One of the significant challenges facing network operators today is the high capital cost of deploying next generation broadband network to individual homes or schools. Fiber to the home only makes economic sense for a relatively small percentage of homes or schools. One solution is a novel new approach under development in several jurisdictions around the world is to bundle the cost of next generation broadband Internet with the deployment of solar panels on the owners roof or through the sale of renewable energy to the homeowner. Rather than charging customers directly for the costs of deployment of the high speed broadband network theses costs instead are amortized over several years as a small discount on the customer’s Feed in Tariff (FIT) or renewable energy bill. There are many companies such as Solar City that will fund the entire capital cost of deploying solar panels on the roofs of homes or schools, who in turn make their money from the long term sale of the power from the panels to the electrical grid. In addition there are no Energy Service Companies (ESCOs) and Green Bond Funds that will underwrite the cost of larger installations.
Tuesday, December 23, 2008
As governments talk about economic stimulus, what this paper demonstrates is that the biggest bang for the buck will probably be in broadband deployment. While digging sewers and building bridges is important, the leveraging of such investments in terms of creating new economic opportunities is nowhere close to that of broadband deployment.
But its also important that we make the right investment in broadband. It cannot and should not reinforce existing duopolies. It must enable a competitive environment and a level playing field. That is how we will maximize innovation and economic leverage.
Brough Turner gives several good example of this type of investment through customer owned networks in a recent talk he gave at Emerging Communications Conference
Slides at: http://www.slideshare.net/eComm2008/brough-turners-presentation-at-ecomm-2008
Audio at: : http://itc.conversationsnetwork.org/shows/detail3719.html
Also FreePress, a national, nonpartisan organization working to reform the media, argues for the same solution for the US through a $5 billion investment to “. An innovative idea that has been successful abroad, this proposal is designed to deploy world class fiber-optic networks which are shared by multiple competitors. This program would award higher levels of investment tax credits and accelerated depreciation to entities that deploy more than a single strand of fiber to an end user for the purpose of selling the fiber to a competitive provider. In addition, the program would allow all taxes on sales of the additional fiber to qualifying third parties to be completely deferred for five years. This approach would spur competition in the broadband market, encouraging demand and innovation
The $15 billion broadband bonus
Thursday, December 18, 2008
Full competition in telephony requires the solution of numerous problems, some of which appear truly intractable. This paper deals with three of the most serious difficulties that competition in telephony must overcome: interconnection among local exchange service providers, interconnection between local exchange and interexchange service providers, and the transition from monopoly to competition. This paper shows that customer ownership of the local loop provides an elegant, uniform solution to these problems; it causes each of these problems to virtually disappear. The paper also discusses the likelihood that customer ownership of the local loop will create a competitive loop construction industry. This does not directly solve an obvious problem with competition in telephony, but it is clearly desirable, because it permits loop construction to be demand driven rather than supply driven. The paper concludes with an explanation that customer ownership of the local loop does more than solve several individual problems with competition in the provision of telephony. Rather, it constitutes an elegant, integrated solution to many of the problems with competition in telephony.
For more information also see:
Google policy paper
Home with tails – what if you could own your Internet connection
Tuesday, December 16, 2008
Swisscom touts "fibre suisse" project
Over the next six years, Swisscom is planning to invest some CHF 8 billion in the Swiss telecommunications and IT infrastructure, with 35% of this sum earmarked for fibre-optic expansion.
To enable potential cooperation partners to expand their own fibre-optic infrastructure after the construction work has started, Swisscom will be laying several fibres per household in all areas. One fibre will be used by Swisscom, while the others will be made available to the cooperation partners. The multi-fibre model will prevent the creation of a new network monopoly in Switzerland and also meet competitors' requirements for full access to the local loop.
At the end of July, Swisscom invited potential cooperation partners from the telecommunications, cable, and utilities industries to work with it on building the fibre-optic network, with the aim of implementing the network more quickly and cost-effectively in conjunction with several partners. Moreover, this collaboration will generate competition among different types of networks, boosting investment and innovation and maximising the benefits for customers and home owners, says the carrier.
