CA*net 3 National Optical Internet

1. “A proposed strategy to make Canada the most networked country in the world and the first to have low cost Gigabit Internet infrastructure available to virtually all schools, hospitals, libraries and businesses by 2005”

2. CA*net 3 National Optical Internet Consortium Partners: Bell Nexxia Nortel Cisco JDS Uniphase Newbridge CA*net 3 Primary Route CA*net 3 Diverse Route GigaPOP ORAN Deploying a 4 channel CWDM Gigabit Ethernet network – 400 km Deploying a 4 channel Gigabit Ethernet transparent optical DWDM– 1500 km Condo Dark Fiber Networks connecting universities and schools Condo Fiber Network linking all universities and hospital Multiple Customer Owned Dark Fiber Networks connecting universities and schools Netera MRnet SRnet ACORN St. John’s BCnet Calgary Regina Winnipeg Charlottetown RISQ ONet Fredericton Montreal Vancouver 16 channel DWDM -8 wavelengths @OC-192 reserved for CANARIE -8 wavelengths for carrier and other customers Halifax Ottawa Seattle STAR TAP Toronto Chicago New York

3. Customer Empowered Networks • School boards and municipalities throughout North America are deploying their own dark fiber networks in partnership with next generation carrier • Individual institutions – the customers – own and control their own strands of fiber • Fiber are configured in point to point private networks; or • Connect to local ISP or carrier hotel • Low cost LAN architectures and optics are used to light the fiber • Control and management of the optics and wavelengths is under the domain of the LAN customer at the edge, as opposed to the traditional carrier in the center • These new concepts in customer empowered networking are starting in the same place as the Internet started – the university and research community. • Customers will start with dark fiber but will eventually extend further outwards with customer control and ownership of wavelengths • Extending the Internet model of autonomous peering networks to the telecom world

4. What is happening elsewhere? • California DCP project plans to connect up all schools to research and education backbone – CALren-2 • Cost $US 32 million per year next 3 years • Holland plans to connect up 12,000 schools with dark fiber • Schools will be connected to national research and education backbone – SURFnet 5 • Alberta has a major RFP to connect up 3800 public institutions in the province • Sweden plans $US 2-3 billion for connecting municipalities and rural areas • Iceland is building fiber network to all their schools which private sector will take to the home • Finland and Norway have similar plans

5. Market Drivers • First - low cost • Up to 1000% reduction over current telecom prices. 6-12 month payback • Second - LAN invades the WAN – no complex SONET or ATM required in network • Network Restoral & Protection can be done by customer using a variety of techniques such as wireless backup, or relocating servers to a multi-homed site, etc • Third - Enables new applications and services not possible with traditional telecom service providers • Relocation of servers and extending LAN to central site • Out sourcing LAN and web servers to a 3rd party because no performance impact • IP telephony in the wide area (Spokane) • HDTV video • Fourth – Allows access to new competitive low cost telecom and IT companies at carrier neutral meet me points • Much easier to out source servers, e-commerce etc to a 3rd party at a carrier neutral collocation facility

6. Schoolboard Condominium Builds

7. List of Schoolboard Fiber Builds

8. Examples of Dark Fiber costs • University network Urban Fiber Builds • Varennes: 50 km - $406K (maintenance $26K/year) • Montreal East: 14 km - $120K (maintenance $9K/year) • Laval: 33km - $213K (maintenance $15K/year) • University network Rural Fiber Builds • Sorel: 54km - $266K (maintenance $19K/year) • Megantic: 40km -$273K (maintenance $14K/year) • Schoolboards • Victoriaville school board -Average price for fiber(s) $2 - $7 per meter • Spokane School District - $US 800/mo for first 5 years then $US 400/mo • Over 50 schools • Stockholm - $1200/mo – over 100 schools • Las Vegas School district – 240 schools – Telcordia (Bellcore) prime contractor • Many, many others in the works • Companies like Telcordia (Bellcore), IBM, etc are now leading development of dark fiber networks for schools

9. Condo Fiber Build Examples • Des affluents: Total cost $1,500,00 ($750,00 for schools) • 70 schools • 12 municipal buildings • 204 km fiber • $1,500,000 total cost • average cost per building - $18,000 per building • Mille-Isles: Total cost $2,100,000 ($1,500,000 for schools) • 80 schools • 18 municipal buildings • 223km • $21,428 per building • Laval: Total cost $1,800,000 ($1,000,000 for schools) • 111 schools • 45 municipal buildings • 165 km • $11,500 per building • Peel county: Total cost $5m – 100 buildings • Cost per building $50,000

10. Peel County Municipal Fiber Network • Mississauga, Brampton, Pell • 200 km of Fibre • 96 strand backbone • “Enough for small country” • 12-60 strands elsewhere • 12,000 strand-kilometers • Laid end-to-end = Victoria to St. John’s …...and back again

