1. CANARIE “Community Condo Fiber Networks” H ow public-private partnerships can lead toward early deployment of FTTH http://www.canarie.ca http://www.canet3.net Bill.St.Arnaud@canarie.ca Tel: +1.613.785.0426

2.  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

3. GigaPOP CA*net 3 National Optical Internet Vancouver Calgary Regina Winnipeg Ottawa Montreal Toronto Halifax St. John’s Fredericton Charlottetown ORAN BCnet Netera SRnet MRnet ONet RISQ ACORN Chicago STAR TAP CA*net 3 Primary Route Seattle New York CA*net 3 Diverse Route Deploying a 4 channel CWDM Gigabit Ethernet network – 400 km Deploying a 4 channel Gigabit Ethernet transparent optical DWDM– 1500 km Multiple Customer Owned Dark Fiber Networks connecting universities and schools 16 channel DWDM -8 wavelengths @OC-192 reserved for CANARIE -8 wavelengths for carrier and other customers Consortium Partners: Bell Nexxia Nortel Cisco JDS Uniphase Newbridge Condo Dark Fiber Networks connecting universities and schools Condo Fiber Network linking all universities and hospital

4. 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?

5. The good, the bad and the ugly  Monopolies are bad  Duopolies are ugly  Private sector competition in an open competitive level playing field is good  As much as possible governments should not intrude into the marketplace.  However, sometimes government intrusion in the marketplace will produce significantly greater 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  To promote competition FCC had mandated open access and restrictions on RBOCs  Open access has largely been a failure and RBOCs are re-monopolizing  Is there a better way?

6.  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 A growing trend

7. How to introduce competition  “Structural separation” or “Facilities based competition”  Road ways are examples of competition through structural separation while parallel railways are examples of facilities based competition  Structural separation is necessary where a natural monopoly exists – e.g. city gas lines, city power lines  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 mtero 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  One strand of fiber has capacity of all of the world’s existing wireless systems  If fiber is a natural monopoly, particularly in last mile suburban areas, then “structural separation” maybe more important than facilities based competition

8. 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 FFTH and competition in residential neighbourhoods?

9. Possible Solution  Municipal Condominium Fiber Network  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  A change from the traditional telecom model where value of services is enhanced because of monopoly control of infrastructure

10. 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

11. 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 3 rd 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

12. 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

13. Condo Fiber Costs - Examples  Des Affluents: Total cost $1,500,00 ($750,00 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

14. Province wide network of condominium fiber to 420 communities in Alberta 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

15. Extended Area 372 communities GOA/stakeholder needs Proceeds from businesses (urban benchmarked rates) to GOA to further network Base Area 48 communities GOA/stakeholder needs Business proceeds to Bell (urban benchmarked rates) - $143 Million GOA - 100% GOA IRU - $50 Million GOA - 33%GOA IRU - $102 Million Bell - 67% Bell IRU Alberta SUPERnet IRUs

16. CivicNet - A City-Wide Condominium Fiber Project connecting up 1600 public sector institutions Plus 200 and more private sector organizations Oriented to Development of Backbone Infrastructure With Gateways to Tributary Systems More Fiber in More Places Faster Ubiquitous, Pervasive: 1,600 Locations E-Z High-Performance Low-Cost Internet Connectivity Foundation = Existing City Fiber Builds Chicago CivicNet

17. South Dundas IROQUOIS MORRISBURG

18. South Dundas Results  Morrisburg, Iroquios Have Fibre Hung  Electronics In and Fibre Lit  ISP’s, ASP’s all Want In he Fibre  Major Employers Inquiring  Very Positive Attitude in Community  Digital Desert to Digital Oasis  This fall – FTTH to all homes

19. Peel County Municipal Fiber Network  Mississauga, Brampton, Pell  200 km of Fibre  96 strand backbone  “Enough for small country”  12-60 strands elsewhere  12,000 strand-kilometers  Laid end-to-end = Victoria to St. John’s …...and back again

20. 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

22. 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 address the Digital Divide  To create opportunities for all Canadians  35 members including carriers, educators, librarians, communities, equipment manufacturers, etc  Chair – David Johnston  Final recommendations – June 17th

23. Gigabit Internet to the Home  With condominium fiber builds multiple carriers share in the cost of fiber build out to neighbourhood nodes serving approximately 250 homes  It is impractical to have multiple carriers own individual strands 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  The result is third commercial network running in parallel to telephone and cable for high speed Internet only  Avoids regulatory and technical issues of 911, number portability, etc  Encourages SMEs and entrepreneurs to build the infrastructure  Customer premise device is very simple and cheap  PON will be retrogressive step for FTTH

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