While laying several fibres per household entails marginally higher investments, it guarantees competition at the technology and service levels. Limiting fibres to one per household would be impractical, says the carrier, since it would endanger the dynamic nature of the market and the technological innovativeness of the telecommunications industry over the next 30 to 50 years.
Find more FTTx news at /Lightwave/'s FTTx Resource Center
Thursday, November 13, 2008
Homes With Tails
What If You Could Own Your Internet Connection?
Friday, November 21, 2008
12:15 p.m. - 1:45 p.m.
New America Foundation
1630 Connecticut Ave NW, 7th Floor
Washington, DC 20009
America's path to becoming a broadband leader is uncertain. Few dispute that deploying fast, universal, and affordable broadband is imperative, but the costs of robust network infrastructure are daunting for the private sector and governments.
In a forthcoming New America Foundation working paper, authors Tim Wu and Derek Slater propose an innovative way to drive broadband deployment: a model that encourages consumers to purchase and own the "last-mile" connection that runs into their home. By purchasing their own fiber optic connections, consumers would be able to connect to a variety of service providers. This model holds the potential for higher broadband speeds, greater competition, and lower Internet service prices.
The idea of customer-owned fiber may seem odd at first, but buying items like personal computers, answering machines or even telephones was also unheard of only a few decades ago. Home fiber could someday become a must-have technology.
Join the authors for a presentation and discussion of this new proposal, and learn more about "Homes With Tails."
Professor of Law, Columbia Law School
Fellow, New America Foundation
Co-Author, Homes with Tails
Policy Analyst, Google Inc.
Co-Author, Homes with Tails
Research Director, Wireless Future Program, New America Foundation
Director, Wireless Future Program, New America Foundation
To RSVP for this event, click on the red button or go to the event page: http://www.newamerica.net/events/2008/homes_tails
For questions, contact Cecille Isidro at (202) 986-2700 x 141 or firstname.lastname@example.org
Tuesday, September 2, 2008
The business model — or ground-floor opportunity, as Mr. Montie put it — is not unlike Amway, Nu Skin and other multilevel marketing businesses: Average Joes and Janes sell friends a product or service (who, in turn, sell friends a product or service) with each seller getting a slice of the recruit’s spending in return. Only instead of pushing soapsuds or vitamins, Ambit evangelists sell gas and electricity.
The approach is a novel and perhaps inevitable byproduct of utility deregulation that began a decade ago, with broken-up monopolies now facing competition from alternative energy service companies, known as ESCOs. Hundreds of ESCOs have sprung up — and some have folded up — in recent years, promising to supply gas and electricity cheaper than giants like Con Edison, which still delivers the power. In New York City and Westchester County, ESCOs have nearly 600,000 customers (Ambit officials refused to say how many customers it has locally or nationally).
Direct Energy Services, IDT Energy and many other ESCOs — eager to capitalize on fears over high fuel prices — use mass mailings, Web sites and door-to-door salespeople to recruit customers from Con Ed by promising they will save 7 percent on their supply cost for the first two months, and avoid taxes on the delivery of that supply. Direct Energy reckons that customers in a typical New York City apartment can shave about $6.50 off their monthly electric bill.
Companies offer perks, too. Energy Plus gives customers bonus miles on various airlines for every dollar they spend on electricity.
Ambit, which was founded in Texas in 2006 and came to New York in June 2007, is one of a handful of ESCOs experimenting with the network-marketing model, betting that people are more likely to buy electricity from someone they know than from a stranger at their door (and that sales agents who earn residuals from those they enlist will be more motivated than those who work for a salary or straight commission).
Mr. Chambless declined to discuss Ambit’s finances because it is privately held. But he said he and the company’s chief executive, Jere W. Thompson Jr., had a lot of experience in deregulated markets. Mr. Chambless added that Shell Energy Trading, a subsidiary of Royal Dutch Shell, had also agreed to sell energy to Ambit, a major endorsement of the company’s prospects.
