ManyMedia

Defining the term “broadband” is hard enough, given the various competing interests working to have the FCC see things their way. But defining the term by identifying exclusionary uses is, well, AT&T. Ars Technica was on top of this filing, and wrote up their concerns in AT&T to FCC: gaming is not “broadband,” but an added service. Specifically, AT&T is instructing the FCC to disallow certain uses of your Internet access, specifically online gaming, as part of the defining what “broadband” is.

They WHAT? That’s right, their testimony advises the FCC that AT&T knows best what we should do with our Internet access.

In testimony submitted to the FCC, AT&T advises that they (by way of the government) need to define what we can (and shouldn’t) do with our Internet access:

Specifically, the Commission must first define the discrete set of applications and online capabilities that must be made available to all Americans to achieve the Recovery Act’s goals.  As discussed below, for residential customers those services should include basic web-browsing capability, email, and online services ….  Thus, the task at hand really is not about “defining broadband” in the abstract.

The testimony continues (with my emphasis):

There are a host of aspirational broadband services that are beginning to emerge in this country, as well as myriad sophisticated applications involving streaming video, real-time voice, and the like.  All are no doubt “broadband” services.  But for Americans who today have no terrestrial broadband service at all, the pressing concern is not the ability to engage in real-time, two-way gaming, but obtaining meaningful access to the Internet’s resources and to reliable email communications and other basic tools that most of the country has come to expect as a given.

So AT&T wants to be free to deliver itty-bitty “broadband” to the rural folks.  AT&T is redefining “access” to meet a more traditional incumbent monetizing strategy: set sites low by defining a bare minimum, then find “aspirational” uses that they can bill extra for. The Ars article is worth a read. However, lessons can be learned from gamers that benefit corporate boardrooms as well. John Hagel and John Seely Brown wrote an article in last January’s BusinessWeek: How World of Warcraft Promotes Innovation. The article describes how various elements of online gaming can benefit the business mindset.

Companies seeking to thrive in a world of increasing uncertainty and accelerating change will need to foster this disposition among their own executive team and employees. They would be well advised to take a closer look at World of Warcraft, both in terms of the approach taken to foster this disposition and as a potential recruiting ground for employees who can bring this attitude and approach into the company.

AT&T isn’t looking broadly at providing access to the Internet. This is an example of Not Neutrality. AT&T has a plan, and your dreams may not be part of it.

Content, Life, Network, Policy access, ATT, broadband, definitions, FCC, Internet, Net Neutrality, online gaming, Policy

The Blandin on Broadband blog has an informative post by Gary Fields called The 4 D’s of Incumbent Telco Public Policy. Gary writes,

Just recently I had the opportunity to participate in the State of Minnesota Ultra High Speed Broadband Task Force, a public policy effort similar to my earlier efforts, but with more official State authority and legislation behind it. I was shocked to see the same strategies and tactics utilized by the provider representatives. At the same time, I have observed actions conducted by the FCC and recognize the same influences. To help others engaged in these important public policy discussions I decided to prepare a summary of the tactics deployed by providers to help facilitate a more constructive effort. With perseverance and diligence we may yet reclaim our global leadership role in telecommunications service and reap the economic benefits that position will bring.

I laughed when I read this post because while the four “D” words are so common in telecommunications (aka telco, telecom) policy, they also work on so many levels for so many people! For example, in a Dilbert world you’d see the four “D” tactics being used to help ineffective people protect their jobs. That said, there are a few more “D” words that are useful in these conversations.

The real lesson here is that if you see anyone engaged in tactics centered around these four “D” words, recognize and understand that these are diversion tactics. Their intent to distract does not diminish your priorities. You may need to respond by being more direct with your questions and needs. This is especially true for telecom policy these days.

Network, Policy broadband, choice, closed content, closed networks, control, debate, distractions, Policy, telecom

The blog called municipal networks & community broadband has an interesting article, How NTIA Dismantled the Public Interest Provisions of the Broadband Stimulus Package, on how the NTIA has gamed the stimulus rules in favor of incumbent interests.

Making private companies and public, non-profit entities equal in their ability to apply for stimulus funds actually privileges existing large telecommunications firms because they have the resources to push their way to the front of the line – especially with all the paperwork required of applicants.

The declaration that existing telecommunications companies are in the public interest is only one of the ways the NTIA has structured the BTOP to favor existing private providers.

Another is the speed definition NTIA has chosen in its broadband definition. NTIA chose minimum “broadband” speeds reminiscent of those from more than a decade ago rather than the modern speeds common across the networks of our international peers. The minimum download speed of 768kbps and upload of 200kbps is pitiful. Moreover, adding insult to injury, the anemic baseline speed is based on advertised rates rather than actual rates, perversely encouraging network owners to overstate their capabilities.

