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Contact syeager@fyi-net.com
Defining Bandwidth Trading & Discussing Potential Scenarios for Obtaining Bandwidth Prepared by: F. Scott Yeager FYI-Net, LLP 3403 Marquart St. Suite 200 Houston, Texas 77027 “The future belongs to those who see possibilities before they become obvious.” - Theodore Levitt, The Marketing Imagination 9/21/2018 Contact
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Bandwidth Risk Management Tools
Price Flexibility Customer is paying too much for bandwidth Volume Flexibility Customer has too much or too little bandwidth Customer’s Bandwidth Demand Profile Utilization over Time % Time Allows More Efficient Allocation of Bandwidth Creates Incremental Bandwidth “Headroom” Provides Framework for Tiered QoS Bandwidth Allocation Embedded Financial Products Network asset financing options or offering other value added services Monetizations Customer wants to bring forward value in its bandwidth contract 9/21/2018 Contact
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Contact syeager@fyi-net.com
The Promise of Bandwidth Trading Products delivered by Traders and Service Providers Market Index of Bandwidth $350 Cost Cap $300 Example $250 Customer’s Bandwidth Cost with Price Protection $/Mbps $200 Cost Floor $150 $100 2000 2001 2002 2003 Transit costs depending on the amount used Provides price protection within a specified range of prices Rate cap to protect bandwidth cost exposure to usage peaks Enhance earnings stability 9/21/2018 Contact
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Precursors for Rules to Change to create Bandwidth Market
Sellers must be willing to sell in a Trading Environment Sellers must be willing to allow provisioning to occur via neutral 3rd parties with documentable proof of Delivery per Terms Multiple Sellers must be willing to play by new rules and use 3rd party delivery approach Buyers must be willing to buy in a new way Buyers must have confidence in ability of market to deliver per agreed Terms Buyers must see cost and delivery benefits to change buying patterns 9/21/2018 Contact
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Old Vs. New Approach to Buying Bandwidth
The Old Rigid System How can I make my network work? Call Provisioning How can I connect my network for a Customer? Customer Carrier Bandwidth Provisioning I need some Bandwidth Order Many Months P1 P2 P3 P4 P5 P6 The New Market P7 P8 P9 P10 P11 P12 Financial Price I need some Bandwidth P13 P14 P15 P16 P17 P18 Prov 1 Prov 2 Prov 3 Prov 4 Prov 5 Prov 6 Customer BWTradingOrg. V1 V2 V3 V4 V5 V6 V7 V8 V9 V10 V11 V12 Physical Delivery 6 Days V13 V14 V15 V16 V17 V18 P# Financial Player V# 6 Seconds Physical Player 9/21/2018 Contact
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Contact syeager@fyi-net.com
Current Bandwidth Procurement Process Business units individually negotiate bandwidth requirements. Vendors have unknown pricing, non-standard SLA’s, long term contracts Corp A Qwest Corp. World Com . . Int’l Level 3 Business Unit Creates Bandwidth RFP Bandwidth requirement determined from utilization analysis Further analysis done to estimate future bandwidth needs RFP response process (Q&A, Tech Eval, Financial Eval, etc.) Selected Vendor and continued price and SLA negotiation Continued price and SLA negotiation Legal negotiating and contracting Provisioning, implementation, and handoff to MFST (local loop and backbone) Repeat Process for each Business Unit and each incremental bandwidth need Hope that analysis and negotiation were “right” (I.e. don’t have too much or too little capacity. Not paying too much) Weeks Months More Months 9/21/2018 Contact
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Contact syeager@fyi-net.com
Bandwidth Procurement using a Bandwidth Trading Organization (BWTradingOrg.) Corp Corp. Int’l . . . . . . Daily index based pricing (buy and sell) Standard SLA terms Short/long term BWTradingOrg. Market Customer and/or BOS- enabled application determines requirement for more bandwidth Bandwidth capacity, term, and market price selected from BWTradingOrg. Marketplace BWTradingOrg. provisions across pooling points for selected capacity, term, and price Minutes/ Days Handoff to Cust. Predefined Standard QoS and SLA’s Customer requires more capacity Customer Sells Excess Capacity via BWTradingOrg. Market Place Customer ends up with too much capacity 9/21/2018 Contact