Monday, August 25, 2008
Last week I had the great fortune to learn about a potentially revolutionary new model for deploying fiber from Bill St. Arnaud, senior director for advanced networks at CANARIE and long-time industry visionary.
Home for various broadband applications serving communities around the
world. Thanks to Matt Wenger for this pointer-BSA]
>From the PC world article:
Prior to the arrival of European settlers, the indigenous Ktunaxa
thriving culture going back 10,000 years. Following more than a century of
abuse and mistreatment at the hands of the Canadian government, however, the
Ktunaxa's language and culture have been all but eradicated.
Now, innovative uses of cutting-edge broadband and digital recordings of
tribal elders are enabling younger members to hear the sounds of the
language, giving Ktunaxa leaders hope for its future.
"With no prospect of the infrastructure in our traditional territory
improving, we took it upon ourselves to develop our own
make use of these important language-training resources," says Maki.
In March of 2007, the mission was accomplished. The Ktunaxa Nation now has
North America's only native-owned open-fiber-to-the-home network, providing
speeds of 100 megabits per second to each home.
"We're now wired like no other community in North America. Everything we do
is based on connectivity. Not many people get a chance to change the course
of predicted history, but with hard work and fiber, we will," Maki says.
Matt Wenger writes:
Interesting four part series of articles in PC World highlighting
"groundbreaking broadband uses, and the people who employ the technology to
preserve the past, reshape the future, and fulfill their dreams." To quote
Of particular interest to many of you will be part 2, the feature on the
Ktunaxa nation fiber network in Canada.
In terms of the other three articles:
The first article on gaming as Olympic sport this year can be found:
Part 3: "The Film Editor's Dream" A well-known Swedish film editor fulfills
his dream of working remotely while living in a rural area, thanks to a
superfast fiber-optic broadband connection.
Part 4: "The Doctor Isn't In But Can See You" In the final installment,
focuses on how NorthWest Telehealth is delivering quality healthcare
What I like, is the emphasis on what is ACTUALLY being done rather than what
could maybe one day happen. There may be good contacts here for many of you
to follow up with to learn more about what they did and how they did it.
Monday, August 18, 2008
Home run fiber provides a lot more flexibility and opportunity to deploy new business models than PON. PON is a technology that insures the carrier stays in charge of the network and has limited scalability.
A good summary of the business case challenges of FTTH regardless of whether you are a municipality or a telco
In 2003, when an 18-city consortium began organizing UTOPIA's build-out, the $400 million network was glowingly seen as serving nearly 249,000 residences and 34,580 businesses. Eventually, the projections were cut roughly in half. Eleven cities in Utah, including Orem, Lindon and Payson, committed to the bonds, pledging $202 million in sales tax revenues over 20 years to pay them back.
Now, unexpectedly low subscriber counts and revenue shortfalls are threatening UTOPIA's ability to continue to make its bond payments. Tax revenues haven't been tapped yet, but if UTOPIA fails, the 11 cities could be on the hook for up to the full $202 million, the Utah Taxpayers Association warns.
To avoid that, UTOPIA wants to refinance. It is asking the cities this week to increase their sales tax pledges and extend their guarantees to 33 years.
The question facing city councils this week is whether UTOPIA's track record gives them enough confidence of future success to commit taxpayers for three decades.
UTOPIA had projected it would bring fiber connections to as many as 70,000 households and businesses in its six member cities, and achieve a subscription rate of around 40 percent by 2008. To date, it has passed fiber connections to about 42,000 households and businesses, with only about 7,200 paying customers. On top of weak customer response, the network's construction costs are above what it had projected.
In iProvo's case, Provo officials had projected that 75 percent of customers would sign up for its top-end "triple-play" -- meaning TV, telephone and Internet services in a single package. They also expected the network, which was built on $39.5 million in sales-tax revenue bonds, to break even when it reached 10,000 subscribers.
Instead, the iProvo triple-play take rate was closer to 17 percent, not 75. And while the network passed the 10,000 subscriber mark late last year, city officials now say they may need as many as 15,000 subscribers to break even because of revenue shortfalls.
