ecorridors: Designing and Implementing a Fiber Optic Infrastructure to Enhance Competitiveness of Rural Virginia
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1 ecorridors: Designing and Implementing a Fiber Optic Infrastructure to Enhance Competitiveness of Rural
2 "Who will pave my information super-driveway?" - Zigurd Mednieks
3 ecorridors How to move to the next plane. A research and outreach program at responding to requests from communities for help in overcoming obstacles to competing in the network economy. Strategy Work with communities to assess needs, sort out obstacles (regulatory, political, market structure, technological), plan strategy. Work with public and private sector players to coordinate efforts, maximize returns on investments, incent entrepreneurship and private sector leadership, develop viable long term financial and technical strategies, attack obstacles.
4 ecorridors Goal Level the playing field for disadvantaged communities in access to the most advanced next generation communications and internet services Role Develop strategies for attacking the fundamental obstacles and barriers to entry for access to low cost, essential advanced network services Access to Next Generation Internet Gateways Inter-community Next Generation Optical Links Inter-regional Optical Backbone Links to Tier 1 Network Access Points
5 Predicting the Future is Difficult 1989/1990 Mr. Blythe (VP Information Systems at ), what on earth would a person who is not a faculty researcher do on NSFnet? 1981 Bill Gates (Microsoft CEO): Nobody will ever need more than 640K of RAM (in 1996 Windows 95 required at least 8000K of RAM to operate)
6 Historical Boom/Bust Cycles
7 Network Deployments in Korea and Japan Broadband connections 66% in Korea at 3Mbps 15% in U.S. 40% in Japan (up to 12Mbps by EOY 03) Broadband cost $40 in US $18 - $25 in Japan, Korea Korea to spend $11B to deliver 20Mbps to 90% of households by 2005 Japan has goal of connecting every home with 100Mbps by 2010 Source: April Forbes Magazine
8 Blacksburg Electronic Village (BEV) Highest per capita use of Internet in the world 87% of residents are online 60% use broadband Highest per capita availability of ISPs in the world Greater than a dozen providers Highest business use of Internet of any community More than 75% of Blacksburg businesses are using the Internet for commerce and advertising
9 Producer Network Traditional telecommunications networks have focused exclusively on the consumer network, in which users merely consume information, not produce content or services. The E-corridors concept is focused on the vision that every consumer has the potential to become a producer of information services on the commodity Internet. Following are some examples of network producers.
10 Examples of Network Producers
11 Tobacco Commission Project Focus s Tobacco Indemnification and Community Revitalization Commission asked ecorridors to develop a technical architecture and comprehensive plan for the development of advanced network infrastructure encompassing the entire tobacco growing region and to focus primarily upon deployment of large scale communication network infrastructure based on leading edge technologies that can radically alter the economics, types and levels of communications services. The Commission will be investing ~$100 million over 10 years, and requires a roadmap for that investment.
12 Project Focus (cont d) The resulting studies make a compelling case that such a network infrastructure can be developed based on solid, proven technology available today. It also develops the business case side of this issue, identifying or synthesizing cost minimizing tactics and identifying current and potential revenue sources for advanced network services that could anchor a major deployment within the tobacco growing regions. An objective is to stimulate private sector participation and competitiveness.
13 ecorridors Tobacco Commission Study Tobacco indemnification funds applied to infrastructure to promote economic revitalization. VT asked to prepare a roadmap for investment. TC as World Bank model. $100 million in patient money. Major report was released in April Rationale, Regulatory and Policy Issues Fiber Optic Infrastructure Design complete, intra-regional backbone and intra-community systems for entire region. Specifications, maps, design. Financial analysis and investment rationale Major sections on related issues: extending links to tier ones, creating a high tech grid crossroads, workforce development, education, public health, community development, last mile technologies.
