THE BATTLE TO WIN
LOCAL NET NEUTRALITY

     Malcolm J. Matson
      malcolm.matson@oplan.org
Since the beginning of time, the
        human spirit has thrived on


CONVERSATION
  being able to exchange ideas, emotio...
Since the beginning of time, the
        human spirit has thrived on


PEER-TO-PEER
  being able to exchange ideas, emotio...
Since the beginning of time, the
        human spirit has thrived on


CONVERSATION
  being able to exchange ideas, emotio...
…across the centuries, independent of technology




         CONVERSATION
…across the centuries, independent of technology




         CONVERSATION
…across the centuries, independent of technology




         CONVERSATION
…across the centuries, independent of technology




         CONVERSATION
…across the centuries, independent of technology




         CONVERSATION
10th March 1876                                                    “Mr Matson
                                            ...
CONVERSATION
USER CREATED CONTENT
    …lay at the very heart of the telephony industry for its
    first century of world-...
CONVERSATION
is most relevant and meaningful to us when it
      takes place within the context of


      COMMUNITY
CONVERSATION - within the context of COMMUNITY




              my
                                      the world
      ...
CONVERSATION - within the context of COMMUNITY




               my
                                          my world
  ...
CONVERSATION - within the context of COMMUNITY

   ME




             MY HOME &
             WORKPLACE
                  ...
CONVERSATION - within the context of COMMUNITY
                                                       PRIVATE
            ...
CONVERSATION - within the context of COMMUNITY
                                                   HOME
                   ...
CONVERSATION - within the context of COMMUNITY

   ME




         MY HOME &
         WORKPLACE




   OFFICE             ...
CONVERSATION - within the context of COMMUNITY

   ME


                             CONVERSATION
         MY HOME &
     ...
CONVERSATION - within the context of COMMUNITY
                                        HOME
                              ...
CONVERSATION - within the context of COMMUNITY
                                        HOME
                              ...
CONVERSATION - within the context of COMMUNITY
                                       WORKNET
                            ...
CONVERSATION - within the context of COMMUNITY

   ME
                                  each user buys a “piece of cable ...
CONVERSATION - within the context of COMMUNITY
                                  HOME OR OFFICE NETWORK

   ME

          ...
CONVERSATION - within the context of COMMUNITY

    ME




           MY HOME &
           WORKPLACE
                     ...
of the world‟s population now lives in cities
and the remainder live in villages and smaller
               communities
re are few exceptions
                                                 My subjectslive in
                                ...
Mr Bell’s ‘LocalNet’
                        Scarce
‘Dumb’ CPE
                       Capacity
                           ...
PTO LOCAL EXCHANGE
PTO LOCAL EXCHANGE




      $



                     Trunk / International




                     C...
PTO LOCAL EXCHANGE
PTO LOCAL EXCHANGE




      $



                     Trunk / International




                      ...
in order to allocate
                      „scarce‟ network capacity
A dedicated „dumb‟
   instrument …




 to access rou...
Telephone Operators Business Model
 ENTIRELY DICTATED BY THE FUNDAMENTALS OF THE TECHNOLOGY

GENERATING REVENUE BY:
   a) ...
Total annual cost to the world =

$ multi trillion
  a)   charging end users for exclusive use of a pair of copper wires
 ...
THREE GREAT DISRUPTIVE TECHNOLOGIES
OF THE SECOND HALF OF THE 20TH CENTURY




  silicon chip    silicate glass   spread s...
“Big brother is watching you !”
POLITICAL DRIVE FOR PRIVATISATION,
   COMPETITION & REGULATION




MARKET DEPLOYMENT & TAKE-OFF
 FOR THE DIGITAL TECHNOLOG...
POLITICAL DRIVE FOR PRIVATISATION, COMPETITION & REGULATION

                         BRIGHTON

                          ...
POLITICAL DRIVE FOR PRIVATISATION, COMPETITION & REGULATION



          The same process of distorting „state interventio...
Great Britain
Local connectivity and access
  throughout every nation
provided by a single, formerly
nationalised monopoly...
France
Local connectivity and access
  throughout every nation
provided by a single, formerly
nationalised monopoly carrie...
Italy
Local connectivity and access
  throughout every nation
provided by a single, formerly
nationalised monopoly carrier...
Germany
Local connectivity and access
  throughout every nation
provided by a single, formerly
nationalised monopoly carri...
Brazil
Local connectivity and access
  throughout every nation
provided by a single, formerly
nationalised monopoly carrie...
POLITICAL DRIVE FOR PRIVATISATION, COMPETITION & REGULATION

                        BRIGHTON
                            ...
POLITICAL DRIVE FOR PRIVATISATION, COMPETITION & REGULATION
                           …collision between disruptive techn...
Imagine… England 1759
                             …if the French can build the
                              Canal du Mid...
1785 ….. 1825
           4,500 miles of canal
… but imagine if this vital sector had been regulated as today
1829
                            … not to be confused with




OFCOM



Office of Canal Operations & Management
PLAN VIEW



            TOWPATH




CANAL




 TOWPATH
‘APPARENT’ BENEFITS FOR EVERYONE
   •   faster movement of coal and other materials
   •   greater utilization of canal ca...
What actually happened?
   THE CANAL INDUSTRY
   Declined and was dormant within 20 years


