Acquisition%20and%20deployment%20of%20dark%20fiber%20within%20SURFnet

1
Acquisition and deployment of dark fiber within
SURFnet

• Walter van Dijk
• CEF Workshop
• Prague, 25 May 2004

2
Topics addressed

• Facts about SURFnet
• Managed dark fiber within SURFnet
• The market for managed dark fiber (supply side)
• The market for managed dark fiber (demand side)
• Solving the deadlock demand aggregation
• Procurement of managed dark fiber

3
SURFnet

• National Research Network in the Netherlands
• 170 connected institutes (universities,
  research-institutes, academic hospitals en
  libraries)
• 130 institutes connected over dark fiber _at_1
  Gbit/s
• 800.000 end-users
• Not-for-profit organization
• Annual Turnover (2003) 35 Meuro
• Infrastructure
• - innovation financed by government (GigaPort)
• - operational costs financed by users

4
Managed dark fiber within SURFnet
May 2004 over 4.000 km of fiber pairs
5
Managed dark fiber within SURFnet

• May 2004
• - 4.000 kilometers of fiber available
• - 3.200 km inter-city routes
• - 800 km in metro areas (city networks)
• - acquired at an investment of 25,8 Meuro, which
  breaks down to 6,5 euro/meter for a 15-year IRU
• Yet to be acquired
• - missing fiber routes in the design of SURFnet6
  - 12 routes
• - fiber for a limited number of customer
  connections

6
Supply side factors

• Supply of unlit fibers differs per region and is
  dependent on many factors
• Pro-active presence of companies that invest in
  the construction of fiber-infrastructure for the
  purpose of selling/leasing to others
• Re-active
• - overcapacity with suppliers of fiber-based
  services (e.g. telecom- and cable-TV companies)
• - overcapacity with suppliers that have
  constructed fiber-networks for their own purposes
  (e.g. municipalities, universities,
  railroad-companies etc.)

7
Supply side unequal spread of fiber
8
Demand side factors

• Demand aggregation can initiate/stimulate
  activity on the supply side by
• breaking telco/operator syndicates that restrict
  supply of dark fiber and/or impose prohibitive
  prices
• creating an attractive market that will interest
  new entrants on the supply side (e.g.
  contractors)
• Government role of launching customer is of
  essential importance

9
An example of demand aggregation

• In 2002 SURFnet initiated the so-called
  GigaMAN-project
• Bundling of demand for fibers within the
  not-for-profit sector in a city (municipalities,
  educational institutes, healthcare institutes,
  libraries etc.)
• Provides solely a managed dark fiber
  infrastructure. Users decide how (technology,
  applications etc.) they want to use the fibers
• Project resulted in three GigaMANs (Nijmegen,
  Leeuwarden en Arnhem). Spin-offs in Tilburg,
  Leiden, Eindhoven and Breda
• The GigaMAN concept is a proven effective means
  for overcoming market imperfections

10
... Beware managed dark fiber

• Arrange for preventive- and corrective
  maintenance!

11
Carrier-owned or customer-owned

• A GigaMAN can be carrier-owned or
  customer-owned. Important differences on aspects
  like
• costs
• risks
• organizational issues
• quality
• position of the profit sector
• regulatory, judicial and fiscal issues
• Hence, carrier-owned is preferred from an
  NRN-perspective.

12
Example of a customer-owned GigaMAN
13
Procurement of dark fiber assets

• - 1st tender (2001) resulted in contracts with
  new entrants like BT, GX, EuroFiber, VSTI etc.
• - confronted with this situation the incumbents
  (KPN Telecom, Essent etc.) entered the market as
  eager players
• the IRU (Indefeasible Right of Use) concept can
  be translated to a lease agreement under Dutch
  law thereby providing a means to secure the
  rights of use during a 15 year period for assets
  that have been paid upfront
• public procurement procedures (EC guidelines)
  lead to a transparent market and a
  downward-spiral of prices

14

• Walter.vanDijk_at_SURFnet.nl
• www.surfnet.nl
• www.gigaport.nl
• www.ductstad.nl