Now the city's fiber-optic network is $10 million in the hole, and critics are calling for the struggling venture to be sold......
Wednesday, July 23, 2008
Monday, July 21, 2008
Customer Owned Networks reduce health care IT costs
Another article on customer owned networks and reducing health care costs
Customer Owned Networks for Government
Customer Owned Networks for Hospitals inConnecticut
Buffalo hospitals get connected with customer owned fiber
Museum of Natural History gets connected with customer owned fiber
More companies offering customer owned fiber
Palo Alto Ftth
Burlington Ftth case study
Barcelona @22 project
Customer Owned (Empowered) Fiber Workshop
Customer Owned Fiber Workshop for Universities
Customer Owned Networks for schools, universities business
Larry Lessig article on customer owned networks
Sarbanes-Oxley driving demand for customer owned networks
More enterprises tap customer owned fiber
More companies specializing in sale of customer owned fiber
Pembina Schools Customer Owned fiber
Innovative fiber networks in New Zealand
FiberCo – customer owned networks for universities
Breaking the enterprise bottleneck with customer owned fiber
Case studies of how customer owned fiber helps business
Customer owned fiber – businesses see the light
First workshop on customer owned networks
How customer owned networks is hurting telco revenue
New York Presbyterian Hospital deploys customer owned network
Carrier Neutral Exchange Points and Customer Owned fiber
Customer Owned fiber market to grow 15% in Europe
Customer owned fiber network for 6000 homes in Toronto
Quebec government to promote customer owned fiber networks
Czech republic deploys 3000km customer owned fiber
Customer Owned Networks in Australia
US Gov’t labs acquire customer owned fiber
More cities deploy optical fiber networks
Tutorials on Customer Owned Networks at SuperComputing
Universities in 1o states are acquiring customer owned fiber
Black & Veatch
Internetworking Atlantic Inc
Thursday, May 22, 2008
All the presentations of the OECD workshop on FTTH are now available: http://www.oecd.org/document/56/0,3343,en_2649_34225_40460600_1_1_1_1,00.html
Of particular note is the presentation by Herman Wagter of CityNet of Amsterdam which convincingly demonstrates how separating ownership of fiber from companies who deliver services allows for true facilities based competition where competitors can use different layer 0 technologies for delivering services http://www.oecd.org/dataoecd/36/28/40460647.pdf
Benoit Felten also maintains an excellent blog on the various presentations that were given at the OECD workshop: http://www.fiberevolution.com
Hendrik Rood of Stratix Consulting has just released a very interesting report on FTTH developments in The Netherlands who have one of the highest penetration of FTTH in the world. At the end of the 1st quarter in 2008 the Netherlands had 176 thousand FTTH connections.
Direct link to the Stratix paper:
Of particular note the paper goes into considerable detail explaining the arrival of Institutional investors (Pension funds etc.) with a real estate approach in funding open network infrastructure and the recognition by the incumbent operator KPN that this model may suit their business needs as well.
"Market entry by infrastructure facility providers with a Real Estate approach like independent Tower companies for mobile service providers and neutral data centre and telehouse facility owners, the development of FTTH in the Netherlands have shown the arrival of a new kind of market entrant: Real Estate financers investing in local loop networks.
The entry of real estate finance may act as a harbinger of a novel market structure with non-incumbents owning those infrastructure facilities with real estate characteristics. Their market arrival could have lasting consequences for regulatory policy of communications infrastructure.
As the Dutch market is now genuinely warming up to Fiber-to-the-Home, while the new open business models with real estate oriented investors are established, Stratix Consulting expects a new development stage with a run-for-the-market, where the market consists of local FTTH projects. Such a stage has happened before in the 1881-1900 period with telephony roll out and the 1960-1980 period of CATV network deployment.
Local loop economics indicates only one network per area to be feasible, in particular under the open network business models. With financiers stepping in and supply constraints visible in construction, we expect mounting citizenry pressure on municipalities and provinces to lure the projects to their area first, aiding constructors by facilitating community drives.