It’s sad but not a surprise, given the amount of lobbying money that the telephone incumbents put into Congress. While the NTIA’s interpretations are likely to ensure that some of us continue to have “broadband,” few of us in the United States will have meaningful access to the Internet. This is the difference between the means and the ends.

Network, Policy broadband, Internet, NTIA, stimulus funds

Perhaps it should be no surprise that when it comes to real access to the Internet, the government is swayed by promises of “broadband” and claims of existing “competition.” Federal stimulus funds are hard enough for some service providers to come by. Now we learn that municipalities wishing to provide Internet access to their citizens are targeted for exclusion. Telephony Online’s article Broadband stimulus details separating likely winners, losers, states:

One group of broadband stimulus hopefuls that has been in large part swept out of the running by the specifics of the plan is individual municipalities of any size. Though the stimulus plan stoked broad interest from municipalities earlier this year, many of them have been frustrated by the program’s preference for “underserved areas,” which the government has defined as areas where where at least half of all households lack broadband, where fewer than 40% of households subscribe to broadband, or where no service provider advertises broadband transmission speeds of at least 3 Mb/s.

Those rules sent the city of Northfield, Minnesota, for example, which had hoped to secure stimulus funds, back to the drawing board in its efforts to finance its plans. Melissa Reeder, Northfield’s information technology director, told the local press, “Honestly, I don’t think there’s a single Minnesota city that would qualify.”

This policy decision is short-sighted and will not deliver on the promises of Federal stimulus funds. Now you can expect to pay twice (once in the form of taxes to pay for the stimulus funds and once for your ISP bills) for more of the same.

Network, Policy access, broadband, Internet, muni nets, municiple networks, Policy, stimulus, stimulus funds

Chris Anderson of Wired has a new book (Free: The Future of a Radical Price) and interesting article, Tech Is Too Cheap to Meter: It’s Time to Manage for Abundance, Not Scarcity. Anderson points out that the price of computer processing, bandwidth, and hard-drive storage have dropped, and continue downward, such that the effective cost of providing those services are near zero. (Indeed, the billing components are more costly than the actual services.)

When your phone company tells you that your voicemail inbox is full, that’s artificial scarcity—it costs less than a nickel to store 100 voice messages, and the average iPod could store more than 100,000 of them (voice messages are recorded at lower quality than music, so they take up less space). By forcing subscribers to spend time deleting voicemails, the phone companies were saving a little on storage costs by spending a lot of consumer time. They managed the scarcity they could measure (storage) but neglected to manage a much more critical scarcity (customer goodwill). No wonder phone companies are second only to cable TV companies in “most hated” rankings.

What does this mean? Tech is really about opportunity and access, not the pipe we are limited to use. Our current national debate about broadband is about the screwdriver, not what that tool will allow us to create. That’s a significant difference. This is a debate about existing telecom and cable providers managing scarcity, as opposed to giving us access to manage our own abundance.

Life, Network, Policy abundance, broadband, Internet, Policy, scarcity, SOHO nets

The FCC recently posted a Notice of Inquiry, FCC-09-51. The purpose of this NOI is stated in the Introduction, which begins:

This Notice of Inquiry seeks comment to inform the development of a national broadband plan for our country. Its focus is to enable the build-out and utilization of high-speed broadband infrastructure. But “infrastructure” barely hints at the importance of what we are undertaking. High-speed ubiquitous broadband can help to restore America’s economic well-being and open the doors of opportunity for more Americans, no matter who they are, where they live, or the particular circumstances of their lives. It is technology that intersects with just about every great challenge facing our nation.

I signed and support this Comment in response to the NOI. The comment points out that (1) the term “broadband” is not the same as the Internet, (2) broadband’s true value is that it gives access to the Internet, and therefore (3) when designing a National broadband policy, we should make sure that it supports the value of the Internet.

Network, Policy broadband, Comment, definitions, infrastructure, Internet, national broadband plan, Net Neutrality, Network, NOI, Policy

ProPublica’s story Rural Broadband Stimulus Program Slammed in Gov’t Report points out that connecting rural areas continues to be problematic.

The Rural Utilities Service’s broadband program faced heavy criticism in 2005 when auditors found irregularities (PDF) with a quarter of the funds the program had received in its first four years of operation. In one case, the program loaned $45 million to wire affluent subdivisions in the Houston suburbs—including one that was built around a golf course and another outside one of the richest cities in Texas.
…

“We remain concerned with RUS’ current direction of the broadband program, particularly as they receive greater funding under the American Recovery and Reinvestment Act,” Assistant Inspector General Robert W. Young wrote. “RUS’ broadband program may not meet the Recovery Act’s objective of awarding funds to projects that provide service to the most rural residents that do not have access to broadband service.”

