Real broadband, real growth

Dirk van der Woude

Ontwikkelingsbedrijf Gemeente Amsterdam

2

…like that of the British steam railways…

1838 Netherlands: choice between speed barges or steam…

Effect of infrastructure…

3

Fiber?

4

And WiFi was important too…

1792Lille => Paris:• 15 stations• 36 characters in 32 minutes• all records broken, huge success

•And up to 1848 cause for the French to forgo investing into a copper telegraphe network

5

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6

Each industrial revolution is underpinned by new

infrastructure

1875

1971

1829

1771

1908

THE AGE OF INFORMATIONTECHNOLOGY

THE AGE OF OIL, THE AUTOMOBILE,PETROCHEMICALS

AND MASS PRODUCTION

THE AGE OF STEEL ELECTRICITY AND HEAVY ENGINEERING

THE AGE OF RAILWAYS, COAL AND THE STEAM ENGINE

THE “INDUSTRIAL REVOLUTION” IN ENGLAND

GLOBAL DIGITAL TELE-COMMUNICATIONS AND

ICT SUPPORT NETWORKS

ELECTRICITY, TELEPHONE, HIGHWAYS AND AIRWAYS

TRANSCONTINENTAL COMMUNICATIONS, STEAMSHIPS,

RAILWAYS AND TELEGRAPH

CANALS, TURNPIKE ROADS AND MAIL COACHES

RAILWAYS, PENNY POST AND TELEGRAPH

Source: Carlota Pérez

7

Old shoes are nice (some are quite old…)

Semaphore(portable version: Napoleon Bonaparte, 1802)

Optical chip throughput: 1,6 Tbs (april 2006)

Fiber speed: 8 Gb/s over 30,000 km (march 2006)First trans atlantic fiber (1988), First usable fiber optic cable (1970)

First TV Transmission through coaxBerlin Games (1934); First pilot in USA, AT&T (1936)

Coaxial cable patented in GermanyErnst Werner von Siemens (1884)

First demonstration of electric telephoneAntonio Santi Giuseppe Meucci (Havana 1849, NewYork 1854)

1875

1971

1829

1771

1908

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So let us be thankful for copper and coax!

however…

Imagine a world without having the age of steam…

9

1999 - 2001: awareness Amsterdam

Can we be sure copper & cox networks are future proof– Practical speed

– Parallel use (video)

Not able to sustain the city’s economic & social needs– Like continuing strong old and new media & ICT sector

– Like citizens overwhelming web use (2006: > 85%)

“Living at a dirt road? Don’t buy a Ferrari”– Services follow infrastructure

– Creative sector & citizens will find out use

– Local government facilitates

Time for new network?

10

Amsterdam – employment(total 412.000 working persons)

arts media and entertainment creative business services

content hardware telecommunication

financial software consultancy

Other

11

Amsterdam internet exchange: growth

Worldwide peak speed records: July ‘05: > 50 Gb/s

October ’05: > 100 Gb/sMay ’06: > 154 Gb/sJune’07: > 282 Gb/s

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VDSL2 – laboratory conditions

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• And of course there is this ‘contention’ thing…

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Shared capacity…

So:• Better live nextto the central office…• And of course still there is this ‘contention’ thing…

• Parallel speed? Ams-IX per sub:UPC 40 kbitsEssent: 60 kbitsXS4All: 67 kbits

xDSL8 - 14 Mb/sdown,

0.7 – 0.8Mb/s

up

Leaves for web use: ? Mb

IP TVSD low = 3 to 4 MbSD normal = 4 to 6 MbHD low = 8 to 12 MbHD = 18 to 20 Mb

Two phones: 2 x 0,2 Mb

http

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First user test of Amsterdam FttH

• Advertised speed: 100 Mb up, 100 Mb down

• In practice (first days): 88 Mb down

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Japan: 270,000 new FttH… per month

Japan wireline subs added Q3-'04 through Q2-'06per type of line in % of total added

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

100,0%

2004. 09 2004. 12 2005. 03 2005. 06 2005. 09 2005. 12 2006. 03 2006. 06

Cable xDSL FttH

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Wireline broadband Japan, 1999 - 2006plus prognosis 2007 - 2008

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

1999.032000.032001.032002.032003.032004.032005.032006.032006.062006.092006.122007.032007.062007.092007.122008.032008.062008.092008.12

thousands

Cable

xDSL

FttH

PrognosisFactual

Oct 1, 2008

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FttH, elsewhere in Europe just a pick (1)

