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Dirk van der Woude - City of Amsterdam - Working in 21st Century Amsterdam

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Dirk van der Woude - City of Amsterdam - Working in 21st Century Amsterdam

  1. 1. Amsterdam and FttH real broadband, real sustainable growth San Francisco, February 20, 2008 Dirk van der Woude City of Amsterdam dirkvanderwoude@gmail.com
  2. 2. 2 Lesson from the past: each industrial revolution is underpinned by new infrastructure THE AGE OF INFORMATION GLOBAL DIGITAL TELE- COMMUNICATIONS AND TECHNOLOGY 1971 ICT SUPPORT NETWORKS THE AGE OF OIL, THE AUTOMOBILE, ELECTRICITY, TELEPHONE, HIGHWAYS PETROCHEMICALS AND MASS PRODUCTION 1908 AND AIRWAYS THE AGE OF STEEL ELECTRICITY AND TRANSCONTINENTAL HEAVY ENGINEERING 1875 COMMUNICATIONS, STEAMSHIPS, RAILWAYS AND TELEGRAPH THE AGE OF RAILWAYS, COAL AND RAILWAYS, PENNY POST THE STEAM ENGINE 1829 AND TELEGRAPH THE “INDUSTRIAL REVOLUTION” CANALS, TURNPIKE ROADS AND MAIL IN ENGLAND 1771 COACHES Source: Carlota Pérez
  3. 3. 3 Nothing new (1) Left: the highway project of HaFraBa e.V. (1926) Public access highways –or open networks- were a wise German invention (and by inspiring Mr Eisenhower lead to the US Interstate Highway System) However, to build them overstretched market vision and ability, in Germany, Holland as well as the USA http://members.a1.net/wabweb/history/hafraba.htm
  4. 4. 4 A city and its assets
  5. 5. 5 4th in Europe – related to 40,000 jobs start: around 1250 AD
  6. 6. 6 4th in Europe – related to 100,000 jobs start: 1920 AD
  7. 7. 7 1st in the world – related to 50,000 jobs start: 1997 AD Source: Henk Steenman, 2007
  8. 8. 8 Global hub… Online: 85% of all Amsterdam pop.
  9. 9. 9 So Amsterdam counts three harbors… And the latest one strenghens the city’s attractiveness for innovative companies in telecom, creative media, Web & ICT Now related to about 50,000 jobs – We wouldn’t mind more… And we will try to capitalize even more with real symm and open broadband As well a base for sustainable growth arts media and entertainment creative business services content hardware telecommunication financial software consultancy Other
  10. 10. 10 Two curves Source: Nemertes, Nov. 2007
  11. 11. 11 Conclusions Nemertes study (Nov. 2007) The Internet Singularity, Delayed: Backbones, switching & peering will not be the problem Demand for Internet and IP services grows exponentially, access investment proceeds linearly – “we believe that this will happen possibly as early as 2010” Impact of inadequate access infrastructure: – relatively mild for individual users, who will encounter Internet “brownouts” or “snow days” – But overall, (…) this inadequate infrastructure will slow down the pace of both technical and business innovation. “Rather like osteoporosis, the underinvestment in infrastructure will painlessly and invisibly leach competitiveness out of the economy” And there’s that IPv4 thingie too…
  12. 12. 12 Trouble is at the 1st mile – what to do? “given time an exponential curve always will cross a linear one” Source: Nemertes, Nov. 2007
  13. 13. 13 OECD: Average advertised broadband speeds, by technology, Oct 2007 77 120 FTTx 58 591 8 993 DSL 1 603 Down Up 8 619 Cable  722 1 840 Wireless  736