No surprise there. Projects want to go where the easy money is, and “rural” (less than 20,000 people) mean that there are problems inherent in the build-out (not enough people to be “profitable” in the incumbent duopoly sense, and/or trees and mountains getting in the way, for example).

Profitability, however, is not the appropriate perspective or framework. The government is making funds available so that the benefits of broadband reach more of the nation’s citizens. As Sean McLaughlin of the Times-Standard points out in his article What broadband access means to rural areas such as ours,

Representing most of the land and water resources, rural communities are essential for the well-being of our nation and interdependent with the 80 percent of our population that live in non-rural communities. At the same time, remoteness and isolation challenge rural people who are more likely to be poor, undereducated and unhealthy. Of the 250 poorest counties in the United States, 244 are rural. So the promise and opportunity of new communications technologies to improve health, education and public safety for rural communities are particularly important to our nation.

It’s not for lack of desire or hard-working people in rural areas that will help make this happen. Rather it seems to be a lack of imagination on the part of broadband suppliers. Creative partnerships are out there.

Network, Policy broadband, federal assistance, public good, rural, Rural Broadband Stimulus Program

This is the fourth and final day of my coverage of this conference. The information for this morning (today) is here.

The first session this morning is on Policy. Walda Roseman is moderator for speakers Rob Frieden, Heather Hudson, Francis Pereira, and Laura Sherman.

Walda Roseman: Broadband Mobility: Matching Promise with Performance in Asia

Wireless and mobile platforms in delivery of broadband.

Promise in this region: all Asian citizens will have access by 2015, mobile and wireless platforms and advanced user devices will provide access to a full range of services in next few years, and medium and low income countries (wireless is access to info and services) will be able to share in benefits. No commonly accepted definition of what broadband is; working definition is whether or not wireless access on fully loaded system can support services comparable to ADSL.

Asia-Pacific Broadband Opportunity and challenge: Asia has “a yawning broadband divide” with half of economies having highest penetration, many least served areas are also Asian. ITU chart: highest income economies have access, 31 lower income countries with low or no access.

Observations: most systems cannot maintain broadband speeds when network is fully loaded. Usage of mobile systems varies. Much of data needs are being served on mobile platforms.

Is Asia ready? short answer: no, maybe not for a long time. Nationwide, service is out of reach, quality of service is low.

Government policy as driver of mobile broadband: first step is strong political and regulator will, legal framework, and responsiveness by government to market needs and expectations. Foremost is partnership between government and industry. Need to promote quality of service, availability of spectrum, equipment, and global interoperability.

Problems: Asia falls way short of meeting needs, gov support is required.

Heather Hudson: Overcoming the Challenges of Isolation (Small Islands)

Quote from last August indicating complete drop of access. Region is highly diverse, has severe challenges because of isolation and small populations. (Also includes landlocked countries who depend on transport thru another country.) Most areas have low and lower middle income countries.

Importance: disaster communications, imports, experts, tourism, distance learning, development of back offices for information work. Example: Bits for Borneo: broadband in the jungle, diversifying gross national happiness, University of SOuth Pacific for distance education.

Regulatory policies: most have competition in mobile, few in fixed line. Trends to better devices. Mobile growing: more than 60% of phone subscribers in some areas, competition in some areas, prices higher than average.

Bad news: Internet access is limited in speed, less than 3 subscribers per 100 people, some countries <1 in 200. Availability of broadband: price high (150% of gross national income, in wealthier countries: 2%. of GNI). Monthly use prices also very high (in relative GNI and absolute $ terms).

International connectivity: generally getting cheaper, most islands served by satellite, high transit rates and tarriff proxies (e.g., Skype-out: over $1 per min, compared to $.02 to Singapore and Hong Kong).

Strategies to bridge the connectivity gaps: increase competition, recognize demand, limit periods of exclusivity, extend access through resale, and reduce local barriers. Think about community access as first priority. Universal service funds must be open to all providers. Perhaps a universal (targetted?) broadband fund for Pacific Islands?

Rob Frieden: The Spin in Broadband Statistics: How the FCC makes False Assessments of Next Gen Network Deployment in the US

Check the book.

Absent market failure, should govs stimulate broadband investment, subsidize service, or become a carrier? FCC (for a number of reasons) hasn’t really been telling the truth in terms of broadband penetration. In policy process, may be incentive to skew. “Incentivize” is common term. National goal for broadband, “mission accomplished.” $7B subsidiary to incumbents, delivery poor or non-existent to certain areas. FCC statistics say we’re doing great, based on 200k bits/sec definition. Penetration goes to 77% of all zip codes, with 4 or more broadband choices. FCC tells us (by zip) by numerical figure in internal charts (considered “trade secrets” which are confidential). However, wireless carriers don’t claim the trade secret exemption and willingly disclose coverage maps.

