ECorridors: Designing and Implementing a Fiber Optic Infrastructure to Enhance Competitiveness of...

eCorridors: eCorridors: Designing and Implementing a Fiber Optic Infrastructure to Enhance

Competitiveness of Rural Virginia

VirginiaTech

A University Putting Knowledge to WORK

"Who will pave my information super-driveway?"

- Zigurd Mednieks

Virginia

TechA University Putting Knowledge to WORK

eCorridors

• A research and outreach program at Virginia Tech 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.

How to move to the next plane.

Virginia


• 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

eCorridors

Virginia


Predicting the Future is Difficult

• 1989/1990 “Mr. Blythe (VP Information Systems at Virginia Tech), 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)

Virginia


Historical Boom/Bust Cycles

Virginia


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

Virginia


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

Virginia


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”.

Virginia


Examples of Network Producers

Virginia


Tobacco Commission Project Focus

Virginia’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.

Virginia


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.

Virginia


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.

Virginia


Strategic Technology 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

Technology, Director of Advanced Network Services, Director of Network Virginia (statewide broadband production network serving over 1000 sites)

Strategic Technology Infrastructure for Regional Competitiveness in the Network Economy

Virginia Tech’s eCorridors Program Announces

A series of in-depth studies providing a roadmap for revitalization through investment in advanced network infrastructure.

Volume 1 Rationale, Environment and Strategic Considerations.

Volume 2Connecting the Regional Infrastructure to National and International Networks

Volume 3A Fiber Optic Infrastructure Design for Southside and Southwest Virginia

Volume 4 Fiber Optic Infrastructure Design Guide

Volume 5 Financial Feasibility and Investment Rationale

Volume 6 Leveraging Advanced Optical and Ethernet Technologies

Volume 7 Speculative and Alternative Technologies

Volumes 8-11Community, Demographics, Applications and Anchor Tenants

http://www.ecorridors.vt.edu

A University Putting Knowledge to Work

Virginia


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

Virginia


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 profit-margin 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

Virginia


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

Virginia


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

Virginia


Role for Private Sector

• Take the lead to stimulate Virginia’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

Virginia


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?

22Virginia


Traditional Alternative: e58 Corridor?

Community Access Nodes

North South Fiber Route Interconnect Points

Research Node / Carrier Hotel

CableLanding

Multi-Use Fiber

Access Research Networks

E-58 Economic Development

Commercial Lease / IRU

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.

Virginia


Emerging Alternative: Geodesic Network Mesh

County ZCounty X County Y

To Norfolk

To Columbus/Chicago To D.C.

To Raleigh/RTPTo Knoxville/ ORNL

e CorridorsVirginia Tobacco Area Network BackboneConceptual Representation *

* Actual routes pending detailed analysis.

To Richmond

To Greensboro/Charlotte/Atlanta

Virginia


A Crossroads for High Tech Economic and Workforce Development

Tobacco Growing RegionHigh Tech Crossroads

Fiber Infrastructure

Virginia Tech

University ofVirginia

Old DominionUniversity

VirginiaCommonwealth

University

Oak Ridge National

Laboratory

MCNCUNC Duke

NC StateRTP

Virginia


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

Virginia


Political Representation: Geodesic Network Mesh

All incorporated jurisdictions along final chosen routes will be connected.= County Seats = City

Virginia


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

Virginia


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

Virginia


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

Virginia


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 long-term political support and community buy-in

Virginia


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

Virginia


Virginia Tech’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 20-30 years.

Virginia


Virginia Tech’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

Virginia


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 802.11 or fiber to the home.

• Invest ~80% in backbone infrastructure; 20% in last mile demonstration projects.

Virginia


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

Virginia


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

“We must become the change we want to see.”

Mahatma Gandhi

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