11. Typical Payback for school(Real example – des affluents – north of Montreal) • Over 3 years total expenditure of $1,440,000 for DSL service • Total cost of dark fiber network for 100 schools $1,350,000 • Additional condominium participants were brought in to lower cost to school board to $750,000 • School board can now centralize routers and network servers at each school • Estimated savings in travel and software upgrades $800,000 • Payback typically 8 –16 months • Independent Study by Group Secor available upon request

12. Before After fiber fiber • Antennas 78 0 • Novell Servers 82 1 • SQL Servers 13 3 • Lotus Notes Servers 2 1 • Tape Backup Servers 12 4 • Ethernet switches/hubs 10 98 • Routers 108 3 • Cache/proxy (Linux) 12 0 • Fire walls (Linux) 1 1 Reduction in the number of servers

13. A possible framework for the last mile • The R&E community leadership in customer empowered networks is pointing to a possible solution for the last mile to the home • An architecture concept also based on open access customer owned dark fiber using well known LAN architectures • Many competitive service providers share in the cost of condominium fiber • Ensures facilities based competition • Telcos are unlikely to build FTTH in existing neighborhoods because of the huge capital investment and ROI needed on that investment • Solutions for high speed Internet to the home may not come from the carriers but from the R&E community

14. The basic assumptions • The good, the bad and the ugly.. • Monopolies are bad • Duopolies are ugly • Facilities based competition is good • The private sector, in an open competitive market, is far more effective at responding to consumer’s needs and introducing new services at lower prices than any kind of government regulation • But government has a responsibility to foster competition and ensure a level playing field • Where a natural monopoly exists government has a responsibility to regulate that monopoly, but only as a last resort • First it should make every attempt to develop mechanisms for introducing private sector competition rather than depending on legislative fiat • Regulation should be seen as a last resort

15. Networked Nation CA*net 4 Usually one GigaPOP per province Provincial research and education network Usually one access facility in every major town and city Commercial Internet Commercial Internet SuperNodes Colo Colo School board office City Hall Colo University Splice Box Nodes Colo Splice Box Hospital School Library School School Homes Option A: Home owners and businesses have fused connections all the way to service provider at supernode Option B: Home owners are aggregated at node by service provider of their choice

16. Possible architecture for large town Carrier Owned Fiber Central Office For Wireless Company Cable head end School board office Telco Central Office Condominium Fiber with separate strands owned by school and by service providers Colo Facility School School Average Fiber Penetration to 250-500 homes VDSL, HFC or Fiber Provisioned by service provider

17. Possible architecture for small town Receiver for Satellite Streaming Receiver for Skycache Town Hall Cache boxes and servers Operated by satellite company Condominium Fiber with separate strands owned by school/town hall and by service providers Colo Facility School School Average Fiber Penetration to 250-500 homes

18. Benefits to Industry • For cablecos and telcos it help them accelerate the deployment of high speed internet services into the community • Currently deployment of DSL and cable modem deployment is hampered by high cost of deploying fiber into the neighbourhoods • Cable companies need fiber to every 250 homes for cable modem service, but currently only have fiber on average to every 5000 homes • Telephone companies need to get fiber to every 250 homes to support VDSL or FSAN technologies • Wireless companies need to get fiber to every 250 homes for new high bandwidth wireless services and mobile Internet • It will provide opportunities for small innovative service providers to offer service to public institutions as well as homes • For e-commerce and web hosting companies it will generate new business in out sourcing and web hosting • For Canadian optical manufacturing companies it will provide new opportunities for sales of optical technology and components

19. Carriers are not the only decision maker in the last mile • Governments and consumers are becoming more active voice in determining the future of broadband to home • Do not assume that carrier best technical solution is the only approach • Open access is becoming a critical political issue • Consumers want more than duopoly of cable and telco • Facilities based competition the best • Municipalities object to their streets being torn up • Dig once – bury lots of fiber • Residents object to street furniture and antennae

20. An important Role for Government • Governments promote the framework for GITH networks by funding schools, universities, libraries, hospitals and municipal buildings as first customers and early adopters of dark fiber and optical networks • Private sector leverages that investment by government to promote high speed Internet access to schools and universities to extend the fiber to the home • Electric utility companies, municipal governments, CLECs, SMEs, entrepreneurs, as well as traditional telcos and cablecos can participate as providers, provided they subscribe to the architecture of open access, facilities based competition through dark fiber (or wavelengths) • Emphasize the development and use of technology that specifically addresses the new architecture and the last mile, which must therefore be open, cheap and Internet-only

21. CANARIE's 6th Advanced Networks Workshop"The Networked Nation" November 28 and 29, 2000Palais des CongrèsMontreal, Quebec - Canada • "The Networked Nation", will focus on application architectures ("grids") made up of customer owned dark fiber and next generation Internet networks like CA*net 3 that will ultimately lead to the development of the networked nation where eventually every school, home and business will have high bandwidth connection to the Internet. • Three tracks: • Customer owned dark fiber for schools, hospitals, businesses and homes. • Next generation optical Internet architectures that will be a natural and seamless extension of the customer owned dark fiber networks being built for schools, homes and businesses. • "application grids", which are a seamless integration of dark fiber and optical networks to support specific collaborative research and education applications.