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How the Decentralized Technology is Changing the World, Fiber in Holland, User Configured Nets in Canada

September 1, 2006 Ewing, NJ --

How Decentralized Technology is Changing the Global Economy

We start this issue with JP Rangaswami’s Ariadne 5th Anniversary Celebration reflection on “Building Society” for the 21st century. It is a rather stunning exposition of where a half-century of global peace and relative prosperity for the developed and now the developing counties of the world combined with advances in information technology and the internet can take us. Well thought out and highly optimistic its waxes eloquently on the subjects of Internet and individual capitalism. It looks at what wel-motivated and smart people can do with these new tools and assumes that they will work for the general good and produce the most favorable outcomes.

In the second half of the opening article I offer my own assessment in urging my readers to step back from the telco wars and look at debates like network neutrality in terms of general impact on the economy rather than on the LECs bottom line. I comment that “We are enmeshed with so many new pathways from which flows new information that seeing the big picture process of the entire system is not something that occurs to most people as possible or even desirable.”
I ask: When will we see that the Future we want lies outside the box of our old thinking? Are not we so well trapped inside our respective boxes that we don’t have a view of the ongoing metamorphosis of our world?

Trapped inside the box we see only the greedy telcos and the corrupted Regulatorium. We are stuck on the other guy’s turf where he is in control and making us look foolish in front of the broader public we’d like to reach. We think Internet changes everything, but eight years after the Clue Train left the station we still are far too disorganized and on the fringe rather than main stream.

I look at an inherent dichotomy of hedgehogs specialized technologists who design and make new products and high level strategists who try fox like to make general sense of where change is headed. Thinking that it would be useful if one could get some kind of global focused understanding of where this chaos is headed, I suggest that perhaps one is saying that it is the technologists who are hedgehogs, rather than the technology; and that foxes make the best strategists?

Amsterdam Fiber Build

Through an interview with Herman Wagter the Managing Director of the CityNet build, I look at advances in fiber infrastructure in Amsterdam. This great port city now has about 11% of its jobs related to IT, web services, content management and related design and internet transport issues. It has undertaken more than three years of careful study of what its citizens want. Not from the Internet but from basic communications tools. It has very very carefully put together financing that will withstand EU scrutiny and next month will start stage one of the build bring a pair of fibers into every apartment as part of an open access network with the entire city of 400,000 apartments build with in the next five or six years.

The Amsterdam effort is, like Vasteras Sweden focused more on dealing with social and economic issues and on communications patterns than on the technology. As Herman Wagter Managing Director for the build said to me “If you look at these communication patterns you will see that a lot of them are local and we told them that by using IP we could keep this traffic local and do it a lot cheaper. This is why we decided to call it Citynet to make them understand that it was about the city and it’s about the people.”

“Why don’t we talk about triple play? We don’t because I think it is baloney! The people don’t want it. Yes, they want these three services, but the bundle is being pushed on them. People want choice above all, while the industry keeps pushing from the point of view of the last mile revenue generating unit “I have to tie this customer to my line for the rest of his or her life.”

Canarie’s Web Services Light Path Network

Bill St Arnaud explains what Canarie is doing with its expanded science network using UCLP version 2 that is fully based on web services and designed to enable researchers to set up and provision their own networks tailored especially to their research requirements. What Bill is doing is an exciting example of what could be done if LECs are ever forced away from the current business model of enforcing scarcity in the last mile. Bill points out that Canaries open source UCLP software can even be used by undergraduate students to work with bandwidth much less than a lightwave. He explains quite crisply what he is doing. UCLP is simply a “user controlled” provisioning and configuration tool that sits below the network layer.

Services providers for decades have used provisioning and configuration tools within their NMS or OSS/BSS to setup circuits for customers. These can be optical circuits, wireless, frame relay, MPLS tunnels, etc etc. The circuits can then be used to interconnect to the Internet or for private networks.

The intent of UCLP is to let the end user, rather than any single service provider, configure and provision their own network from a heterogeneous mix of fiber, wavelengths, wireless links, MPLS tunnels, Ethernet VLANs even tin cans on a string from a variety of suppliers. UCLP also allows a provider to partition their switch and router and offer that partition as another element in the mix of components with which an end user can compose their own network (or set of connections to the closest peering point). UCLP can be used to provision packet or circuit switched circuits. In the late case we demonstrated this capability with the Nortel DRAC product

UCLP is NOT about setting up end-to-end wavelengths (but has been often used for that purpose)
UCLP is NOT about bandwidth on demand (but has often been used for that purpose)
UCLP is NOT about dynamic circuit switching (but has been used for that purpose)

Because UCLPv2 is built entirely around web services and web services workflow, it makes user provisioning and configuration of circuits very very easy. More importantly it allows other devices that are represented as web services such as instruments, sensors and other networks to be easily added to the configuration mix.

Symposium Discussion

Tom Vest explains why the telcos must enforce scarcity of bandwidth in the last mile if they are to preserve their current business model. As we state, whether those business models should be preserved is an entirely different question. It is critical to understanding why the LECs will stand at the end of every drive way to be sure we cannot break down their territorial control.

If we succeed, for them it's game over. They cannot afford to give us any opening. Right now we, are not succeeding. The FCC has sold us down the river. The Congress is selling us down the river. The state PUCs are beginning to give the LECs what they want, and so are the courts. We may be master of our driveways, but soon we can't cross from the driveway to the street without paying the LEC its charges.

