Comparative economic analysis between direct and indirect wiring in the copper-based local loop
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Comparative economic analysis between direct and indirect wiring in the copper-based local loop D-W Tcha and J-S Choi Korea Advanced Institute of Science and Technology, Korea In a copper-based local loop, a circuit pair is indirectly connected to each subscriber usually via a primary cross connection point (PCP) which acts as a buffer to absorb circuit demand ¯uctuations among subareas. But some telephone operators adhere to the classic practice of direct wiring based on technological preferences without taking advantage of cost-ef®cient ¯exibility points. We analyse the extra cost of maintaining the old practice of direct wiring over the popular one using ¯exibility points in a single PCP area. For that, the expectation of circuit shortages in subareas during a single replenishment period for the direct wiring is ®rst obtained. Exploiting the convexity of the expectation, we then present a procedure for optimally allocating circuits among subareas, which not only serves its own purpose of circuit provisioning for the direct wiring but also precisely calculates the extra cost over the indirect case. Keywords: telecommunications; inventory; allocation;
Introduction The traditional copper loop has a `tree and branch' structure as shown in Figure 1. One pair per telephone line is allocated to each customer, but the ¯exibility points, called Primary Cross-Connection Points (PCPs), are introduced to allow bundles of pairs to be split and diverted to meet circuit demands. The ®nal drop to customer premises is usually via a Distribution Point (DP), but some premises are allowed to be directly fed from the exchange. The pairs within cables between the exchange (or the central of®ce) and a PCP are designated as the Main side (or Feeder side) and the remaining part of the loop as the Distribution side.1,2 Generally, an exchange area is partitioned into areas, called PCP catchment areas (or PCP areas in short), which are further sub-divided into smaller areas called DP catchment areas (or DP areas). The PCP equipment makes a connection to a customer by simple adjustment of a jumper in its cabinet, thereby serving as a buffer to resolve discrepancies between the forecasted and actual demands of DP areas. However, some countries such as Korea and Japan do not take advantage of the cost-ef®cient ¯exibility of PCPs. That is, customer premises are directly wired from the exchange, the loop structure of which is still of the tree and branch type, but without using PCPs. The advantages of this deployment method are two-fold: costs of setting up and maintaining PCPs are not incurred, and the noise level is kept lower from the direct connection. The absence of PCPs, and therefore the resulting lack of ¯exibility, forces Correspondence: Dr D-W Tcha, KAIST, Graduate School of Management, 207-43 Cheongrayngri-dong, Dongdaemun-gu, Seoul, Korea. E-mail: [email protected]
telecommunications operators (telcos) to res
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