14 Strategic nology Infrastructure for Regional Competitiveness in the Network Economy 11 Volumes, 1,393 pages 60 network and IT professionals from VT Over 40 private sector company representatives 6 months to complete Expertise included Vice President of Information nology, Director of Advanced Network Services, Director of Network (statewide broadband production network serving over 1000 sites)
15 s ecorridors Program Announces Strategic nology Infrastructure for Regional Competitiveness in the Network Economy A series of in-depth studies providing a roadmap for revitalization through investment in advanced network infrastructure. Volume 1 Volume 2 Volume 3 Volume 4 Volume 5 Volume 6 Volume 7 Volumes 8-11 Rationale, Environment and Strategic Considerations. Connecting the Regional Infrastructure to National and International Networks A Fiber Optic Infrastructure Design for Southside and Southwest Fiber Optic Infrastructure Design Guide Financial Feasibility and Investment Rationale Leveraging Advanced Optical and Ethernet nologies Speculative and Alternative nologies Community, Demographics, Applications and Anchor Tenants A University Putting Knowledge to Work
16 Report Rationale Difficult for telecom industry to justify business case for deployment of advanced communications Most network providers do not want to provide services to allow users to become producers Telecom players will continue to focus on top 30 metropolitan areas Current stopgap measures are not sufficient to provide leapfrog advantage
17 Major Goals & Objectives Be a catalyst for telecom deployment the current telecom providers are focused on top-30 markets and can not afford to deploy new infrastructure for low profitmargin markets in the near future Enable sustainable economic development for the region Create cooperation between counties/cities the value of the network is a function of who you are connected to Law of Network Effects
18 Major Goals & Objectives (Cont.) Maintain a leading edge, future-proof network Enable anyone to be a producer, not just a consumer Leapfrog current technology (i.e. not just DSL and Cable Modems) The volumes are a framework that communities can use either as a reference or as a cookbook Demystification of the technology optical fiber is not as complicated as it seems
19 Aggregate Demand Through Anchor Tenants Municipal Governments (42 counties and cities) Higher Education and Research Health care organizations, corrections facilities, law enforcement, on-line retailers, and research communities inside and outside the region Existing business and industry
20 Role for Private Sector Take the lead to stimulate s appetite for bandwidth Develop new and creative uses for broadband and provide those enhanced services over the infrastructure; also back-office services Extend broadband s reach to underserved markets Work with developers to attract large, bandwidth-intensive businesses
21 Design Considerations Standards for Compatibility and Reliability Sources for useful practical design information Type of fiber to be used Transmission capacity of the fiber Number of fibers needed Cable construction required Major sources of materials Planning, design and management tools that should be used What sources of census and demographic information should be used?
22 Traditional Alternative: e58 Corridor? Requirements for Advanced Communications Infrastructure Development Fiber along route 58 east to west with access nodes to north-south fiber. Ease permitting, right of way, regulatory obstacles. Public-private partnership. Must leverage community infrastructure projects. Potential to develop carrier hotel and cable landing sites. Multi-Use Fiber Access Research Networks E-58 Economic Development Commercial Lease / IRU Cable Landing Research Node / Carrier Hotel North South Fiber Route Interconnect Points Community Access Nodes 22
23 Emerging Alternative: Geodesic Network Mesh County X County Y County Z
24 e Corridors Tobacco Area Network Backbone Conceptual Representation * To Columbus/Chicago To D.C. To Richmond To Norfolk To Knoxville/ ORNL To Greensboro/Charlotte/Atlanta To Raleigh/RTP * Actual routes pending detailed analysis.
25 A Crossroads for High Economic and Workforce Development University of Commonwealth University Tobacco Growing Region High Crossroads Fiber Infrastructure Old Dominion University Oak Ridge National Laboratory MCNC UNC Duke RTP NC State
26 Inter-County/City Dark Fiber Build-out Detail 1700 fiber miles 102,000 strand miles $26,762 per mile Design assumed 50% aerial & 50% direct buried Routes through 14 additional jurisdictions outside the regions as a means of adding anchor tenants Does not include the cost of electronics to light the fiber because those are highly variable and should be determined by the users/communities
27 Political Representation: Geodesic Network Mesh = County Seats = City All incorporated jurisdictions along final chosen routes will be connected.