New ITIF Report: “Explaining International Broadband Leadership”
The executive summary does not do this report justice. There are dozens of hidden gems within the report. I recommend reading the report in its entirety. I was very pleased to see from the report's regression analysis that price has the strongest correlation with broadband penetration. This is something that I have been claiming, based on a paper written for Scientific American way back in 1993!! This paper demonstrated, for a variety of telecommunication technologies – telephone, cable, PC – price was the single biggest determining factor for adoption rates. Most people are surprised that the telephone took over 75 years to reach 50% penetration. But if you measure the price of telephony in terms of per average per capita income, you discover historically it has been a very expensive technology. And what drives price ?----competition!
"In a new report examining in depth broadband policies in 9 nations the Information Technology and Innovation Foundation concludes that while we shouldn’t look to other nations for silver bullets or assume that practices in one nation will automatically work in another, U.S. policymakers can and should look to broadband best practices in other nations. Learning the right lessons and emulating the right policies here will enable the United States to improve our broadband performance faster than in the absence of proactive policies. The report analyzes the extent to which policy and non-policy factors drive broadband performance, and how broadband policies related to national leadership, incentives, competition, rural access, and consumer demand affect national broadband performance. Based on these findings the report makes a number of recommendations to boost U.S. broadband performance.
Also included in the report are the updated 2008 ITIF Broadband Rankings, a composite measure of broadband penetration, speed and price among OECD countries. When these factors are considered together, the United States ranks 15th out of 30 OECD nations in broadband performance.
The executive summary can be accessed at http://www.itif.org/files/2008BBExecutiveSummary.pdf.
The full report can be accessed at http://www.itif.org/files/ExplainingBBLeadership.pdf."
Broadband Enables Wyoming To Teach English to South Korea
I read a tremendous article found in Jim Baller's [http://www.casperstartribune.com/articles/2008/05/09/news/breaking/doc4824787da7b01237580282.txt] regular email newsletter earlier this week that highlights a number of interesting and important points.
It details an initiative where 150 teachers are going to be finding employment in Wyoming teaching South Koreans how to speak English.
Firstly, it's a tremendous example of the use of broadband as the teaching is conducted via videoconferencing.
Secondly, they specifically mention that what makes this possible is the fact that Powell, Wyoming, where the teachers will be located, is deploying a full fiber network with the capacity to enable high quality videoconferencing.
Thirdly, it's another example of how broadband enables the creation of new jobs that allow people to work from home.
Fourthly, it shows how there are businesses to be made catering to educational pursuits and not just entertainment related endeavors.
Fifthly, it shows how far ahead South Korea is in their use of broadband to enable better education.
Lastly, and unfortunately not necessarily a positive, it highlights the fact that South Koreans are aggressively pursuing applications that can not only be a good business but also benefit society as the money behind this comes not from the US but a South Korean venture capitalist.
Whew, that's a lot of points hit in an article that's not much longer than this post, but there's simply no denying how many relevant points it touches upon.
But what I think I like about it most is that even though it's being funded and driven by South Koreans, it's still creating new jobs here in the US. It's jobs like these that will help us reverse the trend of outsourcing so that other countries can come to rely on the expertise, know how, and hard work of the American people.
And it's important to never forget that this is all possible only through the power of broadband.
Tuesday, April 8, 2008
DEVELOPMENTS IN FIBRE TECHNOLOGIES AND INVESTMENT http://www.olis.oecd.org/olis/2007doc.nsf/LinkTo/NT00005E06/$FILE/JT03243516.PDF
PUBLIC RIGHTS OF WAY FOR FIBRE DEPLOYMENT TO THE HOME http://www.oecd.org/dataoecd/49/9/40390753.pdf
The OECD has published a paper titled "DEVELOPMENTS IN FIBRE TECHNOLOGIES AND INVESTMENT". Technically it's an OECD paper and it represents what the OECD finds important, but I spent two months in Paris (dec 2006-jan2007) writing it, so emotionally it's my paper. It was really great that my previous employer assigned me to the OECD for that period. The people at the Directorate for Science, Technology and Industry - Information and Communications Policy are great people and I had great fun working with them. These are the same people who make the infamous OECD Broadband Statistics, which are every time cause for discussion in the countries that are ranked low.