  14. 14. 14 1st mile in Japan: 280,000 new FttH… per month Japan: FttH overtaking xDSL 1999-2007 plus prognosis 2008 March, 2008 14.000 12.000 Cable 10.000 xDSL FttH thousands 8.000 10 million FttH July 4, 2007 6.000 Factual Prognosis 4.000 2.000 0 20 .03 20 .03 20 .03 20 .03 20 .03 20 .03 20 .03 20 .12 20 .03 20 .06 20 .09 20 .12 20 .03 20 .06 20 .09 20 .12 20 .03 20 .06 20 .09 2 .1 08 99 00 01 02 03 04 05 05 06 06 06 06 07 07 07 07 08 08 08 19
  15. 15. 15 Muni fiber in Europe, some examples Köln Vienna München Paris, Hauts-de- Milan Stock- Amsterdam NetCologne 1 million 450,000 4 SP’s Seine (1995) holm 200,000 FttH homes towards (Sarko- FttH/B (via sewer) FttH 1 million fiber) FttB Dark fiber 40,000 FttH FttH FttH Role of city Market (estimate) Public Support Subsidy Municipal 125 million 150 million 300 70 million Up to 70 100 100 6 million in invest- million? By cheap million million, million, PPP ment use of subsidy now partly 10 years construct municipal proposed. privatized profit euro assets making Network No 3d layer 3d layer ? Neutral No Yes Yes open? operator
  16. 16. 16 Amsterdam want FttH, point to point 40,000 meter boxes, 10% of Amsterdam Boroughs of Zeeburg Why? (100%), Oost (part) – Data infrastructure is new essential foundation & Osdorp (part) – Necessary for future competitiveness as well as sustainable economic and social growth Take advantage of existing assets – Ams-IX – world class back bone infrastructure (we only need last few 100 meters) – strong media, ICT, new media sectors – high internet use (> 85% of population) – Internationally oriented multi-language population
  17. 17. 17 Set up & revenue streams 40,000 adresses now – later 450,000 consumer/ Service providers SME 100% market Wholesale operator Rent sells open access 100% market Passive infrastructure: Rent GNA CV 33% municipal shares 20% municipal euro’s
  18. 18. 18 This gets into every meter box Telephone (x 2) Coax All existing appliances usable – plug & play No set top boxes! V-lan (x 4) - One port per service - Separate specifications - f.e. care, security, etc.
  19. 19. 19 What’s on offer One high quality standard – Henry Ford black Ford T, ‘redux’ Consumer – Several competing service providers – Single, double or triple play – Internet, symmetric, 10 to 100 Mb/s – 9,95 euro single play telephone – 35 to 65 euro triple play incl. 20 to 30 Mb/s symmetric internet – 100 Mb/s internet single play: 99 euro – Competitive in price and quality – First connected customer: april 2007 SME – Varying offers by several competing SP’s
  20. 20. 20 Ubiquitous broadband & Green IT Wired vs. Wireless? No, they ‘re in love: “A wireless bit is a bit desperately in search of a wire” Ben Verwaayen, CEO BT Cheap high bandwidth lowers one of wireless’ barriers: cheap backhaul Or: ubiquitous broadband Green opportunities: – Smart traveling: PTA… – Physical travel more and more substituted by virtual travel – Green low energy personal IT: PC As a Service, Saas 2.0 Connecting & intelligizing can save lots of energy: – waste chain – street lighting – consumer goods distribution –… Image: thank you, Nico Baken
  21. 21. 21 A forward looking view… An informed analysis: Computing to follow pattern of energy – From local supply to ubiquitous utility Computing from a wall socket – And wireless as well? Large energy savings – Have professionals in charge of resources – Works better than overbooking… Strong need for regulation though!
  22. 22. 22 Nothing new (2) La Fibre?