         DISRUPTIVE TECHNOLOGY...
GOLDEN AGE OF SOCIAL AND ECONOMIC PROSPERITY



                        A historical perspective on
                      ...
FIVE TECHNOLOGICAL REVOLUTIONS IN 200 YEARS
                                              Carlota Pérez




              ...
EACH INDUSTRIAL REVOLUTION IS UNDERPINNED
BY NEW INFRASTRUCTURECarlota Pérez


                                           ...
EACH INDUSTRIAL REVOLUTION IS UNDERPINNED
BY NEW INFRASTRUCTURECarlota Pérez

    “In no previous „industrial           GL...
… and the result ?

             APPARENT BENEFITS FOR EVERYONE
                 • „always on‟ connectivity to the interne...
POLITICAL DRIVE FOR PRIVATISATION, COMPETITION & REGULATION




                         PUBLIC POLICY FORMULATION THROUGH...
POLITICAL DRIVE FOR PRIVATISATION,
   COMPETITION & REGULATION




MARKET DEPLOYMENT & TAKE-OFF
 FOR THE DIGITAL TECHNOLOG...
MARKET DEPLOYMENT TAKE-OFF FOR THE DIGITAL TECHNOLOGIES

                         WHAT?
                         WHERE?
  ...
END USER
                                                                    PTO LOCAL EXCHANGE


                        ...
PTO LOCAL
                                                                             EXCHANGE
PTO LOCAL EXCHANGE




   ...
PTO LOCAL
                                                                               EXCHANGE
PTO LOCAL EXCHANGE


 Di...
Ken Olsen, CEO Digital
        Equipment Corporation



“There is no reason for any individual to

    have a computer in ...
Digital                                     Digital                             Digital                          Digital
C...
Digital                                     Digital                                  Digital                         Digit...
2009 LOCALNET
                                                           SP SP
                                   ∞       ...
Open Public Local Access Network                                                                                          ...
THE MOTHER OF ALL DIGITAL BATTLES

                                                                   v         „our‟
    ...
THE MOTHER OF ALL DIGITAL BATTLES

                                                                    v        „our‟
    ...
Give a man a fish and
  you feed him for a day…
teach him how to fish and you
    feed him for a lifetime
Give a man a fish and
    you feed him for a day…
 teach him how to fish and you
ruin a great business opportunity
CONVERSATION - within the context of COMMUNITY

    ME




         HOW?
           MY HOME &
           WORKPLACE
       ...
CONVERSATION - within the context of COMMUNITY

   ME




        HOW?
         MY HOME &
         WORKPLACE
             ...
THE BLIND PERPETUATION BY INCUMBENT TELCOS AND CABLECOS OF THE
     VERTICALLY INTEGRATED SERVICE PROVIDER BUSINESS MODEL
...
THE BLIND PERPETUATION BY INCUMBENT TELCOS AND CABLECOS OF THE
         VERTICALLY INTEGRATED SERVICE PROVIDER BUSINESS MO...
THE BLIND PERPETUATION BY INCUMBENT TELCOS AND CABLECOS OF THE
     VERTICALLY INTEGRATED SERVICE PROVIDER BUSINESS MODEL
...
THREE NECESSARY AND SUFFICIENT COMPONENTS

                     LOCAL POLITICAL
                       VISION AND
        ...
THREE NECESSARY AND SUFFICIENT COMPONENTS

                     LOCAL POLITICAL
                       VISION AND
        ...
A new generation of enlightened and visionary
local political leaders are beginning to ask …



   “What if mycity and loc...
A new generation of enlightened and visionary
local political leaders are beginning to ask …



                     APPLI...
A new generation of enlightened and visionary
local political leaders are beginning to ask …



                          ...
CONVERSATION - within the context of COMMUNITY

                        Amsterdam Deputy-Mayor
                        Mar...
CONVERSATION - within the context of COMMUNITY

                         Eindhoven Mayor

                         Alexand...
CONVERSATION - within the context of COMMUNITY

                        Panayiotis Tzanikos
                        Former...
CONVERSATION - within the context of COMMUNITY


                         Councillor John Robinson
                       ...
THREE NECESSARY AND SUFFICIENT COMPONENTS

                     LOCAL POLITICAL
                       VISION AND
        ...
TWO ALTERNATIVE ROUTES TO AN OPLAN


           BUILD „OVERLAY‟ FIBRE OPLAN NETWORK
  1.

       The current favoured opti...
TWO ALTERNATIVE ROUTES TO AN OPLAN


           „CONVERT & UPGRADE‟ EXISTING LOCAL INCUMBENT NETWORK
  2.

