# Presentation: 158480

## CANARIE “Telecom Policy Issues & Their Impact on FTTx Architectural Designs”

- _http://www.canarie.ca_
- _http://www.canet3.net_

- Bill.St.Arnaud@canarie.ca
- Tel: +1.613.785.0426

## Outline

- Context
- Competition in Telecom
- Role of Government
- One possible model for FTTn
- The Grand Challenge - FTTh
- One possible model for FTTh
- Killer apps for FTTh

## Mission: To facilitate the development of Canada’s communications infrastructure and stimulate next generation products, applications and services
Canadian equivalent to Internet 2 and NGI
private-sector led, not-for-profit consortium
consortium formed 1993
federal funding of $300m (1993-99)
total project costs estimated over $600 M
currently over 140 members; 21 Board members

- Mission: To facilitate the development of Canada’s communications infrastructure and stimulate next generation products, applications and services
- Canadian equivalent to Internet 2 and NGI
- private-sector led, not-for-profit consortium
- consortium formed 1993
- federal funding of $300m (1993-99)
- total project costs estimated over $600 M
- currently over 140 members; 21 Board members

***CANARIE Inc***

## Economic Benefits of Broadband

- See Economic Analysis:
- _http://www.criterioneconomics.com/documents/Crandall_Jackson_500_Billion_Opportunity_July_2001.pdf_
- Economic benefit of broadband to the US
-  $150 billion at 50% penetration over 15 years
-  $500 billion at 94% penetration over 25 years
-  benefits include equipment, telecom services, e-commerce, telehealth, e-learning, etc
- Accelerating roll out of broadband will accelerate economic benefits

## The Context

- Policy makers around the world are trying to promote competition in telecom
- A fundamental axiom is that competition drives innovation and lower costs
- However competitive telecom market lately seems to be going in the opposite direction
- Bankrupt CLECs, failed wireless companies
- Real danger of re-monopolization of telecom
- Regulators tend only to respond long after the horse has fled the barn
- Are there other ways of promoting competition in telecom?

## There is a clear trend in all formerly monopoly services to move to competitive services
Electrical distribution systems:  
Separation of transmission costs versus power costs from competitive suppliers
Gas distribution systems:  former regulated monopolies (unbundling is well underway)
Telecom is the last bastion of monopoly operation where services and infrastructure are provided by same company

- Electrical distribution systems:
- Separation of transmission costs versus power costs from competitive suppliers
- Gas distribution systems:  former regulated monopolies (unbundling is well underway)
- Telecom is the last bastion of monopoly operation where services and infrastructure are provided by same company

***A growing trend***

## Why government intervention? 

- Private sector competition in an open competitive level playing field is the best vehicle for producing innovation and lowering costs.
- As much as possible governments should not intrude into the marketplace.
- Sometimes government intrusion in the marketplace is warranted if there are significant benefits to the economy and society where otherwise “to do nothing would be to do harm”
- Bridges displace private sector ferry service operations
- Free trade disrupted business plans of many private sector companies
- Opening up of long distance competition disrupted business plans of incumbent telcos
- Governments have also have a critical role to balance off interests of private property owners versus social benefits delivery of enabling infrastructure such as electricity, telephone, cable, etc

## Issues

- Fiber is the ultimate end game
- Once fiber is deployed no other technology can compete for fixed telecommunication services
- One fiber strand has more capacity than combined bandwidth of all fixed wireless networks existing or planned
- Wireless is important for mobility and last 50 feet
- Value of wireless decreases with the cube of the distance
- Carriers want to go for low hanging fruit in downtown cores
- Little or no business case for single fiber in residential neighbourhoods
- Unlikely to be several fiber companies serving neighbourhoods
- So how do we provide both fiber and competition in residential neighbourhoods?