28 Intra-County/City Dark Fiber Build-out Detail 260 fiber segments 3,400 fiber miles, 201,600 strand miles 197 access hubs Build-out cost: $100M $29,600 per mile Assumes 50% aerial and 50% direct buried 45,000 poles required 1,680 miles of aerial fiber
29 Policy Recommendations Rights of Ways: drive cost for access to ROW to near zero Encourage VDOT to partner with the Tobacco Commission-endorsed entities Allow State facilities to acquire services and infrastructure from the project without being subject to state procurement requirements Tax Credits: Create incentives for investment in broadband infrastructure (like tax credits) Statewide Participation: Enable non-tobacco region counties to opt in to the benefits and policies implemented
30 Asset Based Telecommunications Return of Investment rather than Return on Investment View telecommunications as a marketable asset, rather than a service Similar to the rural electrification projects of the 30 s, customers pay for the upfront costs of a fiber build Users control and manage the resources unlike legacy telecom that controls both content and transport Reasonable expectation that money will be earned back
31 Business Model Assumptions Plan assumes on-going operations, administration, provisioning and marketing costs are recovered as a portion of the rates established for use of the dark fiber Reinvestment of funds is critical to the long-term value of the infrastructure and the continued economic growth for the regions Market demand should drive the build-out plan Relatively small annual participation fee to ensure longterm political support and community buy-in
32 Financial Summary Total project construction cost: $145M Funding sources for construction Tobacco Commission Funding, $110M Reinvestment of Prior Year s Net, $12M Securing additional outside funding, $22.5M Financial model self-sustaining Model projects a net of $89M at end of 30 years and after operating costs $290M would go into the economies of the regions Construction $145M Operation $145M of the Geodesic Mesh Network
33 s Conclusions New emerging technologies are accelerating the rate at which high capacity bandwidth is becoming a necessity (for bioinformatics, healthcare, and all research activities); however, the types of high bandwidth connections necessary are currently not available in the tobacco regions at ANY price. The traditional telecommunications industry will not build advanced communications infrastructure in a timeframe which provides competitive advantage to the tobacco regions. The Tobacco Commission can enable advantageous access to the emerging national optical network infrastructure. The Tobacco Commission can be the catalyst that generates hundreds of millions of dollars in investment in advanced network capabilities over the next years.
34 s Recommendations Do not bypass any community in the advanced infrastructure development plan Prioritize initial deployment sequence by return OF investment (return OF investment is patient money, as opposed to return on investment which, if it were possible, the private sector would have done it already) The bulk of Tobacco Commission funds for advanced infrastructure should be invested in future proof (20-30 year life cycle) infrastructure (optical fiber) The infrastructure should be financially self-sustaining with the right combination of anchor tenants and leased IRU s
35 Recommendations (cont d) Build from the top down: Connection to strategic national interconnect points Inter-county/City fiber optic infrastructure Intra-County/City fiber optic infrastructure Intra-Community/Neighborhood Grant fund wide-area networks and last-mile demonstrations that are highly leveraged with other resources and utilize wireless or fiber to the home. Invest ~80% in backbone infrastructure; 20% in last mile demonstration projects.
36 Create an Entity Totally focused on the tobacco region Non-profit, perhaps tax-exempt Tightly controlled by local players Dark fiber development and oversight only, does not compete by offering services (however, some of the partners in the entity can provide services) Tobacco Commission controls via funding flow, performance standards monitoring, and project monitoring Lean, able to act quickly to Acquire funds Nail anchor tenants Nail municipal/county partnerships Negotiate peering agreements and IRU s Perform project oversight and quality assurance Manage contracts
37 What s Next? Tobacco Commission needs to decide ecorridors continues to assist communities that request it Wellness Village demonstration project as means of educating, incentivizing daily use of the infrastructure The infrastructure does not benefit anyone if they do not know how to integrate it into their daily lives
38 We must become the change we want to see. Mahatma Gandhi
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