France, the battle for & around Paris– Iliad: 1 million FttH at 1 billion Euro investment (City of Paris

supporting)

– Neuf Cegetel: in 2009 we want 250,000 FttH (50 Mbits) at euro 29,90

– France Telecom, 2007: FttH (100/10 Mbits at euro 44,90) in Paris, Poitiers, Marseille, Lille, Toulouse & Lyon. Target: 200,000 subs end 2008

– Noos Numericable, march 2007: “Massive investment towards FttH”

– over 100 broadband projects France with communal participation

– Nov. 2006, French government: 4 million FttH in 2012

Germany: competitive teleco’s announcing FttH– f.e. NetCologne: all of Cologne, to be followed by Bonn, Aachen?

(NetCologne = 100% GEW Köln AG = 100% City of Cologne)

– Other projects in Schwerte, Norderstedt, Hamburg, Gelsenkirchen, Dessau, Magdeburg

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FttH, elsewhere in Europe just a pick (2)

Vienna, Zürich (muni energy corp’s): – FttH in whole city

Norway: Hafslund energi (53% owned by City of Oslo)– FttH to half of Norwegian population

Sweden: – 200 of 289 communities own a fiber network

Denmark: energy corps doing FttH – 2008 – 2009 to 35% of homes (= 50% of population)

UK: – Oxfordshire project, part FttH (?), part Fiber/VDSL

– Rest of UK, according to BT & DSG: “12/1 Mb is enough for all & ever.” “No fiber please, we ‘re British”

– However, Ofcom report march 2007: “Last mile will have to be fiber”

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Hauts-de-Seine: 700,000 connections Western part of Greater Paris

– pop. 1.5 million, 100.000 SME’s, 880.000 jobs, 85% in services

– Per capita highest income of France

2005, adoption of proposal by the Chairman of the

Conseil General– FttH to all population and companies

– With a maximum subsidy of euro 70 million

Said Sarkozy: “Copper is not gonna cut it, we need

fiber”

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FttH in the EU, some examplesKöln

NetCologne200,000

FttH

Vienna

1 million FttH

Paris, Iliad

1 million FttH

Hauts-de-Seine

FttH

Milan

FttB

Stockholm

Dark fiber

Amsterdam

40,000 FttH

Municipal financialparticipation

n.a.

250 million n.a. 75 to 100 million worth of support

Up to 70 million

subsidy

100 million 100 million 6 million of 30 million (passive

layer)

Open network? No Aim: yes Yes? n.a. No Yes Yes

Public

Market

Support

Subsidy

passive

servicesoperator

Problem for EU?

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Three layers, three types of investors

40,000 homes passed now – more than 450,000

later on

Passive access network provider 20% municipal

Wholesale transmission provider

100% market

Service providers100% market

consumer/ SME

Rent

Rent

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Three kinds of financial dynamics

40,000 homes passed now – more than 450,000

later on

Passive networkReal estate like investment(Highly?) Profitable on long

term

Transmission Attractive OpEx, acceptable

CapEx – profitable in few years

ServicesHigh OpEx, Low CapEx

Quickly profitable

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6

6

6

12

30

Passive, market, investors Passive, market, housing corporations

Passive, City Passive, market, loan

Active, market

Translated into investments (millions of euro)

Public

Market

Support

Subsidy

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Fiber-from-the-Home 40,000 meter boxes, 10% of Amsterdam

Boroughs of Zeeburg (100%),

Oost (part)

& Osdorp (part)

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Architecture (1)

three-layer model• Passive fibre infrastructure: Point-to-Point

• Unbundled local loop of fiber = maximum competition at upstream level in value chain

• Largest capacity for future growth

• Active layer: Active Ethernet

• Applications services layer, Service providers are being offered transparent access:

• with discrete virtual LANs (VLANs) for each service on a per user basis

• allowing multiple services to be delivered and invoiced to each home in parallel (i.e. multiple ISP’s, Citywide Intranet, closed circuit IP-based surveillance, IP-TV, care and medical services etc.)

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Architecture (2)

Open network– Concession of 8 years for operator/investor, after that more operators

possible

– Operator is non discriminatory wholesale seller of capacity

Why not x-PON– Avert risk of having to (expensive) re-digging

– Labor costs dominate, will rise with inflation

– Short distances, so savings on cost of material (fiber) are small

– No lock-in of equipment supplier which stifles innovation

– Impossible to have different technology/supplier per subscriber line

Vragen?

www.glasvezelamsterdam.nl

&

www.citynet.nl