  23. 23. 23 No, 18th century WiFi… 1792 Lille => Paris: • 15 stations • 36 characters in 32 minutes • all records broken, huge success •And up to 1846 cause for the French to resist investing into a copper telegraphe network •L’ histoire se répète…
  24. 24. 24 We and ‘Our’ Networks… Questions? Image: thank you, Nico Baken
  25. 25. 25
  26. 26. 26 Alternative? Docsis 3.0 <= promise: “120 Mb/s over coax…” …real world: shared bandwidth => (Xiamen, Jan. 2007)
  27. 27. 27 Alternative? VDSL2 http://www.lightreading.com/document.asp?doc_id=93103&page_number=4
  28. 28. 28 DSL, average upload speed Countries With Relative High Broadband Penetration But Low Upload DSL Speed Source: OECD Broadband Statistics and others
  29. 29. 29 First mile today: % of services with down speeds <1Mbps or ≥5Mbps 0% 10% 20% 30% 40% 50% 60% > 5Mbps Countries Where Majority is Below 1Mbps Source: OECD Broadband Statistics and others
  30. 30. 30 FttH first mile in Europe just a pick (2) Vienna, Zürich (muni energy corp’s): FttH in whole city – Vienna, Sept. 24, 2007: start of roll out to 50,000 homes Scandinavia – Norway: municipal energy corp of Oslo: Open FttH to 50% of whole Norwegian population – Sweden: 200 of 289 communities own a fiber network – Denmark: energy corps, in 2006 – 2010 FttH to 50% of Danish population Slovenia: incumbent – 85% of all households in country, 450 million euro (25% soft loan by EU) Latvia: incumbent, 50 K FttH Andorra (!): incumbent, copper switch off in 2009/10
  31. 31. 31 FttH first mile in Europe just a pick (1) The battle for France, starting with Paris – Iliad, Neuf Cegetel, France Telecom, Noos Numericable – Massive investments – Consumer price of 100 Mbit symmetric: 30 euro – Hauts-de-Seine: FttH in whole department (pop. 1.5 million, 100.000 SME’s, subsidy 50 to 70 million) Chairman & proponent: M Sarkozy – over 100 broadband projects France with government participation – Policy French government: 4 to ? million FttH in 2012 Germany: competitive telco’s deploying FttH – NetCologne: all of Cologne, to be followed by Bonn, Aachen? (NetCologne = 100% GEW Köln AG = 100% City of Cologne) – Hamburg, Telecom Italia: 100,000 FttH in 2012 – München, muni energy corp: > 60% of city FttH – Other projects in Schwerte, Norderstedt, Hamburg, Gelsenkirchen, Dessau, Magdeburg
  32. 32. 32 French questions, Amsterdam answers Sharing of the last part of the local loop should be considered option 1 option 2 option 3 option 4 Competition between 2 fiber networks Co investment Unbundling bitstream NB: ‘NRO’ is Noeud de Raccordement Optique – or Node Source: Mme Gabrielle Gauthey, ARCEP (14 Nov. 2007)
  33. 33. 33 A business perspective Layer Economic character Life cycle Cost per sub Service Low CapEx, average to high OpEx 1 to x years ? Layer Active Average CapEx, low OpEx 5 to 10 years 300 – 500 Layer Passive High CapEx, very (very!) low OpEx 25 to 50 years 500 - 700 Layer
  34. 34. 34 Architecture three-layer model • Passive fibre infrastructure: Point-to-Point • Unbundled local loop of fiber = maximum competition at services level in value chain • Largest capacity for future growth • Active layer: Active Ethernet • Applications services layer, Service providers are being offered transparent access: • with discrete virtual LANs (VLANs) for each service on a per user basis • allowing multiple services to be delivered and invoiced to each home in parallel (i.e. multiple ISP’s, Citywide Intranet, closed circuit IP-based surveillance, IP-TV, care and medical services etc.)
  35. 35. 35 FttH & broadband strategy of Amsterdam Create a market entity (GNA) that rolls out fiber – With a minimal financial government participation – On equal market terms – No involvement in active network, services or pricing – In accordance with EU state aid rules Open network, universal roll out – Start with first 10% of city, to be followed by rest of city Roll out creates intricate network – Cheapily accessible – Ideal conditions for wireless networks as well Final aim: ubiquitous broadband in all of Amsterdam Selective stimulation of services – Using ideal living lab for innovative services
  36. 36. 36 Fast broadband & economic growth Estimated impact on GDP - Compound Annual Growth Rate in %(2007-2015) Australia - Broadband Advisory Group UK - BSG Queensland - Allen Consulting NZ - NZ Institute** NZ - Economist Intelligence Unit USA - Momentum Group & Brookings Institution Victoria - ACIL Tasman Korea - Ministry of Info. and Comms ( ETRI, KSDNI, KT, SK Telecom, and LG Telecom) 0 0,2 0,4 0,6 0,8 1 1,2 1,4 Source: September 2007 The New Zealand Institute - www.nzinstitute.org
  37. 37. 37 Killer app?

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