US ranks 15th among OECD nations in household penetration. Lags most nations on basis of per capita.

Whose statistics are most credible? State department was outraged at cooked books. Most options don’t exceed 200 kbps, but FCC shows increase in coverage.

Case study: Port Matilda PA. Current strategies and statistics not working. Erates have achieved modest goals, wi-fi mixed, incumbent has right of first refusal (not optimal).

Need to use better statistics, adopt best practices (other nations).

Francis Pereira: The Effectiveness of Government Policies in Broadband Deployment: An Assessment of Select Asian Countries

Broadband penetration and adoption rates vary across countries (globally). Various plans for ubiquitous, ultra high speed, or advanced ICT apps and services deployments (diff countries use diff strategies).

Sinapore’s gov initiatives: TradeNet, One Broadband Network incentives to conduct e-commerce, GeBiz (gov site), and iN2015. Singapore and Hong Kong (TradeLink) chart, different priorities and reasons for services. Singapore’s TradeNet iniative processed 99% of all trade declarations w 2400 companies, reduced processing time, etc.

Korea’s eVision: knowledge government priority. General challenges: no definition of impacts, statistical approaches, to attribution, nature of ICT.

Some evidence for hourly compensation for production costs in manufacturing, inward FDI stock as % of GDP (chart), and employment, total assets and other measurements. Singapore: 95% of biz obtained info did so electronically at least once in last year. 94% transacted at least once, and 80% were satisfied w transaction. Korea: evidence of standard of living, effectiveness of policies, new methods of assessing contribution of ICT to society, and new business models for broadband deployment (funding last mile).

Laura Sherman: Advancing Broadband in Singapore: From Monopoly to Competition

Represents Iridium Satellite LLC (disclosure). Will use Singapore as model. Statistics: 1997 monopoly wireless, now different. Sector reform process: restructuring and limited competition: First phase (’92-’94): separated regulator and operations. Second phase (95-98): duopoly in mobile, ended Singtel’s monopoly, added a third mobile license.

Facilities-based and WTO commitments, less limitations. Dramatic changes between 1999 and 2003, changed regulation process, now unlimited competition allowed (over 50 present in fixed and mobile). Connectivity is the impetus in driving growth.

Current Code of Practice for competition: looks at true competition, will deregulate as market changes. Facilitated thru tech-neutral licensing, nominal fees, no foreign ownership limits.

New regulatory phase, five year plan. Lessons learned: connectivity is key, limited political interference, transparent reg process, competition at all levels of value chain, tech-neutral licensing and fees.

Question: definition of broadband based on speed delivered (esp in light of deep packet and other internal routing processes)? Rob: Yes, extent for carriers to throttle and other network neutralities is second level of process, first is transparency of process and fact finding, statistics compilation. Gov should require parity between promised and delivered bit rates. Heather: pricing models haven’t moved, is another important metric. Also Canada as example: some countries have done better at serving remote areas (Canada is good!) Walda: also some countries are better at measuring throughput, dropped calls, sound quality, data… especially compared to what’s advertised.

Q (speaker from Nepal): concentration on all countries not equal.

Q (from island representative): comment about undue bias in competition: does not work in rural areas. In New Zealand and Australia, 5-10% unserved, but Islands 80% unserved. Way to go forward: define universal service development and how we pay for it. Another person disagrees: way to facilitate is thru new operators.

Quote from FCC outgoing chair warns of excessive intervention (see article from FT.com). Heather: voice service is important, competition is coming to mobile if (?) is willing to pay. Community level access in some levels might be appropriate. Laura: Malaysia throws a lot of money at connectivity but has huge licensing fees. Rob: agrees to a point with outgoing FCC Chair, but his FCC overstated and prevented competition, boxed in facilities to incumbent services.

Q: how to pay for terminal, tech support, etc? Rob: eRate top heavy (wiring), (no?) support for digital literacy. Heather: competitive subsidy system for schools in US. Need to operationalize it to serve operational, health and other services. Francis: re: who’s going to pay – what are advantages? Islands have special zones for access to certain people, is growth area. Strategic areas served first: build to rural areas vs building new hospital. Society pays because of net return on investment. Walda: India’s software zones.

Q: re lack of transparency and gaming aspects that to be considered in Austral-Asia, Is there a role for US or other that can model universal service? Walda: yes, it is being looked at for policy and operational levels, share best practices, Africa is where it is most effectively being done. Heather: liberalization is not same as deregulation. Need to set rules of the game. Enforcement in many countries is difficult for various reasons. Additionally: quality of service is critical, not enough attention to monitoring. What about a sub-regional approach? Look at EcTel (?). Laura isn’t sure it’s working. Objective isn’t being met. Walda: Quality of service: she wouldn’t blame anybody right now, first push is expansion, only after that has succeeded should one question quality.

