Innovative First Mile Strategies Workshop
[courtesy of poster rlburtner on the Gilder board:]
---------begin:
FAC alerted me to the Innovative First Mile Strategies Workshop
sponsored by the Next Generation Internet Roundtable of CENIC. I
attended and was most impressed by the keynote address given by Bill
St. Arnaud, CANARIE. A number of key participants were calling for
separation of infrastructure and services. As St. Arnaud pointed out
telecom is one of the last bastions in which the utility controls both
the content and the pipes. I have summarized Bill's talk below from
his slides and included either summaries or abstracts of some of the
other presentations.
Innovative First Mile Strategies Workshop
CENIC Next Generation Internet (NGI) Roundtable
Fairmont Hotel, San Jose, CA
October 9, 2002
CENIC, the Corporation for Educational Network Initiatives in
California, is a joint venture of Stanford University, the University
of California, the University of Southern California, California
Institute of Technology, and the California State University System.
CENIC is a not-for-profit corporation that was formed "to facilitate
and coordinate the development, deployment, and operation of a set of
seamless and robust advanced network services throughout California".
Under a grant from the State of California, CENIC recently formed the
Next Generation Internet Roundtable "to identify the opportunities and
obstacles to providing gigabit Ethernet service throughout California
by 2010".
Abstracts of the presenters' talks and copies of many of the PowerPoint
slides are available at www.cenic.org/events. Eighty-eight persons
registered for the workshops. The introductory address by Tom West,
CENIC, was titled "California Here We Come: One Gigabit or Bust".
Workshop topics were: 1) What is the First Mile? Is There a Business?,
2) Ownership - Catalyze, Connect, Collaborate, 3) Really Fast Fiber.
4) Its All About the Pipes, and 5) Novel Wireless Approaches. I
attended all of the workshops and made a presentation as a participant
in the second workshop. Below I will summarize or reproduce the
abstracts of some of the most interesting papers.
Keynote Address by Bill St. Arnaud
Bill St. Arnaud, Senior Director of Network Projects, CANARIE Inc.,
gave an outstanding keynote address titled "Gigabit Internet to Every
Californian by 2010". His organization, CANARIE, is a private sector,
non-profit collaborative of 140 institutions in Canada whose objective
is to bring gigabit Ethernet service to all Canadians by 2005.
CANARIE is equivalent to Internet 2 in the United States and NGI (Next
Generation Internet) in California. His address was by far the most
important in establishing the case for gigabit Ethernet broadband and
outlining policies and strategies for implementing it with existing
technologies. Consequently, I will summarize it at some length.
St. Arnaud began by reviewing the historical rate of growth of various
types of telecommunications. It took nearly 75 years for the
telephone to reach 50% of households, 40 years for cable TV, 20 years
for the PC, and about 10 years for the VCR. In most cases the rate of
penetration was a function of cost per capita income with telephone
service being the most expensive because of its monopoly status. Once
a technology is perceived as having broad utilitarian value, price, as
opposed to features or applications drive penetration. Although each
year the PC has had new applications, low cost was the biggest driver
for widespread adoption in the home. It is well known that the driver
for low cost is competition. Studies have shown that the duopoly of
DSL and cable modems is actually a monopoly at this time. The cost of
services that they provide, especially data services, has been high
and increasing, although the cost of bandwidth beyond the first mile
(or last mile as others call it) has been rapidly decreasing.
The current reality is that most people who have DSL and cable modems
are reasonably satisfied. Those who cannot get either are very upset.
The reason for the satisfaction is that thus far there is only one
application that requires speeds greater than 1.5 Mbps (Morpheus/TiVo)
and the entertainment industry is making every effort to kill it.
Consequently, there is no business case for fiber-to-the-home that
depends on the existing telco models.
What really matters to citizens is not broadband. It is potholes,
spaghetti trees, street fixtures, and antenna rage. Consequently, any
gigabit broadband service to the citizen must minimize the above
concerns and not make them worse. In addition the technology should
not require a public subsidy for either capital infrastructure or
operations.