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Multi-IXC Fiber Network
Local Loop and Long Haul networks connected via Pooling Points in each city to allow End User to access lowest cost providers of Bandwidth via the Pooling Points CLEC Switch Multi-IXC Fiber Network PBX Customer ILEC Switch Patch Panel AT&T BW Trading Org. Pooling Point Corresponds with slide 17 of original Copper Fiber Optic Dedicated Switched Used Unused ILEC CLEC 9/21/2018 Contact Diverse Routed MAN
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Contact syeager@fyi-net.com
How do you get all Providers to Deliver Bandwidth to Customers via Trading Organizations? Need the Pooling Point Concept to be Physically/Legally in place in the market. BWTradingOrg. Carrier 1 Carrier 2 Pooling Point Pooling Point Customer Customer Local Loop Local Loop Pooling points are facilities where long-haul carriers connect with each other and with metropolitan networks, allowing for bandwidth trading. Their deployment is key to creating a liquid market for bandwidth. Pooling Points provide a physical connection for participants active in a commodity market for trading TDM and IP capacity. As carriers increasingly participate in this market we will begin to see price transparency through the creation of indexes. To be treated as a commodity, bandwidth must possess fungible characteristics. Therefore, standard SLAs are required. Carrier 3 Characteristics: Price transparency via indexes Instant provisioning of circuits Standard SLA Benefits: Increased flexibility Reduced provisioning time Bandwidth on demand Scalability Carrier 4 Carrier ... 9/21/2018 Contact
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Contact syeager@fyi-net.com
What does the Pooling Point Technology look like? Digital Cross-connects or Optical Switches 9/21/2018 Contact
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Westbound SONET or DWDM Eastbound SONET or DWDM
Pooling Point Metropolitan Area Architecture Longhaul Backbone Access Point Edge Switch Pooling Point ( Core Switch DWDM Connection to Longhaul Westbound SONET or DWDM Eastbound SONET or DWDM 9/21/2018 Contact
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Pooling Points must be defined in relation to Local Loop Fiber, Carrier Hotels and Multiple Providers who could connect 9/21/2018 Contact
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Bandwidth Trading using Pooling Point Approach 9/21/2018 Contact
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Contact syeager@fyi-net.com
Delivering Bandwidth using Pooling Point Approach & Targeted PP Infrastructure Carrier A Carrier B Carrier C Bandwidth Buyer BWTO Pooling Point Los Angeles Denver Chicago New York Atlanta Baltimore Boston Chicago Dallas Denver Houston Las Vegas Los Angles Miami New Orleans New York Philadelphia Portland Targeted Pooling Point Locations: London Paris Amsterdam Frankfurt Brussels Dusseldorf Salt Lake San Francisco San Jose Seattle Washington DC 9/21/2018 Contact
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Targeted Cities with Pooling Points
Pooling Point Network Seattle London Amsterdam Portland Brussels Tokyo Paris Dusseldorf Boston Frankfurt New York Salt Lake City Chicago Philadelphia San Francisco Denver Washington San Jose Las Vegas Los Angeles Atlanta Dallas New Orleans Houston BWTradingOrg. currently has 25 pooling points. This year we plan to add 10 additional pooling points. Most of the new pooling points will be located outside of the U.S. Miami Enables Switching Between Independent Networks; Connects Metro Loops Enables Robust Scalability 10 Pooling Points 25 9/21/2018 Contact
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Contact syeager@fyi-net.com
Bandwidth available at TDM/SONET/Wavelength Layer limited to City Locations with 3rd Party Neutral Pooling Points Seattle London Boston Chicago Salt Lake City New York Philadelphia Denver San Jose Las Vegas Washington D.C. Phoenix Los Angeles Atlanta Tokyo Dallas Houston Miami Potential for liquid Bandwidth Trading limited to Pooling Point Locations for City Pair Trading (Go to Enron & LightTrade for most recent lists of Pooling Point Locations) 9/21/2018 Contact
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Example: Using Pooling Points to build a National Backbone Network