Events, Network, Policy Asia, broadband, FCC, Pacific Islands, PTC09, satellite

Next session: The Future of Broadband Mobility. Ken Zita (KZ) moderates with speakers Jen-Hon Lin (JHL), Sachio Semmoto (SS), Yoshiyuki Takeda (YT), and Michael Tyler (MT).

Ken Zita:

How about let’s talk about 4G? Broadband mobility is where the future is going. Mobile phones are everywhere. This is about the fast change that affects the social fabric of the world.

The arrival of very high speed and all-IP mobile networks is imminent. “4G” will transform markets and mobile services paradigm worldwide. Ultrabroadband: 160-250MB/s down and 50MB/s up, commercial 2H09.

Impact of broadband on mobile business strategy? remains tied to legacy bandwidth economics” and is relatively untouched by economics of the Internet: switched to packet (open), shift to IP allows service creation of content service independent of access network. Gateways for media downloads vs mere transporters of bits (diff business models).

How will mobile biz models evolve with broadband? On-demand video, P2P, user-generated content and application downloads will displace basic access services (voice) for new revenue growth. Emerging financial models have more moving parts, less revenue certainty (ad hoc revenue events, on-demand content, connectivity, commissions and revenue sharing). Timing the transition of revenue is important. No “net neutrality” for mobile today.

Who owns what? How will network/device/content/brand/web storefronts evolve as mobile experience? Can mobile operators preserve closed ecosystem? Apple, Nokia, Google on integrated, vertical services. Mobile content without networks, who will build the next Apple store?

Search: speed to the handset is exciting but mobile search needs to evolve too. What is required to crate “meaningful” mobile search and net-centric mobile customers? Today, search is a drag. Contextualize with geography and who you are.

Operational challenges: service delivery involves controlling content thru middleware, or finding a way to stay relevant as consumers download content from off-network sites. Technology (networks, layers, content). Video hits local mobile network.

Can Asian mobile SPs globalize? North Asia is streets ahead of the rest of the world in mobile adoption, but past attempts by Japanese and Korean operators have failed. Big difference: mobile content strategies (opening up services), platform for delivering lifestyle services and knowledge uniquely appropriate to local market. Does network scale have a natural or optimal limit re: services that involve local market knowledge and customization?

What does it mean to create a “mobile Internet?”

YK: Widening world of mobile phones (various data types). DoCoMo’s challenge: communication to info access, life assistance, behavior assistance (personalization of services). Number of mobile phone subscribers growing, Mar ’08 is 102.72M. Ratio of 3G (chart w many countries) is high in Japan.

Frequency chart re: spectrum assignment, present and future (FDD (700-2GHz) and TDD (2-2.5GHz) systems. Devices and Mobile communication systems (illustration). Technology and market trends in Japan all trending higher in all bands, from fixed network services to LTE/Super3G and 4G. Deployment in layers over time, to ultimate status of Super 3G and 4G after 2020.

Trends of Next Gen Systems adopted by Carriers (chart). Change in business models of mobile from vertical integration to open systems (Android, G1 and iPhone, etc.)

JHL: Taiwan mobile market overview: 25.28M mobile users in Nov 2008, penetration 109.8%. Mobile revenue si 59.26% of total telecom market in 2007. Private telecom co, mible WiMax in 2007. Is a full service provider, 97% market share in fixed, mobile 35.5%.

Performance: Netbooks 99% market share, 93% Notebooks and motherboards (chart). Trends and opportunities: fiber to home, LTE/WiMax (converging).

Business model is key: connect to anyone at any time, any place, any devices; ubiquitous network society. Value of networks is proportional to number of subscribers. How could operators realize such value?

SS: The Future of Broadband Mobility

From 10 years ago: fixed broadband. Formed a company then, now sold and doing something else. Now: mobile operator mainly focus on broadband data service (estab. Jan 2005, two directors, lots of outside directors, 3K employees, $4B raised in financing). Now has >1M subscribers. Is different from incumbents: they are mobile company with voice service; his company is mobile broadband service.

Unique biz model: data centric strategy, unique netbook bundling marketing, mobile and fixed bundled service. Efficient network with low running cost, is price leader in mobile broadband service. Not stealing subscribers from incumbents: not stealing voice services, is all data, trending upward.

In PC market, we have created a new demand, “bundled sales of data card and net book.” “Special discounted price: $1-$200 US.” (Net books: ASUS, Acer, Dell, HP, Sony, Toshiba.) Targeting new users by clearly differentiating mobile phones and data. (chart with speed, monthly charge and other: fast speed with low monthly charge.) This is the key.

