 a cost comparable with today's megabit class equipment (e.g., xDSL DSLAMs). The first step to individuate the key technology challenges is to assess the cost structure of the new access network. In Figure 11.12, the cost structure of an FTTH and an FTTB network is shown assum- ing deployment in the years 2004 and 2010 [21,22]. In both cases, a GPON installation is assumed, exploiting B class GPON with a 32 splitting ratio. However, the results would be not SO different if WDM-PON would be considered, but for a greater impact of the OLT equipment, that is almost comparable with the ONU. In order to evaluate the infrastructure costs, a medium European city is assumed as reference and the OPEX cost is evaluated for a period of 10 years. As assumed everywhere, civil work is not included, and it is assumed that the fibers are to be deployed in already existing tubes. Telecommunication Networks FTTB Y2004 FTTB Y2010 Building equip. CAPEX Building equip OPEX CPECAPEX OLTCAPEX Accessories CAPEX Fiber infrastructure CAPEX FTTH Y2004 FTTB Y2010 Vertical cabling CAPEX CPE+ONU CAPEX OLTCAPEX Accessories CAPEX Fiber infrastructure CAPEX FIGURE 11.12 Cost structure of FTTH and FTTB networks assuming deployment in the years 2004 and 2010 [21,22]. In both cases, a GPON installation is assumed, exploiting B class GPON with a 32 splitting ratio. From the figure, it is clear that the greater part of the CAPEX is due to the optical net- work termination: the building equipment in the FTTB case and the ONU in the FTTH case. On the other hand, the impact of the VDSL CPE cost in the FTTB case has been quite reduced passing from year 2004 to year 2008. This last figure is the effect of a great cost reduction of xDSL chips in the last few years. The cost of a WDM-PON ONU is almost always determined by the optical interface, while in the case of the GPON ONU, two elements determine the cost of the equipment: the optical interface and the GPON chip, including the GPON physical frame processor, the ranging protocol processor, and the Ether