The paper examines developments in broadband technology, going from submarine, wireless, to hybrid (BPL, xDSL and Docsis) and all-fibre networks like (xPON and Point to Point). (Submarine is included because it both shows where the technology will go and the difficulties businesses may face) It describes the relative differences and the effects this has on the way these networks can be used. In one of the figures it shows the difference between the bandwidth on a dedicated link (like VDSL) and a shared link (wimax or Docsis) available to one user and to twenty simultaneous users. The paper is already a year old, so LTE isn't included. Service-wise it works from the idea that users need at least 50Mbit/s downstream capacity in order to be able to freely choose services from a variety of service providers and to be able to run several services parallel.
It also discusses the business case there are for investment in fibre networks and the different positions between incumbents and new entrants. Furthermore there is an evaluation of the possibilities for alternative financing models. It also shows a financial model based on a model for the Dutch Ministry of Economic Affairs. This model developed by Arcadis in the Netherlands is based on real investments in The Netherlands and therefore is quite accurate. When applying it to other countries your mileage may vary. What it does show is that housing density matters as well as penetration. What is also clear is that there is not much room for multiple providers of physical infrastructure in the same region.
The last part goes into the roll of the government as a stimulator, regulator and investor. Some of the things it argues is that first governments should have an idea of what they want to achieve. Second it argues should take away any barriers to entry, but also must be aware that if they stimulate one party that this interferes with competition for others. So if governments stimulate the roll out of a network, they should demand that the network that they have stimulated becomes open to others under equal conditions.
With regards to regulation an important insight is that regulators should provide regulatory certainty with regards to the success of networks, not with regards to the competitive services offered over that network. Also policies should aim at the local exchange of traffic between networks, thereby relieving backhaul networks of unnescessary traffic.
As an investor governments should be cautious and determine the amount of market failure. If they do invest it should be limited starting with i and then if more is necessary moving up to iv.
i) Digging trenches and laying ducts, removing a significant part of the costs of rolling out a network.
ii) Providing passive network infrastructure to which network providers can connect their active infrastructure.
iii) Providing an active network over which others can provide their services.
iv) Providing services over the network to end-users.
All in all it was great fun writing this piece. Another paper was also published called: PUBLIC RIGHTS OF WAY FOR FIBRE DEPLOYMENT TO THE HOME There is a conference in Stavanger next week that will delve much deeper into this topic. I will be speaking there too.
Thursday, April 3, 2008
[Thanks to Benoit Felten and his excellent blog FiberRevolution for this pointer -- BSA]
This is going to be an exceptional event in more ways than one. First of all, it's organised in Norway where dozens of municipal projects have sprouted all over the country. It's also happening in Stavanger, the hometown of landmark project Lyse Tele. And the speaker roster is to die for, with people from Stokab, AT&T, Amsterdam Citynet, Telefonica, France Telecom, OFCOM, ARCEP, the Japanese Ministry of Information and Communication, and many more. Check out the full program and registration details.
The aim of the Workshop is to examine fibre investment across the OECD and look for best practices across a range of investment scenarios. After 100 years, the telecommunications industry is moving away from copper to fibre-based local loop networks. Fibre networks offer higher capacities than other telecommunications transport technologies and capacity is easy to expand once the fibre is in place simply by changing electronic components at both ends. Although there is general agreement that fibre local loop networks are important there is less agreement on the best architecture for these networks. Fibre investment choices concerning large metropolitan areas will be very different than those facing operators in rural and remote areas. Therefore, the workshop will also devote attention to investment in large, medium and small communities separately. In addition, the workshop will examine a number of technological and topological options such as FTTH/FTTN and Point-to-point/PON. Finally, the workshop will look at how regulations concerning fibre are evolving in OECD countries and how to ensure that these networks help promote effective competition.