MT: Four Trends, Fundamental Change (no PowerPoint)

1. Big change in capability of mobile devices. Now powerful processors, versatile radio freq interface that can connect to variety of networks, including phone and data, also makes device mfgrs strategic players.

2. Network layer structure that’s visible to outside world. Implications: service creation not tied to circuit-switched network, or network fabric. Carriers that don’t merely want to carry bits will become app provicers; value on app platforms and tools, resources and tools that can be used.

3. Increasing role of downloading. Mobiles are looking more like the Internet. End-user chooses and uses devices and apps.

4. Emergency of boundary management: boundary between network operator management and outside world, open boundaries. Closed worlds not being successful commercially. Operator has resources at diff layers, other important apps: strong authentication services (to prevent theft of services).

Examples: Eqo (Vancouver) takes over phone book, does dialing via IP network; also provides IM function that is compatible with all major messaging systems.

Devices, Events, Identity, Network, Scenarios broadband, Devices, hand held, handhelds, mobile, mobile phone, net book, platform, PTC09

Getting Started

Here’s the description of this morning’s workshop. Amusing for such a big telecom conference, the special conference wireless network doesn’t extend into the session rooms. I’m using the Hilton Hawaiian Village (hotel site) wireless network. This isn’t a problem, just an observation.

This is the 31st year of the conference. Most of the guys are slowly filing in, shaking hands and smiling. Nice to be in Hawaii in January, where the temperature at 9am is a cool 60 degrees outside (the coolest it’s been lately!). We’re about to start.

Introduction

Speakers first up: Alan Mauldin (AM), Kent Bressie (KB) and Keith Schofield (KS). John Hibbard (JH) is moderating.

AM: Demand Environment Snapshot

Capacity demand is high (video, P2P), increasing quality. Web is 45% of traffic, P2P is 25%, email 6% (suspecting this includes spam). Increased adoption of high-banbdwidth broadband (mostly DSL?). Extreme traffic growth in developing countries, still strong in developed countries (S Asia, Middle East, Latin America all nearing 94-100+% per year).

Global backbone providers expanding capacity (tripled in last 2 yrs). Subsea capacity also growing, esp trans-atlantic, less so trans-pacific et al. Potential capacity exists: transatlantic, trans-pacific, Intra-asia. Upgrades not enough, new required because: potential capacity dwindling on some routes, cable faults show need for redundancy, some regions still lacking cables, new and emerging markets (data centers, oil/gas industry). Continuous investment is needed.

KB: Unwritten Rules: Developmetns in US Nat’l Security Regs of Undersea Cable Systems

US-centric but influential in global market. US Gov has: begun imposing security agreements on international undersea cable systems & adopted new infrastructure protection provisions; requested (Homeland security) info re equipment deployment and contract for maintenance & security, and

Most requirements have not been promulgated in regulations or public guidance/feedback, some regs seem designed to avoid public/legal scrutiny. They differ from national security pgms and complicate procedures by operators.

Team Telecom: DOJ, DOD and DHS. This team scrutinizes national security and law enforcement aspects of apps filed with the FCC. Results in security agreements, which for undersea cable DHS took the lead (esp Amer Samoa and Hawaii). DHS most conservative, most likely to require burdensome aspects on increasing number and type of systems. Also Team Telecom (DHS in lead) expanded scope of national security reviews to include infrastructure (who’s doing what on which systems, advance written notice for mods to list of contracts for maintenance and security). Reason: DHS is concerned about industry “evolving” and “globalizing”, esp wrt Chinese equipment manufacturers and service suppliers, all agencies concerned with terrorist attacks and unauthorized access.

BH notes that review doesn’t necessarily take more or less time to complete, depends on several factors (preparedness, only dealing with DHS vs other agencies). General processing for recent Pacific systems: 200-322+ days from application to licensing. (FCC noted as not generally the source of delay.)

Second big point: DHS info collection from Existing Underseas Cable: extensive operational info requested (all systems regardless of ownership, international and domestic). Requests included lots of info re NOC (Network Ops Centers), upgrades. Concerns were landing points in US for terrorists/unauthorized attacks.

Third big point (development): FCC-OSTP Reporting requirements for all undersea cable systems serving the US. Mandatory for new systems, assumption that info was actually known to operators was false. Info req’d: routing requrements, maintenance schedules, infrastructure protection, OSTP wanted direct access to info including re cable cuts and earthquake affects.

Operators struggled with trying to define and interpret rules, when flooded w info there’s classic intelligence problem, also commercially sensitive info.

Speculating in 2009: possible changes for security agreements, approved/prohibited vendor/contractor lists? FCC opposition to lengthy Team Telecom reviews, regs governing TT reviews and security agreements, less powerful DHS?