       •    wou...
ONLY FIVE CITIES IN THE WORLD WITH A
 DEDICATED TELECOMS INCUMBENT
CONVERSATION - within the context of COMMUNITY

                                  In one of these cities, Malcolm Matson h...
OPLAN… Open Public Local AccessNetwork
     is a network of truly „broadband‟ capacity - i.e. where the bandwidth capacity...
You are invited to
     collaborate and
       contribute
    to the first local
  incumbent exchange
          carrier
in...
CONVERSATION


              WALTER LIPPMANN 1889-1974
              Influential US writer, journalist, and political comm...
CONVERSATION


                MALCOLM MATSON 2009
                Disruptive technologist and entrepreneur




     “ In ...
THE BATTLE TO WIN
LOCAL NET NEUTRALITY

     Malcolm J. Matson
      malcolm.matson@oplan.org
Malcolm Matson's Presentation at eComm 2009
Malcolm Matson's Presentation at eComm 2009
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Malcolm Matson's Presentation at eComm 2009

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Malcolm Matson's Presentation at eComm 2009

  1. 1. THE BATTLE TO WIN LOCAL NET NEUTRALITY Malcolm J. Matson malcolm.matson@oplan.org
  2. 2. Since the beginning of time, the human spirit has thrived on CONVERSATION being able to exchange ideas, emotions, information and creative output in freely formed relationships with other people
  3. 3. Since the beginning of time, the human spirit has thrived on PEER-TO-PEER being able to exchange ideas, emotions, information and creative output in freely formed relationships with other people
  4. 4. Since the beginning of time, the human spirit has thrived on CONVERSATION being able to exchange ideas, emotions, information and creative output in freely formed relationships with other people
  5. 5. …across the centuries, independent of technology CONVERSATION
  6. 6. …across the centuries, independent of technology CONVERSATION
  7. 7. …across the centuries, independent of technology CONVERSATION
  8. 8. …across the centuries, independent of technology CONVERSATION
  9. 9. …across the centuries, independent of technology CONVERSATION
  10. 10. 10th March 1876 “Mr Matson come here – I At the end of the very day that Alexandra Graham want to see you” Bell spoke the first ever words over the telephone, he wrote to his Father … “ Dear Papa….I feel that I have at last found the solution of a great problem, and the day is coming when telegraph wires will be laid on to houses just like water or gas is, and friends will converse with each other without leaving homes.quot; CONVERSATION
  11. 11. CONVERSATION USER CREATED CONTENT …lay at the very heart of the telephony industry for its first century of world-changing impact requires open, unmediated and symmetrical connectivity Network Neutrality
  12. 12. CONVERSATION is most relevant and meaningful to us when it takes place within the context of COMMUNITY
  13. 13. CONVERSATION - within the context of COMMUNITY my the world my village, ME home & beyond town or city workplace
  14. 14. CONVERSATION - within the context of COMMUNITY my my world my village, ME home & beyond town or city workplace FAMILY & PHYSICAL VIRTUALSOCI PRIVATE WORK SOCIAL AL NETWORKS NETWORK NETWORK NETWORK
  15. 15. CONVERSATION - within the context of COMMUNITY ME MY HOME & WORKPLACE MY VILLAGE, TOWN OR CITY MY WORLD BEYOND …our CONVERSATIONdynamically interacts across all four domains of community in which we live our ’real’ lives
  16. 16. CONVERSATION - within the context of COMMUNITY PRIVATE NETWORK ME - Edge-to-Edge UNMEDIATED UNMETREDPassive - UNDIFFERENTIATED - Symmetrical NON-PROPRIETORY - Open Access IP NET NEUTRALITY
  17. 17. CONVERSATION - within the context of COMMUNITY HOME NETWORK ME MY HOME & WORKPLACE - Edge-to-Edge UNMEDIATED - Passive UNMETRED UNDIFFERENTIATED - Symmetrical NON-PROPRIETORY - Open Access IP NET NEUTRALITY
  18. 18. CONVERSATION - within the context of COMMUNITY ME MY HOME & WORKPLACE OFFICE UNMEDIATED - Edge-to-Edge UNMETRED - Passive NETWORK UNDIFFERENTIATED - Symmetrical NON-PROPRIETORY - Open Access IP NET NEUTRALITY
  19. 19. CONVERSATION - within the context of COMMUNITY ME CONVERSATION MY HOME & UNMEDIATED - Edge-to-Edge WORKPLACE UNMETRED - Passive UNDIFFERENTIATED - Symmetrical NON-PROPRIETORY - Open Access IP MY ‘WORLD THE INTERNET BEYOND’ NETWORK NETWORK NEUTRALITY
  20. 20. CONVERSATION - within the context of COMMUNITY HOME NETWORK ME MY HOME & WORKPLACE Who and how do we pay for the hub HOME and cabling? NETWORK
  21. 21. CONVERSATION - within the context of COMMUNITY HOME NETWORK ME MY HOME & WORKPLACE …or the WiFi cards and wireless router?
