Liberalisation and regulation in the electronic communications sector: Theory and empirical evidence Week 3 zTechnical aspects of Electronic Communications Networks zBusiness models in network provision

3 June Technical aspects of Electronic Communications Networks z Core – Backbone Network y Fixed (Fiber, PDH/SDH, PoS, GigaBit Ethernet, WDM, DWDM) y Wireless z Access Network y Fixed wired (Fiber to the Curb/Home, Cable, Coax, Copper - xDSL) y Wireless (802.11, , LMDS) y Mobile (GSM, UMTS, ) y Satellite communications (DVB/RCS, VSAT) z Interconnection y Interconnection y Unbundling

3 June Backbone - Core Networks

3 June Backbone - Core Networks (cont'd)

3 June Access Networks

3 June Access Networks (cont'd)

3 June Electronic Communications Networks Single Operator

3 June Electronic Communications Networks Competition

3 June Interconnection zPhysical and logical connection of telecommunications networks. zUsers connected to different telecommunications networks communicate directly or indirectly.

3 June Interconnection - PSTN Operator A Operator B A Subscriber B Subscriber Switch Trunk Group Point of Interconnect (POI)

3 June Interconnection - NGN Originating Carrier ISP B Users Point of Presence (POP) Users Terminating Carrier ISP B Web Sites

3 June Interconnection - NGN Originating Carrier ISP B Users Terminating Carrier ISP B Web Sites Backbone Carrier

3 June Business models in network provision zTraditional TELCO offerings (ATM – PDH/SDH) zNew TELCO Broadband offerings (Gigabit Ethernet/Packet over SDH, λ-DWDM) zalternate models (dark fiber, condominium arrangements)

3 June Customer Empowered Networks z School boards and municipalities are building condominium dark fiber networks in partnership with next generation carrier z Individual institutions – the customers – own and control their own strands of fiber y Fiber are configured in point to point private networks; or y Connect to local ISP or carrier hotel y Private sector maintains the fiber z Low cost LAN architectures and optics are used to light the fiber z These new concepts in customer empowered networking are starting in the same place as the Internet started – the university and research community. z Customers will start with dark fiber but will eventually extend further outwards with customer control and ownership of wavelengths y Extending the Internet model of autonomous peering networks to the telecom world

3 June Market Drivers  First - low cost  Up to 1000% reduction over current telecom prices month payback  Second - LAN invades the WAN – no complex SDH/SONET or ATM in network  Network Restoral & Protection can be done by customer using a variety of techniques such as wireless backup, or relocating servers to a multi-homed site, etc  Third - Enables new applications and services not possible with traditional telecom service providers  Relocation of servers and extending LAN to central site  Outsourcing LAN and web servers to a 3 rd party with no performance impact  IP telephony in the wide area (skype)  HDTV video  Fourth – Allows access to new competitive low cost telecom and IT companies at carrier neutral “meet me” points  Much easier to outsource servers, e-commerce etc to a 3 rd party at a carrier neutral collocation facility

3 June What is condominium fiber? z A number of organizations (schools, hospitals, businesses and universities) get together to fund and build a fiber network z Carrier partners are also invited to be part of condominium project z Fiber is installed, owned and maintained by 3 rd party professional fiber contractors – usually the same contractors used by the carriers for their fiber builds z Each institution gets its own set of fibers, at cost, on a 20 year IRU (Indefeasible Right of Use). z One time up front cost, plus annual maintenance and right of way cost approx 5% of the capital cost z Institution lights up their own strands with whatever technology they want – Gigabit Ethernet, ATM, PBX, etc z Ideal solution for point to point links for large fixed institutions z Payback, with the current level of prices, is usually less than 18 months!!!

3 June Municipal Condo Architecture School School board or City Hall School Telco Central Office Central Office For Wireless Company Condominium Fiber with separate strands owned by school and by service providers Carrier Owned Fiber Cable head end Average Fiber Penetration to homes Colo Facility / Fiber Splice Box

3 June Benefits to Carriers z Cablecos and telcos: helps them accelerate the deployment of high speed internet services into the community z Small Innovative Service Providers: provides opportunities to offer service to public institutions as well as homes z e-Commerce & Web Hosting Companies: generates new business in outsourcing, web hosting, Hosting etc.

3 June Montreal, Quebec (consortium) z Municipal authorities, school boards, RISQ (Réseau d’informations scientifiques du Québec – Quebec scientific information network) and IMS (IMS Health Canada) have joined in a consortium to build a municipal owned dark fibre network. y Schools can be connected for an average of $80 per month, per school based on a 20 year amortization of the fibre & eliminate the network servers at each individual school y Each school has essentially unlimited bandwidth (100 Mbps) y Schools LAN can be extended back to the central administrative site. Maintenance, Backups and Software Updates can all be done much more cost effectively from the central administrative building. y Schools are able to explore new high-end applications such as video conference & Voice over IP. z In Montreal, the estimated payback for dark fibre is between 6 months and 2 years.

3 June The case of FTTH (Fiber to the Home) z Problem: How to provide facilities based competition with FTTH? z The incumbent avoids heavy regulation z First generation FTTH models assume the old telco model where competitors can only get open access e.g. PON (Passive Optical Networks) z Second generation FTTH models assume structural separation between service providers and an “aggregator” using Gigabit Ethernet or ATM z CANARIE (the Canadian Research & Education Network) proposes a third generation FTTH model with structural separation using condominium fiber and choice of aggregators or service providers through point to point fiber and RPON (reverse PON)….

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

3 June Gigabit to the Home ISP B ISP C Splice Box Up to 15 km Customer owns fiber strand all the way to Neighborhood Node X X 864 strands ISP D ISP E Colo Facility with RPON Colo Facility Business with dual connections Municipal Condominium Fiber Trunk

3 June RPON Passive Optical Splitter TDM return Aggregator ISP Neighborhood Node Switch Customer Controlled or Owned Fiber Active laser at customer premises

3 June Regional Networks in EU zSweden zUK zIreland zGreece