KS: SubOptic Interim Activities Working Group Inspiring Competition and Collaboration

Construction contracts and operators have been reinventing wheel, KS calls for cross-industry support, guidelines and contract framework to promote best practice, preserve international multi-billion dollar submarine cable industry competitiveness and competition. Current doc for contract formation is 150 pages. Working NOT to specify exact values for negotiated terms, force buyers and sellers to be uncompetitive…

Contract draft produced and guidelines in preparation. Carriers, suppliers, legal experts, consultants, industry professionals involved. Plan: integration of draft & guidelines, peer review, publish draft. Competitive framework, bidding & negotiation, clarity of terminology, improve state of industry. Site: suboptic.org.

Questions:

Changes in the future? RIAA, US pirating may have an impact. Industry adaptable, intra-industry collaboration, FCC ongoing proceedings and fees, coastal zone management act, asia-pacific region: developments with continental shelves and law of sea conventions claims (due to be filed, will extend claims of jurisdiction).

What info is available? Security agreements are public, on FCC website (hard to find, see supplementary apps). DHS info collection re equipment and contracts all exempt from FOIA requests.

Illegal file sharing – impact on industry? Traffic going down, if traffic routed to legal means, little impact. If international, could have small or significant impact.

Licensing and permitting process complicated at state and local levels, not federal level. What’s up with that? Short answer: didn’t have enough time to explain in this setting. Environmental permitting is very complicated in US and out to sea for 3 nautical miles, 12+ in some cases. Can be very time consuming. Concerns with FCC new coastal management rules likely to complicate environmental rules. Working toward resolution.

Fees? Consensus doc submitted to FCC for system-based fees instead of capacity-based fees.

Nepal as telecom hub between China and India? Best answered by studying traffic between those two points, also if opportunity to process between those two points.

Standard Contractor Terms and Conditions: governing law preference? Team has three lawyers, working draft based on English law at the moment, is template for guidelines.

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Next session: Interview with Sunil (Neil) Tagare (NT)

Project Oxygen was his project, sold. Interim 8 years, worked with VC and moved to Silicon Valley, moved back and developed Facebook-like app for India. Now working with VC ventures that focuses on buying-selling bandwidth.

What went wrong with Project Oxygen? All pain points still exist today. Industry is booming, but industry is extremely inefficient. Certain segments have lots, other have little capacity. Swapping got bad name, but can be tool to increase efficiency. This is especially relevant to small developing countries.

Other lessons? Launching today: any carrier can go and draw (via map) from from cable types and locations. Virtualization scheme: data centers are part of industry, technology needed to allow buying/selling of data center space.

What might you have done differently? Concept of Oxygen, should have been successful because he looked at entire network as opposed to one cable at a time.

To solve the problems of industry is through technology, not cables and force.

Break!

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Next session: Technology Developments

Speakers: Brett Worrall (BW), Peter Loko (PL), John Hibbard again moderating. Later: John Marson (JM) and Robert Maloney (RM), Pat Bustamante (PB) and Virginie Frouin (VF).

BW: OADM BUs and Applications

OADM BU is *? Branching Unit.

Why use one: In-service addition of new landing points, thin alternative to full fiber drop, single fiber pair that protects express traffic, optical separation between end-to-end and spur to spur traffic, ability to configure behavior of the BU when spur is installed.

OADM Broadband BU (station A to Spur traffic only): combo splitter and coupler, copy of signal goes off then couples back. Using spectral slots for each direction.

Broadband OADM vs full fiber drop BU: 96 wavelengths between stations, every segment has 100% capacity, good where hi cap reqd between adjacent landings (Full fiber drop).

Full fiber drop: all traffic is routed in and out of branches, not most efficient for express. Broadband BU: copies of traffic down trunk to spurs, through traffic is independent of trunk, only need capacity for traffic to spur. All branches see all trunk traffic, option for short end diversity via restoration path.

Implementation: full fiber is easy to design, all branches should be bulit from outset. Broadband OADM BU is more complex to design, need to consider max add/drop capacity in advance, actual add/drop capacity depends on system performance (power budget), branches can be added later without interrupting traffic.

OADM: Bland Block BU (spectral burning of slots, hasn’t actually been implemented yet)

OADM Fixed Filter Design: branch band pass filters (fixed allocation for spectrum allocation)

An idea of Universal BU? PPC01 has two universal OADM BUs to allow future flexibility in BU configuration for the landings at Port Moresby and Brisbane. Can be confgured later by picking up an intermediate joing that will configure the BUY to be either full fiber or broadband or band block. (Followed by happy/sad face comparison chart for sectral efficiency, power budget, security of traffic, cost)

Technology provides network owners enormous flexibility in configuring their networks vs FF drop.