There is, however, a growing trend for monopoly services, such as gas
and electric, to move to competitive services in which there is
separation of transmission costs from product costs. Telecom is the
last bastion of monopoly operation where the same company provides
services and infrastructure. Consequently, government policy makers
are having increasing input on broadband access technologies to insure
competition. Experience has shown that private sector competition in
an open competitive level playing field is the best vehicle for
producing innovation and lowering costs. Therefore, governments
should not intrude into the marketplace unless there are significant
benefits to the economy and society as whole benefits when doing
nothing would do harm.
There are three potential forms of telecom competition: open access,
structural separation, and facilities-based competition. Roadways are
examples of competition through structural separation while parallel
railways, telecom lines, or gas pipelines are examples of
facilities-based competition. Thus far telecom regulators have
focused on facilities-based competition and open access. Open access
has been the alternative solution for the last (first) mile, but it
has had a poor record of success. If fiber is a natural, future-proof
monopoly, particularly in last mile urban and suburban areas, then
structural separation is likely to be more important than
facilities-based competition because there is no need to connect each
customer with multiple telecom lines. (The assumption here, which may
not be valid in a few years, is that fixed wireless using free space
optics or smart radios will never be as reliable, secure, and scalable
as fiber.)
St. Arnaud then described a business model for a fiber network that has
been successfully used numerous times in Canada. Municipal
governments have partnered with the private sector to build
condominium fiber networks to all public sector buildings using
right-of-way facilitated by the municipal government. The advantage
of condominium fiber is that it achieves the social goal of affordable
bandwidth to all public sector buildings, allows many competitors to
own strands of fiber into the neighborhood, and the cost of
construction is shared among all participants. In this model there is
structural separation between ownership of the fiber cable and
ownership of the individual strands, but there is facilities-based
competition between owners of individual strands.
Several next generation carriers and fiber brokers are now arranging
condominium fiber builds. Organizations such as schools, hospitals,
businesses, municipalities and universities become anchor tenants in
the fiber build. Each institution gets its own set of fibers on a
point-to-point architecture, at cost, on a 20 year IRU (Indefeasible
Right of Use). The fiber is installed and maintained by 3rd party
professional fiber contractors. Each institution is then able to
light up its own strands with whatever technology it wants. The
typical cost is $25,000 (one time for 20 years) per institution or
facility.
With municipal condominium fiber builds, multiple carriers share in the
cost of fiber build-out to neighborhood nodes serving approximately
250-500 homes. It is impractical to have multiple carriers own
individual strands from the neighborhood node to each and every home.
Therefore, the customer should have title to individual fiber from
the residence to the neighborhood node. In this type of system, which
is known as a residential passive optical network (RPON), each home is
served by a different fiber. Customers connect to the service
provider of their choice at the neighborhood node where they have the
option of deciding if they wish to connect to an aggregator,
convergence provider, or single service Internet provider.
Note: A less expensive variant of the above system is one in which 32
homes share a fiber using passive splitters. The trade-off is that
the shared bandwidth is currently limited to a total of about 1 Gbps
and each home has an upper bandwidth limit of about 31 Mbps. This is
the type of system that has been installed in Amerige Heights,
Fullerton, CA.
The Best of All Broadband -- Fiber-to-the-Home (FTTH) by Dana Bisaro
Currently there are about 200 communities engaged in feasibility
studies or deployment of FTTH. Typically schools and hospitals are
the first to build a fiber network. School students enthusiastically
adopt very high bandwidth services and applications and sell their
parents on the desirability of having very high bandwidth service at
home. Communities also adopt the technology in order to develop new
business opportunities.
It now costs about $1,200 to $1,500 per subscriber to install FTTH. It
currently costs about $3 per foot to put fiber in the street. (As an
aside I find it ironic that cable TV systems have often been valued at
$2,000 to $3,000 per subscriber.)
Cheney, WA, the site of Eastern Washington University, is an example of
the value of having a community fiber optic network. The city manager
took the initiative to build a system that would serve the citizens
and improve the city's economy. The City formed its own telecom
utility and built a high speed fiber optic network. Cheney had a
long-term contract with Bonneville Power for electricity at below
market rates. The City permitted Bonneville to gradually raise rates
to the market level in exchange for financing the community fiber
optic network. Upon completion of the network the university was
selected to be a major online data repository and IBM established a
facility for the development and testing of computer security software.
Washington state now provides seed money for communities to make
feasibility studies of developing community fiber optic networks.
