Saturday, September 19, 2009

WBA and innovation at the center of FTTH developments

We had our first FTTH NL conference last Thursday, and I am happy to say that it was a big success. We will likely put on a second edition next September. You can still find the program here (and for those of you who attended, you can download the presentations).

There was a clear distinction between those who looked at FTTH indepth by the nature of their business (Reggefiber, Emtelle, FTTH Council), and those who followed the latest mantra (it's not about the network, it's about the services) - taken one step further by KPN who claim that it's not about services either - it's about whatever you can imagine you want to do with it.

At the same time, three out of a total of eleven speakers had to do their utmost to make a connection to FTTH. But this provided the topic with extremely valuable context and perspective.
  • Tele2 NL, focusing on VDSL2 for now, but an FTTH trial wil be conducted in 2010. And: it was acknowledged that VDSL2 is an interim strategy.
  • UPC, FTTH's nemesis, however had an interesting quote: "Should we need to do FTTH in 10, 20 or 30 years, we will."
  • Ams-IX doesn't directly feel the effect of FTTH, because uptake is a very gradual process. Interestingly, community services (local traffic kept on-net and hence off the Internet) will grow its share of total traffic.
Our regulatory session (with Opta and a lawyer for alternative operators) focused on WBA. Opta has chosen not to regulate this service (the bitstream wholesale service that ISPs buy from operators) in order to stimulate newcomers to become an operator themselves. Opta claims that this worked well in the DSL world. I cannot quite see this - it's a stagnant market with just three unbundlers, and in an FTTH context it still isn't flying yet. Our Bird & Bird lawyer drew the obvious conclusion: we need WBA regulation in order to allow newcomers to enter the market. It is the first step on the ladder of investment. Once they have gained a market presence, they can move on and become an operator.
One thing he also pointed to was equal time-to-market, which isn't satisfactorily regulated at this point for ODF access (wholesale service bought by operators from the network owner).
On the whole however he did identify a certain 'investment run', with Reggefiber kickstarting the market, KPN buying into it and now Tele2 doing VDSL and cablecos doing Docsis 3.0.

Rabobank's Henk Doorenspleet had a very smooth and appealing presentation. He appeared to be quite worried over government funding, because he quite directly notices that this is preventing private financiers to enter the market.

Personally, I was happy to see a favorite topic of mine being taken up several times: where does innovation arise?
  • At the active layer? This is the traditional ISP view, who feel they need to unbundle copper of fiber. So they need to be an operator. However, there is only limited (economic) space in each PoP to justify this model for more than 2 or 3 players.
  • At the services layer, but on-net? This is the view of Genexis. It has a drawback: WBA isn't regulated. So what you see now is that KPN and cablecos are starting to make innovation happen themselves and seem to be trying to keep RSP's out of the market.
  • At the services layer, but OTT? This is the Google, Skype, iTunes model. A lack of QoS and security is a drawback, that is however pushed to the background by network upgrades and the rise of CDN's.
Any suggestions, ideas, views here?

Thursday, September 10, 2009

ECI Telecom trials DSM L3

Short follow-up on this post (DSM increase's xDSL's reach). DSM L3 is trialed by ECI Telecom at 3 European telcos to extend the reach and performance of VDSL. This could be a way to deploy VDSL2 from the Central Office, where existing ADSL2+ DSLAMs can simply be replaced, instead of from the cabinet. Effectively, with DSM you don't need to do FTTC to extend fiber from the CO to the cabinet.

The strategy pits Tele2 (VDSL2 from the CO) against KPN (VDSL2 from the street cabinet). Tele2 obviously has a much cheaper strategy and can truely regard it a solid interim strategy before starting to unbundle FTTH.

New milestone at Ams-IX: the 700 Gb/s barrier

AMS-IX Traffic Statistics - yearly graph

Sunday, September 06, 2009

Service innnovation on FTTH: institutions need help migrating online

Today I visited the Glasdag 2009 conference put together by (the website devoted to community and other efforts towards FTTH in the Netherlands) and SBNA (the non-profit behind a number of such initiatives in the city of Amersfoort). The conference was aimed at volunteers interested in launching FTTH initiatives in their home towns. Speakers included Kees Rovers (the driving force behind the Nuenen and Eindhoven FTTH networks built by OnsNet) and Jan Griffioen (Reggefiber).

The conference was opened by an Amersfoort city council member, who hailed the social and economic benefits of these networks. He also hinted at the 'option value', quoting history: when the telephone was first invented, its main purpose was to inform people that a telegram was on its way.

Kees Rovers first gave his 7 key elements to successful network deployment:
  1. Business case. Make sure you have one, including funding. A high take rate is essential. Remember that fiber is cheap; it costs only EUR 1,000, which is negligible when compared to your home's value.
  2. Community sense. Everybody needs to be in.
  3. Triple play. This will make the network finance itself.
  4. Communication. Forget fiber speak. Keep that 75 year old granny in mind when talking about your plans. Focus on telephone and television services.
  5. Local services. This is something the cableco can't replicate. Think of the local soccer club, even marriages taking place in the local church.
  6. Customer service. Remember that people hate call centers.
  7. Reliable network.
Jan Griffioen outlined Reggefiber's long-term strategy. Connecting every Dutch home in the next 10-15 years is core to that strategy. The consumer-facing brand is Glashart. Today, he was able to add one more network to Reggefiber current c. 35 projects: the Kattenbroek area in Amersfoort.

A few things stood out. First, if any demographic needs to converted to the Fiber Religion, it's .... women. It was practically a men-only conference.

Second, Kees Rovers conspicuously de-emphasised fiber in order to put services in the spotlight. This is all fine and dandy, but it must be kept in mind that he is now involved with KPN's 2x5 trial towns, and that half of these are around VDSL, not FTTH. But obviously, on the whole he is quite right. If the end-user is to be converted (remember: a high take-up rate is needed for the business model to work), then it must be basic and understandable services to convince them to sign up. Many city workers and departments come to mind here: doctors, soccer clubs, church, library, school, hospitals, local broadcasters, city hall, etc.

What really stood out was that all these grassroots initiatives really appear to grasp this issue. But was even more striking, was Kees Rover's observation on how to get it done. Don't count on any organisation here to take care of this issue and migrate their services online themselves. It will never happen this way. That's just not how people are. They need to be forced, one way or another.

One final word: this movement is behind taking a lot of traffic off the internet. It's all local traffic. It has been reported before that local traffic can make up as much as 50% of traffic on FTTH networks.