## How to introduce competition

- “Open Access”, “Structural separation” or “Facilities based competition”?
- Road ways are examples of competition through structural separation while parallel railways are examples of  facilities based competition
- To date telecom regulators have focused on “facilities based” competition and “open access”
- Facilities based competition has been very successful in the long haul
- But has been not been successful in the metro because same company is operating on both sides of the fence competing on infrastructure and services
- Mistaken belief that wireless can compete effectively with fiber
- If fiber is a natural monopoly, particularly in last mile suburban areas,  then “structural separation” maybe more important than facilities based competition

## One Possible Model 

- Municipal Condominium Fiber Network using fiber ROW and fiber facilities facilitated by municipal government
- Governments partner with private sector to build condominium fiber networks to all public sector buildings
- Government achieves social goal of affordable bandwidth to all public sector buildings
- Condominium fiber allows many competitors to own strands of fiber into the neighbourhood
- Cost of construction is shared amongst all participants
- Structural separation between ownership of fiber cable and ownership of individual strands
- But facilities based competition between owners of individual strands
- A change from the traditional telecom model where value of services is enhanced because of monopoly control of infrastructure

## Municipal  Condo Architecture

- School

- School board or
- City Hall

- School

- Telco Central Office

- Central Office
- For Wireless Company

- VDSL, HFC or FTTH
- Provisioned by service provider

- Condominium  Fiber with separate strands owned by school and by service providers

- Carrier Owned Fiber

- Cable head end

**Average Fiber Penetration to 250-500 homes**

- Colo
- Facility

- 802.11b

- Business

- Fiber Splice Box

## What is condominium fiber?

- Several next generation carriers and fiber brokers are now arranging condominium fiber builds
- IMS, QuebecTel, Videotron, Cogeco, Dixon Cable, GT Telecom, etc etc
- 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)
- One time up front cost, plus annual maintenance and right of way cost approx 5% of the capital cost
- Fiber is installed and maintained by 3rd party professional fiber contractors – usually the same contractors used by the carriers for their fiber builds
- Institution lights up their own strands with whatever technology they want – Gigabit Ethernet, ATM, PBX, etc
- New long range laser will reach 120 km
- Typical cost is $25,000 (one time for 20 years) per institution

## Benefits to Carriers

- For cablecos and telcos it help them accelerate the deployment of high speed internet services into the community
- Currently deployment of DSL and cable modem deployment is hampered by high cost of deploying fiber into the neighbourhoods
- Cable companies need fiber to every 250 homes for next generation cable modem service, but currently only have fiber on average to every 5000 homes
- Telephone companies need to get fiber to every 250 homes to support VDSL or FSAN technologies
- Wireless companies need to get fiber to every 250 homes for new high bandwidth wireless services and mobile Internet
- It will provide opportunities for small innovative service providers to offer service to public institutions as well as homes
- For e-commerce and web hosting companies it will generate new business in out sourcing and web hosting

## 2 Different Views

- Traditional Telco Network
- “Ring of Rings”
- 99.999% reliability only in the SONET
- Ideal for carriage of legacy traffic
- “Highest” common denominator technology and pricing
- Driver is bandwidth efficiency

- ISP A

- ISP B

- ISP C

- CO

- Customer Empowered Network with Condo Fiber
- “Warp and Woof”
- Separate dark fiber networks built by different competing organizations
- Customer responsible for building rings and establishing reliability
- Ideal for LAN and Internet traffic
- Driver is congestion avoidance

- SONET ring

- 3 separate dark fiber builds

- ACME Dark Fiber Inc

-  Fiber R Us  Inc

- Non Profit Fiber Inc

- ISP B

- ISP C

## Role of Municipalities

- Municipalities have a critical role to play in deployment of broadband
- They must be part of the solution and not part of the problem
- Municipal condo fiber does NOT mean that municipality builds and owns the fiber network
- If a municipality is concerned about the pace of broadband deployment it can be very pro-active under today’s regulatory environment e.g:
- By being an anchor tenant in a private sector condo fiber build
- By tendering only for condo fiber services
- By making available private city ROW to condo developers
- By leveraging MAAs (Municipal Access Agreements) to encourage condo fiber builds
- By building city owned conduit accessible to all fiber builders e.g. city of Montreak

## Montreal Public Sector Condominium Networks

**St-Laurent/Vanier**

**Lanaudière**

**Maisonneuve**

**Marie-Victorin**

**Champlain**

**Rosemont**

**Sorel-Tracy**

**Montmorency **

**Édouard-Montpetit **

**Vieux-Montréal **

**Bois-de-Boulogne **

**Ahuntsic **

**Lionel-Groulx **

**Vers Québec**

**Gérald-Godin**

**John-Abbott **

**André-Laurendeau **

**Dawson **

***Montreal Public Sector Condominium Networks***

## Condo Fiber Costs - Examples

- Des Affluents: Total cost $1,500,00 ($750,000 for schools)
- 70 schools
- 12 municipal buildings
- 204 km fiber
-  $1,500,000 total cost
- average cost per building - $18,000 per building
- Mille-Isles: Total cost $2,100,000 ($1,500,000 for schools)
- 80 schools
- 18 municipal buildings
- 223km
- $21,428 per building
- Laval: Total cost $1,800,000 ($1,000,000 for schools)
- 111 schools
- 45 municipal buildings
- 165 km
- $11,500 per building