  22. 22. CONVERSATION - within the context of COMMUNITY WORKNET WORK ME MY HOME & WORKPLACE …same principle in the office - WHO funds the -network?
  23. 23. CONVERSATION - within the context of COMMUNITY ME  each user buys a “piece of cable and we share the cost of the router  the family or company could purchase and MY HOME & own it all outright WORKPLACE  they could lease it from a third party who There are several provides the financing available options … whichever option we choose,athere partyno “The last thing we ought to do is let third are buy ongoing restrictions or costs to usage it all, own and control it and then offer us a ‘service’ based on charging us as much as it can for using it - but only in a manner which they dictate”
  24. 24. CONVERSATION - within the context of COMMUNITY HOME OR OFFICE NETWORK ME Once you have found a means of financing the MY HOME & WORKPLACE ‘bits of hardware’ – the ‘software bits’ go FREE! IN THE DIGITAL WORLD, THIS BUSINESS MODEL OR PRINCIPLE IS SCALEABLE WITHOUT LIMIT NETWORK NEUTRALITY
  25. 25. CONVERSATION - within the context of COMMUNITY ME MY HOME & WORKPLACE MY VILLAGE, TOWN OR CITY MY WORLD BEYOND ?    NETWORK NETWORK NEUTRALITY NETWORK NEUTRALITY CAPTIVE
  26. 26. of the world‟s population now lives in cities
  27. 27. and the remainder live in villages and smaller communities
  28. 28. re are few exceptions My subjectslive in cities but „we‟ live in I My subjects may live in a WALLED live in villages , a CASTLE. GARDEN… but it‟s …or two towns and cities bigger and better but WE live in a than HIS! castle
  29. 29. Mr Bell’s ‘LocalNet’ Scarce ‘Dumb’ CPE Capacity PTT Intelligence in Central office
  30. 30. PTO LOCAL EXCHANGE PTO LOCAL EXCHANGE $ Trunk / International CITIES PTO LOCAL EXCHANGE PTO LOCAL EXCHANGE $
  31. 31. PTO LOCAL EXCHANGE PTO LOCAL EXCHANGE $ Trunk / International $ PTO LOCAL EXCHANGE PTO LOCAL EXCHANGE $
  32. 32. in order to allocate „scarce‟ network capacity A dedicated „dumb‟ instrument … to access routing „intelligence‟ within the network… to enable… CONVERSATION
  33. 33. Telephone Operators Business Model ENTIRELY DICTATED BY THE FUNDAMENTALS OF THE TECHNOLOGY GENERATING REVENUE BY: a) charging end users for exclusive use of a pair of copper wires from their home/desk to the local exchange plus selling or renting them CPE(handset) b) the orderly allocation of scarcity - trunk and international network capacity (bandwidth) – charging by time & distance latterly, developing and selling network embedded „value c) added‟ services and „content‟ VERTICALLY INTEGRATED SERVICE PROVIDER BUSINESS MODEL INFRASTRUCTURE + OPERATION + SERVICES
  34. 34. Total annual cost to the world = $ multi trillion a) charging end users for exclusive use of a pair of copper wires from their home/desk to the local exchange plus selling or renting them CPE(handset) b) the orderly allocation of scarcity - trunk and international network capacity (bandwidth) – charging by time & distance latterly, developing and selling network embedded „value c) added‟ services and „content‟ VERTICALLY INTEGRATED SERVICE PROVIDER BUSINESS MODEL INFRASTRUCTURE + OPERATION + SERVICES
  35. 35. THREE GREAT DISRUPTIVE TECHNOLOGIES OF THE SECOND HALF OF THE 20TH CENTURY silicon chip silicate glass spread spectrum fibre DIGITAL SOFTWARE COMPUTER OPTICAL FIBRE CONTROLLED RADIO
  36. 36. “Big brother is watching you !”
  37. 37. POLITICAL DRIVE FOR PRIVATISATION, COMPETITION & REGULATION MARKET DEPLOYMENT & TAKE-OFF FOR THE DIGITAL TECHNOLOGIES
  38. 38. POLITICAL DRIVE FOR PRIVATISATION, COMPETITION & REGULATION BRIGHTON 1889 FOLKSTONE PORTSMOUTH GLOUCESTER HULL NATIONAL 1880s M&A TELEPHONE TUNBRIDGE GLASGOW WELLS COMPANY SWANSEA DERBY BRISTOL Nationalisation Local telephone companies and networks were „forced‟ 1912 into a national monopoly status by state nationalisation 19 84 Privatisation
  39. 39. POLITICAL DRIVE FOR PRIVATISATION, COMPETITION & REGULATION The same process of distorting „state intervention‟ took place in almost every country around the globe 19 84 PTT Privatisation
  40. 40. Great Britain Local connectivity and access throughout every nation provided by a single, formerly nationalised monopoly carrier operating a vertically integrated ‘service provider’ business model
  41. 41. France Local connectivity and access throughout every nation provided by a single, formerly nationalised monopoly carrier operating a vertically integrated ‘service provider’ business model
  42. 42. Italy Local connectivity and access throughout every nation provided by a single, formerly nationalised monopoly carrier operating a vertically integrated ‘service provider’ business model