Institutional Networking Over the Local Cable System by Fred Cohn
The City of Monterey, in collaboration with a number of partners from
the local research and education community, recently activated an
Institutional Network (I-Net) over fiber made available to the City as
a product of a recent Cable Franchise Renewal and system rebuild. The
I-Net provides gigabit Ethernet connectivity to qualifying
governmental, educational, and research assets. The K-12 partners
will soon interface with the Digital California Project Internet
connection at Monterey Peninsula College.
The I-Net was negotiated to be revenue-neutral to the cable operator.
Because of this, the I-Net partners were obligated to pay only the
operator's incremental cost to create the community network, given
that the operator was already going to rebuild its subscriber cable
network. As a result, the cost for I-Net fiber and electronics worked
out to be approximately $10,000 for each of the 40 sites connected to
the network with amortization being about $130/mo./site. This cost,
however, was subsequently eliminated in exchange for a liquidated
damages settlement with the cable operator.
While the network had its start in Monterey, it will eventually grow
into neighboring communities, and will hopefully eventually serve much
of Monterey County. Partners in the initiative include the Monterey
Peninsula Unified School District, California State University
Monterey Bay, Monterey Institute of International Studies, Defense
Language Institute, Naval Postgraduate School and Monterey Peninsula
College.
Four Party Ownership & Deployment of Gigabit Ethernet Over Fiber by
Alan McAdams
McAdams described a three-way and possibly four-way ownership structure
for Gigabit Ethernet over Fiber (GEF) networks. This model produces
the structural separation, which is preferred by St. Arnaud.
Ownership is separated into end-users who own their fiber, private
sector service providers who provide services to end-users, and
neutral-agent-owners of natural monopoly elements who "neutralize" the
natural monopoly inherent in networks.
The model is implemented in the following manner. 1) The end-user
through a qualified agent introduces its fiber through conduits or
other structures to a network junction. Customer premises equipment
is consistent with the bandwidth required for the services that the
customer selects. 2) Service providers connect electronically or
optically at the network junction and competitively offer services to
be chosen by the end-user. 3) A neutral-agent, fully and continuously
open to public scrutiny, owns natural monopoly elements, support
structures such as rights-of-way, poles, conduit, etc., and
"neutralizes" these natural monopoly elements. The model requires
that the support structures be provisioned in a sufficiently timely
and generous fashion to ensure free entry by new service providers and
end-users.
Since communities will have multiple junctions, service providers will
prefer to connect to a single "optimal interconnection point" for
simultaneous access to all network junctions in a given region. This
provides incentives for a fourth ownership entity to provision this
connectivity. A for-profit or not-for-profit agent can provide it as
long as the neutral support structure supplier ensures that
competition prevails when such a network is created.
Fiber Installation in Sewers, Gas Pipelines and Alternate Right-of-Ways
John Adams described how his company, Ca-Botics Fiber Systems, is
installing fiber optic cables in sewers. Tokyo, Berlin, Toronto,
Missisauga, ON, and Dublin, OH have all used this technique to build
fiber networks. Fiber can be deployed in sewer pipe with a diameter
as small as 8 inches. The cost of installation is about $160,000 per
mile which is about 50% of normal trenching costs. A video was played
to demonstrate the process. (CityNet is another company that has
contracts with U.S. cities to install fiber in sewers.)
Scott Beales, Sempre Fiber Links, a division of the Southern California
Gas Company, described a solution for running fiber to commercial
buildings using gas pipelines. Plastic conduit with up to 576 fibers
is routed through 2-inch to 12-inch gas pipelines at a cost of 30% to
50% of normal trenching costs. The conduit is deployed without
disrupting gas service. A video was shown demonstrating the process.
Pete Mahnke, Corning Cable Systems, described a microtrenching
technique that can be used to install microcable containing up to 144
fibers in right-of-ways for roadways, sidewalks, sewers and parking
lots. Microtrenching costs approximately 30% to 40% of normal
trenching. Scott showed a video to demonstrate the installation process.
Novel Wireless Approaches
Maturing technology for ever higher frequencies continues to shift the
limit of cost-competitive broadband wireless applications upwards.
These developments open the prospect of 10 Gbps Ethernet radio and
free space optic systems within the next few years. |
