mudry said.
In conclusion, Mudry said macrocell site backhaul is a growing business. “There’s a big and better base there,” he said. “The bandwidth is growing. The migration to dark fiber is growing. The migration to dark fiber is probably the biggest question of what’s going to happen over the next couple of years on the macro side. Will all the carriers go that way? How far will the carriers take it that are going to dark fiber? Is it just going to be the big markets or will they go further? The further macro backhaul goes with dark fiber, the more it’s going to provide the foundation for everything else the carriers are trying to do with small cells and other things in 5G. That’s probably the most exciting thing that we see happening in the macro space right now.”