Doc Searls is learning how narrow the window of opportunity for bypass is cracked open. Most of the rest of us likely have little idea. The lesson so far in North America is that a telco simply cannot compete on an open access basis. They must either maintain their strangle hold over the local loop or die. I am happy for them to DIE. I think the next five to ten years will see a global struggle to kill them off. Without their transformation, killing them is the only choice. The ones in the US I don't believe are capable of transformation.

We also offer a spirited regulatory discussion between Erik Cecil and Fred Goldstein and a brief discussion on emergent DOCSIS standards with David Reed, Fred Goldstein and Bill St Arnaud.

Forthcoming November Issue

The November issue will Focus on the hot Dutch fiber market. I completed a long interview with Hendrik Rood of Stratix Consulting on August 24. Dik Vessels and Lijbrandt are doing commercial over builds of small towns in the Dutch Tulip districts. With a 73% take rate in Hillegom they have KPN, the Dutch LEC, so worried that it has offered a deal to share half the expense if it too can run a fiber to the user’s home.

They most certainly are no open - even when they claim it's 'open': Lijbrandt provides triple play, no competitive offers.

However, as their offer is quite competitive to those of the cable- and telco incumbents they get some 85% subscription at connection time.

To which a very clever, local Lafayette like style marketing helps a lot too, See for example .

http://www.kadaka.nl/info/courant/lb_courant_5.pdf for how they make use of local priests to preach their USP's. However, they deliver what they promise. There is local town TV, in HD (soon: 1080), church and school connections etc.

Very clever too: having the connection made at the time your street is rolled out is free and without an obligation to subscribe to paid services. Taking the physical connection at a later stage leads to a penalty of $ 225. Next, subscribing to services within one month after physical connection is free, subscribing at a later stage costs $ 110.

So they manage to communicate, with a smile: "Not taking this now will set you back $ 325 later on, while in between missing out on 20/2 Mb web, 55 analogue channels (double the number offered by Warburg/Cinven cable), 40 digital channels, local TV in HD, scores of radio channels and cheat telephone rates - at a monthly rate of $58,- (VAT included) for the whole thing"

Clever, clever...

The way Lijbrandt does it in smaller towns like Hillegom (pop. 22,000 or so) is the only way to do it profitable. However, on the scale of cities like Amsterdam one can do open networks. That's what the people behind Lijbrandt understand quite well too.

It could well be, when economies of scale kick in, more openness will be the result, in Hillegom as well.

Last observation: Lijbrandt understands very, very well that what the NYT wrote about service levels of tel- & cable-co's being paramount in getting & keeping subs (for example. think of them as customers instead of subscribers.) Over here LGI/UPC does not even have subscribers but 'RGU's', also known as Revenue Generating Units. Talking about dehumanizing your assets!_

For the rest of the issue you will have to subscribe.

Contents

How the Tech Changes the Underlying Economy

Will Economic Interests Standing Behind the Political System Allow Leveraging of What is the in Abundance Rather Than be Driven by Scarcity?

Editor’s Introduction p. 1
Building Society for the 21st Century p. 1
Thinking About a Meta-web in Search of Where the Value Lies p. 4
It is All in the Metaphor p. 6

Building Amsterdam CityNet

After Three Year’s of Careful Planning
Treating Effort as a Business Venture Well Connected to City’s Needs with Sophisticated Financial Planning

Critical to SuccessUnderstanding Telecom Psychology from a Grassroots Point of View p. 8
Each Apartment Gets its Own Fiber Strand p. 9
CityNet Has Many Local Strengths p. 10
Why We Needed a Three-Layered Network Structure p. 13
Network Economics -- Why the Interests of the Community Must Come First p. 14
The Influence of CityNet on City Economics p. 15
The Financial Model p. 17
Banks Have a Conflicted Role p. 18

UCLPv2 - an Open Source User Controlled Network Configuration and Provisioning Tool

Via Web Services Users May Configure Personal Network Architecture from Light Paths to Much Smaller Bandwidth

Background p.20
Basic Changes in Optical Network Architecture p. 23
Another Look at the Meshing p. 24
The Critical Role of Web Services p. 28
The Bandwidth Problem p. 34
How It Would Work p. 37
A Summary p. 37

On-Going “Tussle” for Serving the Edge, Fiber Drought in the US, Regulatory Nastiness

Doc Searls: Thoughts on Where the Internet “Is” p, 39
The LEC Imperative of Territorial Control p. 40
Cell Phone Business Models and USF Corruption p. 41
From L.D. Billing to Content Regulation p. 42
Regulatory Foibles p. 45
Unbundling and the CLEC p. 47
Intercarrier Compensation Issues p. 50
Regulatory “Grace” is Gone p. 54
Some Sins of the Rural ILECs p. 55
Japan and Korea Winning Battle of Bandwidth p. 56
Lightwave Based DOCSIS Discussion p. 58

Executive Summary p. 62
Contents p. 65

Contributors p. 67

Symposium & Interview Contributors to this Issue

Affiliation given for purposes of identification - views expressed are those of the contributors alone

Erik Cecil, Experienced Telecom Regulatory Counsel
Frank Coluccio, President DTI Consulting Inc., New York City
Jim Forster, Distinguished Engineer, Cisco
Fred Goldstein, Principal of Ionary Consulting, author of The Great Telecom Meltdown
Kevin Marks, Technorati Engineer, Coauthor Micro Formats, Quick Time Developer
Doc Searls, Editor Linux Journal and Doc’s IT Garage blog, Clue Train Co-author
Bill St. Arnaud, Director Ca*Net4, Canada’s high speed research network
Dirk van der Woude, Civil Servant Amsterdam and fiber expert
Herman Wagter, Managing Director Amsterdam CityNet Build<