Monday, March 24, 2008
Unlimited calling plans put Cellphone towers firms in Sweet spot [Globe and Mail Feb 28, 2008- B18. Bizarrely, in this day and age no web pointer]
FTTH is a hot topic already and it is only a matter of time before investors start realizing the true potential by launching special products or investment funds. ...The Swedish Ventura Team recently reported on usage, which provided some reassurance to anybody displaying scepticism over what to do with all that bandwidth.
Their main findings:
* Nielsen's Law (available speed increases at a 50% CAGR) generally holds. The Ventura Team expects it to hold for at least another decade. This means that 100 Mb/s will be available in France in 2008, in Poland in 2012 and in the UK in 2015.
* The mass market lags the high-end user by 2-3 years.
* FTTH customers generate >3x more traffic. Surprisingly, the inbound/outbound traffic ratio seems to be similar to the one for ADSL networks (notwithstanding an expected P2P concentration on FTTH networks).
Pendulum swings away from controversial fibre technology
Proponents of GPON fibre-to-the-home (FTTH) technology were dealt a number of blows at last month's FTTH Council Europe conference in Paris. The European Commission, independent experts and even some incumbents used the FTTH-equipment manufacturers'annual event to voice concerns – and criticism– about the controversial approach to building next-generation access networks. [...] "Once you have a PON network, really how to unbundle this network is still very unclear,"
Next Generation FFTH architectures - home run fiber
European telecom regulators have expressed an intense interest in the future architecture of FTTH (fiber to the home) networks. They’re concerned that choosing the wrong architecture will make future unbundling difficult and make it impossible to create a competitive broadband market. The most flexible alternative is a “home-run” fiber architecture, which will allow for true unbundling and create a level playing field in the market.
The telcos and their equipment suppliers are almost universally pushing for the emerging GPON technology, while many municipal networks and innovative startups, such as PacketFront, are pushing for Ethernet point-to-point. A pox on both their houses, I say.
The telcos love GPON (Gigabit Passive Optical Network) because it keeps them in control of the network. Although there is some talk of “virtual” separation with wavelengths and so forth, it still leaves one carrier in charge of the network. The other challenge with GPON is that, once it is deployed, customers are locked into this type of architecture for the next 20 years, with certain assumptions on traffic flows and ratios based on today’s understanding of networks.
If there is one thing we have learned over the past decade, future network demand will likely exceed our most optimistic projections. Ethernet point-to-point is a bit more future-proof, but its main drawback is the deployment of active equipment in the field. This equipment will need power and ongoing servicing.
But there is good news. Regulators don’t have to choose between these two unappealing approaches for FTTH. They could decide on“home-run” fiber architecture
Monday, February 25, 2008
The challenge with broadband in North America is lack of facilities based competition. What we need to find out is why the big telcos and cablecos are not deploying infrastructure in their competitor's territory? They seem to have no problem deploying nation wide wireless networks, but nobody wants to make the make investment in nation wide broadband in direct competition with existing incumbents. What are the hurdles? Is broadband a natural monopoly? Do we need to encourage alternate business models, through regulation, tax incentives or other means? More distressing - why aren’t consumers complaining? Why is it that the nation that exemplifies free enterprise and entrepreneurialism, the nation that created Google, Yahoo, Apple Microsoft and host of other world beating companies, cannot find a truly competitive business model that will enable the build out of a national broadband network for the world's richest nation? --BSA]
The United States is facing a crisis in broadband connectivity. The demand for bandwidth is accelerating well beyond the capacity of our current broadband networks, especially as video traffic and home‐based businesses become more prevalent. In the very near future, a single family will be watching HDTV video at the same that they engage in remote health monitoring, videoconferencing, gaming, distance education class lectures, and social networking. Moore’s Law, as well as several studies of future Internet growth, predicts that homes and businesses will need a minimum of 100 megabits per second (Mbps) of capacity within the next three to five years and will need even greater capacity going forward.