  43. 43. Germany Local connectivity and access throughout every nation provided by a single, formerly nationalised monopoly carrier operating a vertically integrated ‘service provider’ business model
  44. 44. Brazil Local connectivity and access throughout every nation provided by a single, formerly nationalised monopoly carrier operating a vertically integrated ‘service provider’ business model
  45. 45. POLITICAL DRIVE FOR PRIVATISATION, COMPETITION & REGULATION BRIGHTON FOLKSTONE PORTSMOUTH GLOUCESTER HULL TUNBRIDGE GLASGOW WELLS SWANSEA BRIGHTON BRISTOL THE DISRUPTIVE DIGITAL TECHNOLOGIES SHOULD HAVE BEEN LET LOOSE AT THE LOCALNET LEVEL AND NOT ‘GIVEN’ EXCLUSIVELY TO THE TELECOMS SECTOR TO DEPLOY
  46. 46. POLITICAL DRIVE FOR PRIVATISATION, COMPETITION & REGULATION …collision between disruptive technologies and state anointed privatised monopolies WHAM! appoint consultants WE, How should these to the regulator need to consult all the addresstechnologies new this to avoid be deployed to ‘market failure’ ‘stakeholders’ benefit everyone? silicon chip 198 1984 silicate glass fibre Telecoms ‘stakeholders’ “ … the route to the future is with us – you can rely on us to deploy the new technologies” spread spectrum VESTED INTERESTS HANDED POWER BY THE STATE TO TAME DISRUPTIVE TECHNOLOGY AGAINST „OUR‟ INTERESTS
  47. 47. Imagine… England 1759 …if the French can build the Canal du Midi – why don’t I build a canal to carry coal from my coal mines to Manchester to where all my mill customers are? Francis Egerton 3rd Duke of Bridgewater
  48. 48. 1785 ….. 1825 4,500 miles of canal … but imagine if this vital sector had been regulated as today
  49. 49. 1829 … not to be confused with OFCOM Office of Canal Operations & Management
  50. 50. PLAN VIEW TOWPATH CANAL TOWPATH
  51. 51. ‘APPARENT’ BENEFITS FOR EVERYONE • faster movement of coal and other materials • greater utilization of canal capacity • minimised public risk through licensed regulatory regime • birth of a new engine manufacturing industry • massive growth of steel and rail output • last but not least … “happy horses”
  52. 52. What actually happened? THE CANAL INDUSTRY Declined and was dormant within 20 years DISRUPTIVE TECHNOLOGY + FREE MARKET OF END USERS = SECTOR SPECIFIC REGULATION = GOLDEN AGE OF SOCIAL AND ECONOMIC PROSPERITY
  53. 53. GOLDEN AGE OF SOCIAL AND ECONOMIC PROSPERITY A historical perspective on the five previous „industrial revolutions‟ created by disruptive technological innovation Carlota Pérez
  54. 54. FIVE TECHNOLOGICAL REVOLUTIONS IN 200 YEARS Carlota Pérez THE AGE OF INFORMATION TECHNOLOGY 1971 THE AGE OF OIL, THE AUTOMOBILE, PETROCHEMICALS AND MASS PRODUCTION 1908 THE AGE OF STEEL ELECTRICITY AND HEAVY ENGINEERING 1875 THE AGE OF RAILWAYS, COAL AND THE STEAM ENGINE 1829 THE “INDUSTRIAL REVOLUTION” IN ENGLAND 1771
  55. 55. EACH INDUSTRIAL REVOLUTION IS UNDERPINNED BY NEW INFRASTRUCTURECarlota Pérez GLOBAL DIGITAL TELECOMMUNICATIONS THE AGE OF AND 1971 INFORMATION TECHNOLOGY ICT SUPPORT NETWORKS THE AGE OF OIL, THE AUTOMOBILE, ELECTRICITY, TELEPHONE, PETROCHEMICALS 1908 HIGHWAYS AND AIRWAYS AND MASS PRODUCTION THE AGE OF STEEL ELECTRICITY TRANSCONTINENTAL COMMUNICATIONS, 1875 AND HEAVY ENGINEERING STEAMSHIPS, RAILWAYS AND TELEGRAPH THE AGE OF RAILWAYS, RAILWAYS, PENNY POST 1829 COAL AND THE STEAM ENGINE AND TELEGRAPH THE “INDUSTRIAL REVOLUTION” CANALS, TURNPIKE ROADS 1771 IN ENGLAND AND MAIL COACHES
  56. 56. EACH INDUSTRIAL REVOLUTION IS UNDERPINNED BY NEW INFRASTRUCTURECarlota Pérez “In no previous „industrial GLOBAL DIGITAL TELECOMMUNICATIONS AND 1971 revolution‟, has the ICT SUPPORT NETWORKS infrastructural network of the ELECTRICITY, TELEPHONE, 1908 HIGHWAYS AND AIRWAYS „revolution‟ that succeeds it, ever been delivered by, or TRANSCONTINENTAL COMMUNICATIONS, 1875 STEAMSHIPS, RAILWAYS AND TELEGRAPH evolved from, those responsible for the RAILWAYS, PENNY POST 1829 AND TELEGRAPH infrastructural network of the prevailing age” Matson CANALS, TURNPIKE ROADS 1771 AND MAIL COACHES …SO WHAT WAS THE PHILOSOPHICAL, POLITICAL OR ECONOMIC RATIONALE FOR REGULATING TO DO JUST 1984 WITH THE CURRENT ICT REVOLUTION ? THIS IN
  57. 57. … and the result ? APPARENT BENEFITS FOR EVERYONE • „always on‟ connectivity to the internet • faster „download‟ speeds • increased ISP competition • lower end user costs • increased usage and household penetration ADSL Unbundled ADSL is NOT a ‘Golden Age’ creating deployment of disruptive digital technologies
  58. 58. POLITICAL DRIVE FOR PRIVATISATION, COMPETITION & REGULATION PUBLIC POLICY FORMULATION THROUGH silicon chip CONSULTATION OF SELF-APPOINTED STAKEHOLDERS INHIBITS PROGRESS AND WORKS AGAINST silicate glass fibre INNOVATION AND THE INTERESTS OF THE END USER, CITIZENS AND SOCIETY spread spectrum