Enabling Carrier & Router Diversity Options Los Angeles Dallas San Francisco New York Chicago Atlanta BWTradingOrg. currently has 25 pooling points. This year we plan to add 10 additional pooling points. Most of the new pooling points will be located outside of the U.S. Carrier A Carrier B Carrier C Carrier D 9/21/2018 Contact
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Contact syeager@fyi-net.com
Example of use for Pooling Points: Connecting Storage Providers across Pooling Points Connecting Storage Providers within the same pooling point. ILEC CLEC ISP Enterprise Typical Buyers: CLECs, ILECs, ISPs, and Large Enterprises SPoP BWTO PP City A City B BWTradingOrg. Intelligent Network (BWTO) SPoP Pooling Point Service Demarc OC-12 or OC-48 Dedicated Local Facilities CFA BWTradingOrg. Circuit Facility Assignment Demarc Dedicated Local Facilities CFA BWTradingOrg. Circuit Facility Assignment Demarc SPoP SPoP Carrier 3 Carrier 4 Carrier 1 Carrier 2 Typical Long Haul Carriers, Are Both Buyers and Sellers SPoP CPE Buyer CLEC or ILEC DS3 CLEC or ILEC Service Demarc Customer Premise Equipment (CPE) SPoP 9/21/2018 Contact
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Example: Using Bandwidth Trading to access Nation Wide Storage SPoP SPoP SPoP SPoP SPoP SPoP SPoP SPoP SPoP SPoP SPoP SPoP SPoP SPoP 9/21/2018 Contact
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BWTradingOrg. Collocation and coordinated local loop
Customers could choose to trade IP Bandwidth if the industry were to define standard contracts and SLA’s and define the Demarcation of the Service offerings Managed CPE Managed CPE BWTradingOrg. Collocation and coordinated local loop from LEC/CLEC Demarc Demarc DS3 OC3c OC12c BWTO T1/E1 DS3 Remote Office/ Business Partner Last Mile Corporate Location Internet 9/21/2018 Contact
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Contact syeager@fyi-net.com
Historically, Multiple Voice & Data Access lines are necessary to provide access to each type of service required by the user at the desktop Video Customer External Content LAN Intranet IP Internet Host Mainframe SNA Enterprise Voice PBX Public Voice Private Voice Data Demarc Internet, ISP 9/21/2018 Contact Voice Demarc
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Special Access Service BW Trading Org. Pooling Points
Metro Connectivity: Customer access to the BW Trading Org. Pooling Point could allow the Customer to have access to multiple services. Some entity could becomes the “Information Utility”by providing Multiple Feed types per single Special Access Connection Floor A Special Access Service to all users in a building via the infrastructure BW Trading Org. buys from ILEC/CLEC Floor B Floor C BW Trading Org. Pooling Points IXC 9/21/2018 Contact
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Private Voice & Public Voice Network Intra Enterprise Video Network
Ultimate goal: All services via one connection, each service at lowest market price via trading approach, QoS value determined per application by user Private IP Intranet BW Trading Org. Pooling Points to provide access to Multiple Networks & Services via Deal Bench Customer Content Provider Closed, User Group $ $ Internet Connection Private Voice & Public Voice Network SNA Host Network Intra Enterprise Video Network 9/21/2018 Contact
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CLEC Facilities Bypass via Fiber to IXC
Discussion: How can Universities Participate? Connect to Pooling Points and buy bandwidth on Demand at TDM and IP layer in Metro and Long Haul applications. CLEC Facilities Bypass via Fiber to IXC CLEC Public Network PBX Customer ILEC Switch Patch Panel Hartford New Haven Buffalo Minneapolis Chicago Tampa St. Louis Pittsburgh Memphis Miami Austin Detroit Albany Orlando Cleveland Indianapolis White Plains Rochester Los Angeles San Jose Seattle Phoenix San Diego Oakland Portland Orange County San Francisco Sacramento Dallas Denver Washington Wilmington New Jersey Ctrl. Richmond Philadelphia Baltimore Boston New York Norwalk New Jersey No. Stamford Houston Atlanta Carrier X Starting w/ this slide original presentation and slide 16 IXC Loss of Switched Access Revenues Copper Fiber Optic Dedicated Switched Used Unused ILEC CLEC 9/21/2018 Contact Diverse Routed MAN
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