While other nations are preparing for the future, the United States is not. Most developed nations are deploying “big broadband” networks (100 Mbps) that provide faster connections at cheaper prices than those available in the United States. Japan has already announced a national commitment to build fiber networks to every home and business, and countries that have smaller economies and more rural territory than the United States (e.g., Finland, Sweden, and Canada) have better broadband services available.
Why is the United States so far behind? The failure of the United States to keep pace is the direct result of our failure to adopt a national broadband policy. The United States has taken a deregulatory approach under the assumption that the market will build enough capacity to meet the demand. While these steps may have had some positive influence, they are not sufficient. The profit/loss statements of individual firms fail to take into account the positive externalities from a widely deployed broadband network, including economic growth, lower‐cost health care, and higher‐quality education. In contrast, most other nations treat broadband services as necessary infrastructure; their governments adopted explicit broadband stimulus plans at the turn of the century, and their countries are now reaping the benefits.
The United States needs to take aggressive action to significantly expand our broadband connectivity. Now is not the time for incremental improvements; we are behind, and we must adopt a comprehensive strategy this year if we are to address the growing needs of our citizens and our economy. U.S. policy must be forward‐looking—we must “skate where the puck is going to be.” For these reasons, this paper proposes the creation of a new federal Universal Broadband Fund (UBF)that, together with matching funds from the states and the private and/or public sector, should be used to build open, big broadband networks of at least 100 Mbps (scalable upwards to 1 Gbps) to every home and business by 2012. U.S. state governors and foreign heads of state have found the resources to subsidize broadband deployment; the U.S. federal government should as well.
Building a local fiber connection past each home and business will cost approximately $100 billion. The paper recommends the public‐private partnership approach followed in Canada, where one‐third of the funding would be provided by the federal government, one‐third by the states, and the remaining one‐ third by the private and/or public sector. It thus proposes a federal fund of $8 billion per year for four years, to be distributed to the states once they provide their matching amount of funding. Each state would then combine the federal and state funding and award grants to individual entities (public or private) that provide the remaining one‐third of the funding to build open, big broadband capacity on a community‐by‐community basis.
While the initial investment is significant, the returns would be enormous. First, a big broadband network would be less expensive to operate than the existing copper network, resulting in actual cost savings of several billion dollars per year. More important, the availability of broadband capability would generate enormous economic activity (both from building the network and from its use) that would lead to greater tax revenue and economic growth. Furthermore, fiber networks are scalable upwards to an almost unlimited capacity; the investment in building these networks may provide adequate broadband connectivity for several decades. Finally, once the networks are built, the need for additional funding would end, and the private and/or public entity that receives the funding would own and operate the network without the need for ongoing federal subsidies.
A critically important component of this grant program is that the networks built with UBF funding must be open and accessible to all users and content and application providers. The taxpayer is entitled to certain rights in return for providing two‐thirds of the funding to build these networks. Thus, the entity chosen to build the network in each community would maintain both an open network for all lawful uses and affordable pricing, and may be required to make a portion of its capacity available on a wholesale basis to competing retail service providers.
While federal funding and openness are fundamental, other components of a comprehensive broadband plan are equally vital. The plan must include the coordinated effort of our elected leaders and must be implemented by a core of federal, state, and local officials, with guidance from an advisory committee of commercial and nonprofit institutions. The plan should include tax incentives to spur private sector broadband investment and should encourage public sector investment by municipalities and states as well. Efforts should also be undertaken to ensure that the public is made aware of the availability of these broadband services. Funding should also be provided to bolster U.S. investment in long‐term telecommunications research. The U.S. broadband crisis is a unique challenge. Unlike past threats to our future competitiveness, the solution to our broadband connectivity crisis is primarily local. The benefits of broadband connectivity are felt directly by every consumer and business, and final decisions must involve our local leaders under a comprehensive federal program. The United States needs to move beyond the rhetoric and begin to adopt a specific action plan for the future. EDUCAUSE looks forward to comment on this proposal and seeks to join with others in improving our national broadband connectivity.