  59. 59. POLITICAL DRIVE FOR PRIVATISATION, COMPETITION & REGULATION MARKET DEPLOYMENT & TAKE-OFF FOR THE DIGITAL TECHNOLOGIES
  60. 60. MARKET DEPLOYMENT TAKE-OFF FOR THE DIGITAL TECHNOLOGIES WHAT? WHERE? silicon chip silicate glass fibre WHO? HOW? spread spectrum
  61. 61. END USER PTO LOCAL EXCHANGE “dumb” CPE PTO LOCAL EXCHANGE + dedicated network capacity Trunk / International NETWORK embedded “intelligence” + scarce capacity PTO LOCAL EXCHANGE PTO LOCAL EXCHANGE
  62. 62. PTO LOCAL EXCHANGE PTO LOCAL EXCHANGE Trunk / International Optical Fibre Optical Fibre PTO LOCAL PTO LOCAL EXCHANGE EXCHANGE
  63. 63. PTO LOCAL EXCHANGE PTO LOCAL EXCHANGE Digital Digital Computer Computer Trunk / International Digital Optical Fibre Computer Optical Fibre PTO LOCAL PTO LOCAL EXCHANGE EXCHANGE Digital Digital Computer Computer
  64. 64. Ken Olsen, CEO Digital Equipment Corporation “There is no reason for any individual to have a computer in their home.”
  65. 65. Digital Digital Digital Digital Computer Computer Computer Computer PTO LOCAL EXCHANGE PTO LOCAL EXCHANGE Digital Digital Computer Computer Digital Digital Digital Digital Computer Computer Computer Computer Trunk / International Digital Optical Fibre Computer Optical Fibre Digital Digital Digital Digital Computer Computer Computer Computer PTO LOCAL PTO LOCAL EXCHANGE EXCHANGE Digital Digital Computer Computer Digital Digital Digital Computer Computer Computer
  66. 66. Digital Digital Digital Digital Computer Computer Computer Computer END USER PTO LOCAL EXCHANGE PTO LOCAL EXCHANGE Digital Digital Intelligent CPE Computer Computer + restricted Network Digital Digital Digital Digital capacity Computer Computer Computer Computer Trunk / International Digital Optical Fibre Computer Optical Fibre NETWORK „dumb‟ routers + Digital Digital Digital Digital abundant Computer Computer Computer Computer network capacity PTO LOCAL PTO LOCAL EXCHANGE EXCHANGE Digital Digital Computer Computer Digital Digital Digital Computer Computer Computer
  67. 67. 2009 LOCALNET SP SP ∞ SP 2 3 SP Scarce Intelligent Dumb CPE Capacity ‘n’ Capacity 1 CPE PTT Intelligence ‘Dumb’ in Xchange Routers NETWORK CAPTIVE NO LOCAL P2P CONNECTIVITY ASSYMETRICAL TOPOGRAPHY The world has been turned upside down PRIMARY VALUE CAPTURED BY TELCO ‘ACTIVE’, CLOSED, METERED PIPES
  68. 68. Open Public Local Access Network OPLAN Carrier Beyond the 1 OPLAN – including the PTT Internet Wireless Node Wireless Wireless Node Wireless ISP Node Wireless Node 2 Node ISP Beyond the Wireless Wireless Wireless 1 OPLAN – Wireless Beyond the including the Node Node Node Node OPLAN – Internet including the Internet Wireless Wireless Wireless Node Node Node Beyond the Carrier OPLAN – 2 including the Internet
  69. 69. THE MOTHER OF ALL DIGITAL BATTLES v „our‟ telco/cable computers devices Digital Digital Computer Computer THE ‘DO’or ‘DIE ISSUES: Digital 1. Who will „control‟ local Computer connectivity? TELCO/CABLECO or CITIZENS Digital Digital 2. Will OURdevices remain free to Computer Computer communicate directly with each other and not just via the LOCAL TELCOs? NOW running in a city COMMUNITY near you! INTERNET or NETWORK CAPTIVE ? NETWORK NEUTRALITY ?
  70. 70. THE MOTHER OF ALL DIGITAL BATTLES v „our‟ telco/cable computers devices Digital Digital Computer Computer THE ‘DO’or ‘DIE ISSUES: Will we be able to have Digital 1. Who will „control‟ local Computer CONVERSATION connectivity? TELCO/CABLECO or with anyone other than a toll- CITIZENS Digital Digital extracting, content controlling 2. Will OURdevices remain free to Computer Computer communicate or cableco? telco directly with each other and not just via the LOCAL TELCOs? NOW running in a city COMMUNITY near you! INTERNET or NETWORK CAPTIVE ? NETWORK NEUTRALITY ?
  71. 71. Give a man a fish and you feed him for a day… teach him how to fish and you feed him for a lifetime
  72. 72. Give a man a fish and you feed him for a day… teach him how to fish and you ruin a great business opportunity
  73. 73. CONVERSATION - within the context of COMMUNITY ME HOW? MY HOME & WORKPLACE MY VILLAGE, TOWN OR CITY THE INTERNET … WORLD BEYOND    to move from this … NETWORK NETWORK NEUTRALITY NETWORK NEUTRALITY BIAS
  74. 74. CONVERSATION - within the context of COMMUNITY ME HOW? MY HOME & WORKPLACE MY VILLAGE, TOWN OR CITY THE INTERNET … WORLD BEYOND … to this    NETWORK NEUTRALITY