PL: Pipe Pacific Cable (PPC-1) System

Involvement: 1 x 10G Madang PNG to Guan, same to Sydney; 2 FP spur link, 2 BU… also microwave connection, radio link from Port Moseby north to Sydney.

Benefits of Madang Spur: backup int’l link for APNG2, direct access north of PNG, Int’l service for major industries (local industry boom!) and real-time internet broadband services for edu institutions at Madang, etc.

Opportunities: high quality access to PNG, TPNG is keen to promote its use to develop country (esp natural resources), capacity is available for sale.

JM: Migration to Resilient (Mesh) OTN-Based Submarine Networks

Challenges to Submarine Network Operators: flexibility, adaptability, manageability, assured, time to market. Flexibility: end-to-end over terrestrial and submarine, wholesale and direct to global enterprise. Adaptability: new services, service topology, network transition. Manageability: deterministic performance, application transparency. Assured: survivability, secure networks. Time to market: on-demand bandwidth, monetize capacity.

Programmable Optical Mesh Net: benefit to monetize network capacity. Challenge: reduce cost of build, control operational costs.

Summary: OTN-based programmable (control plane) optical mesh architecture: intelligence for port to connection to network (scales well), high degree of automation, transparency, resilient architecture. Service driven architecture model for converged infrastructure: tight coupling of service and OTN data planes, migration path to deterministic packet-aware transport. Effective model to monetize expensive submarine capacity.

RM: Coops, Collos and Condos (Alternative Cable Landing Arrangements)

Why mess with the model? New players, new motivations, perceptions and expectations; new economics and public policies, permitting nightmares, and because we can. New players: small carriers, internet search firms, content distribution companies, real estate developers and investment bankers. (Old PTT will be around a long time but may be eclipsed in the future.) New expectations: all-in-one solution, carrier neutrality & backhaul, near build cost buy-in opportunities, fee simple asset ownership option. Economics and public policy: perpetuating regional crossroads status (esp HI), generation (research, higher ed, advanced tech development), counter out-migration and expand tax base w high tech job creation, re-tooling Pacific island economies (visa controversy in US, quotas and exemptions). Permitting: nightmares about money, timelines NIMBY, more money.

Because we can? In Hawaii, we have community support, willing landowners and developers and investors, enterprise zoning economic development status, abundant qualified workforce, econ access and easy integration of alternative energy sources, suitable diverse route terrestrial interconnection network solutions. Lots of collaborative opportunity with existing tech here.

PB: Collaboration for Change

PLNI (Pacific LightNet Inc) has 550 miles of submarine and terrestrial fiber, connects to all six major islands, including air traffic control in this part of the world. Collocates and collaborates with Tier 1 service providers.

Now we’re talking bandwidth, originally for military use and UH college system. Aloha.com and Aloha.net were first Hawaii ISPs (1994). HI Internet Exhange (HIX): project partially funded by UH, purpose to allow IP networks in HI to inter-communicate wout sending traffic through mainland. Network operates independently of all other networks. DR Fortress. Tier 1 providers: Qwest, AT&T, Sprint, Verizon Business (UUNet, Worldcom). Tier 1-2 interconnection points in Hawaii: all 6 islands, 3 islands have multiple points.

VF: SPIN (Southern Pacific Islands Network

In 2008, most worldwide submarine cable doesn’t touch south pacific. Main south to north: AJC, Southern Cross, Telstra. Pacific Islands of PNG, Fiji, Guam currently connected. SPIN is initiative to provide faster and cheaper bandwidth to Pacific Islands, esp French territories (New Caledonia, Wallis and Futuna, French Polynesia). Impacts: reduce bandwidth charges, lower prices and better access, and for international telcos and ISPs: new route.

SPIN: 3 step project. Step 1: New Caledonia cable: Sydney to Noumea (connected since Sept. ’08). Step 2: French Polynesia cable, from Tahiti to Hawaii (Apr ’10). Step 3: SPIN cable: Noumea to Tahiti, connecting many islands along the way (by end of Dec ’10).

Who is SPIN? Limited company, private investors (55%), public investors (French territories). Approx cost of SPIN: Euro 150M (French supported, bank financing, shareholders, investment and cap agreements).

Questions:

Tax Act 221 (to Pat and Robert)? Both do not receive direct benefits but both supports Act 221 based on clients and customers needs and use.

What has changed–Islands suddenly can justify collaboration? SPIN: part is that it is French government-supported project and desire to help Pacific Islands connect.

Full fiber drop for each of the countries? Two architectures, one fiber pair for express, other full fiber drop between countries. Other: Single fiber pair, still discussing options.

Collin, Program Chair for SubOptic 2010 conference, info available downstairs.

Lunch!

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