## Alberta SUPERnet

- Guaranteed cost of bandwidth to all public sector institutions
- $500/mo for 10 Mbps, $700/mo for 100 Mbps
- Network a mix of fibre builds and existing supplier infrastructure (swap/buy/lease)
- Condominium approach: All suppliers can
- Buy (or swap) a share of the fibre (during build or after)
- Lease bandwidth at competitive rates
- Because of fibre capacity, bandwidth can be made available to businesses at urban competitive rate
- Total cost $193m
- Bell Intrigna prime contractor

***Alberta SUPERnet***

## South Dundas 

***South Dundas ***

**IROQUOIS**

**MORRISBURG**

**Notes:**
WE CHOSE TO BUILD OUR CO’S CENTRALLY AND THEY ARE ALWAYS NEAR THE BELL CO

WE OVER BUILT SUBSTANTIALLY 

WE CIRCLED THE COMM AND INDUSTRIAL AREAS

WE PLACED JUNCTION BOXES NEAR THE RESIDENTIAL AREAS 

## Fredericton Fiber Build

- Started as Economic Development tool
- MUSH, Govt., Research - ISP, carriers invited to participate
- Build partners emerged quickly, $50,000 “donated” by three firms
- Contracting now for 8 km phase 1, $110,000, complete Sept 2001
- 48 fiber min.
- Phase II – FTTH to all homes

## Slide 21

## National Broadband Task Force

- Mandate: To map out a strategy and advise the Government on best approaches to make high-speed broadband Internet services available to businesses and residents in all Canadian communities by the year 2004.
- To ensure Canada’s competitiveness in a global economy
- To create opportunities for all Canadians
- 35 members including carriers, educators, librarians, communities, equipment manufacturers, etc
- Two key recommendations:
- Condominium fiber to all communities
- Carrier neutral collocation facilities in each community
- _www.Broadband.ic.gc.ca_
- Cost $1.5B - $4B

## The  Future?The CA*net 4 architecture

- There is a growing trend for many schools, universities and businesses to control and manage their own dark fiber
- Can we extend this concept so that they can also own and manage their own wavelengths?
- Customer empowered optical networks are built on the paradigm that customer owns and controls the wavelengths (Virtual Dark Fiber)
- Customer controls the setup, tear down and routing of the wavelength between itself and other customers
- Wavelength resource management is done on on peer to peer basis rather than by central administrative organization
- Network is now an asset, rather than a service
- Will “empowering” customers to control and manage their own networks result in new applications and services similar to how the PC empowered users to develop new computing applications?

## Object Oriented Networking

- Combines concepts of Active Networks, Internet 2 e2e principles, web service architecture and Grids
- Customer owns sets of wavelengths and cross connects on an optical switch
- Similar in concept to nested VPNs with customer control of Add/Drop
- Network elements or nested VPNs can be treated as a set of “network objects” in software applications or grids
- Complete with inheritances and classes, etc
- In future researchers will purchase networks just like super computers, telescopes or other big science equipment
- Networks will be an asset – not a service
- Will be able to trade swap and sell wavelengths and optical cross connects on commodity markets

## Advantage of Web Services

- Functionality of a service is defined in WSDL as opposed to being “locked” into a standard
- Standards today are made up of 3 parts: Communication and signaling, service definition and exception handling
- Each standard does this in a unique and proprietary way e.g. UNI-C, GMPLS, ASON, etc etc
- But, WSDL and SOAP provide an open standard for signaling, communications, exception handling and service definition
- WSDL and SOAP make it easy to define new services and functionality without going through complex standards approval process
- WSDL and SOAP can be bound to traditional API calls e.g. O-UNI to provide open interface to users
- Web services will be the foundation of Grids and distributed computing
- Allows for optical networks to be just another seamless service in the grid toolbox
- With JXTA and J2EE optical networks can be managed on a peer to peer basis

## Grand Challenge -FTTH

- How to provide facilities based competition with FTTH?
- Very important to read Powell’s latest missive
- _http://www.__fcc__.__gov__/Speeches/Powell/2001/spmkp110.html_
- No single wire
- Avoid heavy regulation
- First generation FTTH models assume the old telco model where competitors can only get open access e.g.PON
- Second generation FTTH models assume structural separation between service providers and an “aggregator” using Gigabit Ethernet or ATM
- CANARIE proposes a third generation FTTH model with structural separation using condominium fiber and choice of aggregator or service provider through point to point fiber and RPON (reverse PON)....