  75. 75. THE BLIND PERPETUATION BY INCUMBENT TELCOS AND CABLECOS OF THE VERTICALLY INTEGRATED SERVICE PROVIDER BUSINESS MODEL IS WRECKLESSLY DESTROYING SHAREHOLDER VALUE APPLICATION / CONTENT SERVICE PROVISION + NETWORK OPERATIONS + NETWORK INFRASTRUCTURE Telcos /ISPs Cable
  76. 76. THE BLIND PERPETUATION BY INCUMBENT TELCOS AND CABLECOS OF THE VERTICALLY INTEGRATED SERVICE PROVIDER BUSINESS MODEL IS WRECKLESSLY DESTROYING SHAREHOLDER VALUE £ £ RISK / RETURNS INVESTMENT APPLICATION / CONTENT SERVICE PROVISION + NETWORK OPERATIONS + NETWORK INFRASTRUCTURE
  77. 77. THE BLIND PERPETUATION BY INCUMBENT TELCOS AND CABLECOS OF THE VERTICALLY INTEGRATED SERVICE PROVIDER BUSINESS MODEL IS WRECKLESSLY DESTROYING SHAREHOLDER VALUE Technology Free Market Entry Barriers Global Life Cycle Competition & Costs Reach APPLICATION / CONTENT months infinite none high SERVICE PROVISION + NETWORK years few moderate moderate (2-3) OPERATIONS + NETWORK decades one per high none (25yr) location INFRASTRUCTURE
  78. 78. THREE NECESSARY AND SUFFICIENT COMPONENTS LOCAL POLITICAL VISION AND COMMITMENT DEVELOPMENT PARTNER WITH A THE LOCAL TELCO SOUND STRATEGIC INCUMBENT AS A OPEN ACCESS PLAN & TRACK PARTNER RECORD OPLAN
  79. 79. THREE NECESSARY AND SUFFICIENT COMPONENTS LOCAL POLITICAL VISION AND COMMITMENT DEVELOPMENT PARTNER WITH A THE LOCAL TELCO SOUND STRATEGIC INCUMBENT AS A OPEN ACCESS PLAN & TRACK PARTNER RECORD OPLAN
  80. 80. A new generation of enlightened and visionary local political leaders are beginning to ask … “What if mycity and local economycould have an OPLAN which would not only save massive cost BUT deliver better local P2P connectivity, so our community can do things differently and better so as to outperform other cities?” CONVERSATION
  81. 81. A new generation of enlightened and visionary local political leaders are beginning to ask … APPLICATION / CONTENT CONVERSATION SERVICE PROVISION + NETWORK OPERATIONS + Open NETWORK INFRASTRUCTURE Access Telcos /ISPs Cable
  82. 82. A new generation of enlightened and visionary local political leaders are beginning to ask … APPLICATION / CONTENT CONVERSATION SERVICE PROVISION + NETWORK OPERATIONS “The last thing we ought+ do is let a third party buy to Open it all, own and control it and then offer us a ‘service’ NETWORK INFRASTRUCTURE based on charging us as much as it can for using Access Telcos– but only in a manner which they dictate” it /ISPs Cable
  83. 83. CONVERSATION - within the context of COMMUNITY Amsterdam Deputy-Mayor Mark van der Horst “…. we make a big step towards the deployment of a citywide fiber-to-the-home network. This enables our city to compete with other European cities. The fiber network delivers to Amsterdam an innovative and freely accessible openinfrastructure, suitable to support growth in demand for the next 30 years or more. In this way we ensure a wide open marketplace for innovative service-providers and economic growth, as well as a fast track for the smarter and cheaper delivery of care, education and other public services.” City of Amsterdam Press Release, November 3 2005
  84. 84. CONVERSATION - within the context of COMMUNITY Eindhoven Mayor Alexander Sakkers “In 2004 the Dutch government gave to the Eindhoven Region/Southeast Brabant, the title of BRAINPORT because the economic identity of our region is defined by high- tech research and development and production activities. We believe that the development of an open public local access network to serve the community is vital to it remaining globally competitive in the 21st century knowledge economy”
  85. 85. CONVERSATION - within the context of COMMUNITY Panayiotis Tzanikos Former Mayor Municipality of Amaroussion Athens , Greece “We feel that we are entering a period when towns and regions will compete with each other and one of the key parameters in the competitiveness of the city is telecommunications. … I think that the level of what we are getting [from the conventional telecommunications sector] is not enough to equip the city for the next generation which is coming….. we feel that the way they [the telecoms operators] operate they keep the citizens, the businesses, the social groups, outside of the new era which is arriving so they do not have the motive to use the network to make new things, new creations and services.” OpenPlanet interview October 2005 “
  86. 86. CONVERSATION - within the context of COMMUNITY Councillor John Robinson Hull City Council United Kingdom “It is essential that the city of Hull has an open public local access network if it is to solve its social and economic problems resulting from older industries like fishing being replaced by the knowledge economy. We need to compete with other cities in attracting inward investment and ensuring that those who live and work in and around Hull enjoy the highest level of public services – which must be underpinned by an open access 4th utility.” OpenPlanet interview October 2008 “