## Gigabit Internet to the Home

- With municipal condominium fiber builds multiple carriers share in the cost of fiber build out to neighbourhood nodes serving approximately 250-500 homes
- It is impractical to have multiple carriers own individual strands from the neighbourhood node to each and every home:
**Therefore let the customer have title to individual fiber from the residence to the neighborhood node**
**The customer connects to the service provider of their choice at the neighborhood node**
**Customer decides if they wish to connect to an aggregator, convergence provider, or single service Internet provider**
- Two approaches:
- RPON which allows easy moves, adds and changes
- Micro conduit and fiber is blown in upon customer request from designated service provider

## Gigabit to the Home

**ISP B**

**ISP C**

**Splice Box**

** ****Condominium Fiber Trunk**

**Up to 15 km**

**Customer owns fiber strand or micro conduit all the way to**
**Neighborhood Node Colo**

**X**

**X**

- 864 strands

**ISP D**

**ISP E**

**Colo Facility with RPON**

**Colo Facility**

**Business with dual connections**

## RPON

## Three types of traffic

- Human to Human
- real time voice and video, tele-medicine, tele-immersive VR, etc
- QoS required - very sensitive to jitter and delay
- very symmetric & growing linearly
- Human to Computer
- web, voice mail, video servers, call centers, fax - mostly TCP
- Some QoS - jitter and delay can be compensated with client buffering
- bursty & very asymmetric & growing exponentially
- Computer to Computer (usually many to many)
- E-mail, Napster, Morpheus, IP appliances, application servers
- No QoS required - insensitive to jitter and delay
- extremely bursty & growing exponentially plus

## History of the Telephone

- Recommended Reading – America Calling: Social History of the Telephone
- Claude S Fischer ISBN 0-520-08647-3
- When telephone was first introduced it was promoted as a device for:
- Home shopping – order goods over the phone
- Tele-medicine – consult with a doctor
- Tele-church – hear church services over the phone
- Sound familiar?
- The concept that there would be a market to use the telephone just for talking or chatting was inconceivable
- But that turned out to be the biggest market
- The Internet was designed on a set of protocols to allow computers to talk
- There will be multimedia applications
- But the biggest application might be computers chatting and talking

## Computers will drive FTTH

- Computer central processor does not shut down 8 hours a night
- Computers can talk all day and all night, 365 days a year.
- You don’t need 2 computers to create another computer
- Computers are very tolerant of network congestion, packet loss, outages, etc
- Computers can consume all the offered bandwidth – the only limitation is CPU power
- CPU power is increasing with Moore’s Law
- Bandwidth for computers is determined by it burst capacity – not its average capacity
- This why you need Gigabit to the home – for the burst capacity
- Same reason why you have 10/100 Mbps to the desktop in the office

## We already have Petabit Networks

- FedX is already a Petabit network
- thousands of disks and tapes shipped daily
- jitter and latency is pretty poor
- cost for shipping tape approx .000001 cents/byte
- Current cost of sending data over fiber .001cents/byte
- With an optical Internet data will cost .00001 cents/byte
- By 2001 telecommunication cost will be close to FedX cost
- If 10% of this traffic moves to the Internet, the Internet will be bigger than all voice networks combined
- This is all computer to computer traffic – ideal for the Internet
- Most university traffic still moves by tape

## Killer App for FTTH

- Regulators and governments insisting on facilities based competition to the home
- Fiber has the only potential to do this
- Fiber also has potential to significantly reduce cost of telecom
- Biggest concern to citizens is not bandwidth:
- It is potholes, spaghetti trees, street furniture and antenna rage
- Biggest app for DSL and Broadband: Morpheus + Tivo
- Self organizing servers, etc
- But got to solve copyright issues