  87. 87. THREE NECESSARY AND SUFFICIENT COMPONENTS LOCAL POLITICAL VISION AND COMMITMENT DEVELOPMENT PARTNER WITH A THE LOCAL TELCO SOUND STRATEGIC INCUMBENT AS A OPEN ACCESS PLAN & TRACK PARTNER RECORD OPLAN
  88. 88. TWO ALTERNATIVE ROUTES TO AN OPLAN BUILD „OVERLAY‟ FIBRE OPLAN NETWORK 1. The current favoured option BUT • fierce opposition from telecom incumbent which is proving powerful • results in local economy „financing‟ two networks : lowers global competitiveness • low penetration (50% or <) means lower utility value : esp. to public sector • most expensive solution due to civil engineering costs (25% of total CAPEX)
  89. 89. TWO ALTERNATIVE ROUTES TO AN OPLAN „CONVERT & UPGRADE‟ EXISTING LOCAL INCUMBENT NETWORK 2. • would deliver near ubiquitous local penetration and assure local P2P connectivity • avoids wasteful duplication and over-capacity • massive (25%) CAPEX saving and minimise local civil engineering disruption BUT • these national carriers have no appetite to abandon the vertically integrated business model (INFRASTRUCTURE + OPERATION + SERVICES) which seeks to „capture‟ maximum end-user service/application/content expenditure • due to earlier nationalisation, the privatised local incumbent is almost always a national carrier
  90. 90. ONLY FIVE CITIES IN THE WORLD WITH A DEDICATED TELECOMS INCUMBENT
  91. 91. CONVERSATION - within the context of COMMUNITY In one of these cities, Malcolm Matson has been active over a number of years in generating local political and community stakeholder understanding and support for creating a not-for- profit SPV which will acquire the local incumbent in order to restructure it around the OPLAN business model. This will involve divesting all service provision activities in order to focus on owning and managing this local 4th utility infrastructure so as to ensure that the long term value and benefit rests with those using it and not some absent owner hoping to rent seek within the arbitrary limits set by a sector-specific „regulator. This exemplar project will not only bring untold socio-economic benefit to the city concerned, which will trigger the pressure for emulation in other cities, but it will also demonstrate to shareholders in existing local exchange carriers, that value is to be realised by embracing rather than resisting the relentless march towards vertical desegregation and open access.
  92. 92. OPLAN… Open Public Local AccessNetwork is a network of truly „broadband‟ capacity - i.e. where the bandwidth capacity is dictated by nothing  other than physical characteristics of the deployed technologies (neutral)  dedicated to serving a local geographic community - ranging from a street or business park to an entire town or city provides abundant low cost access to connectivity on an „end-to-end‟ and symmetrical basis  throughout that community is a „public utility‟ in that it is available for use (on equal terms) by any party located within the  community it serves: public and private, business and residential affords global connectivity (inc. to the internet) through offering „open access‟ to competing third-  party carriers/service providers does not differentiate between „content creators‟ and „content consumers‟ and their „bits‟   provides infrastructure which is open to all and is owned and controlled independently of any service or content which uses it  is structured, financially and legally, and configured with management and governance measures which serve the ‟common good‟ and assures the primary short and long term „value and benefit‟ rests locally with users end-user „access‟ charges are broadly based on servicing capital and maintenance cost-recovery   is primarily funded by and managed by the private sector and market driven - not a backdoor to re- nationalisation (OPLAN white paper at www.oplan.org )
  93. 93. You are invited to collaborate and contribute to the first local incumbent exchange carrier in the world to opt for
  94. 94. CONVERSATION WALTER LIPPMANN 1889-1974 Influential US writer, journalist, and political commentator “ The role of a press is to keep a community in conversation with itself ”
  95. 95. CONVERSATION MALCOLM MATSON 2009 Disruptive technologist and entrepreneur “ In the digital age, the role of an OPLAN is to keep a community in conversation with itself ”
  96. 96. THE BATTLE TO WIN LOCAL NET NEUTRALITY Malcolm J. Matson malcolm.matson@oplan.org

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