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					          Lightwaves at the end of the telecom
                        tunnel?

                   Nordunet Annual Conference
                   Reykjavik, August 24th 2003


Yves Poppe
                                                 1
Dir. IP Strategy
Agenda

   Evolution of Transoceanic Internet Capacity
    Demand and Supply

   Aftermath of the Great Telecom Storm

   The R&E World Sees More and More Light

   Next (Light)wave of Opportunities


                                                  2
The pitfalls of predictions and forecasts
                                            3
In October 1994 Teleglobe and its partners
 inaugurated Cantat-3 with two fiber pairs,
   capacity of 5 gigabit (2x2.5Gb) linking
   Canada to the UK, Germany, Denmark,
      Iceland and the Faroe Islands.

    Doubled the capacity under the Atlantic
        155mb was earmarked for data
 Engineering estimated 17years to fill the cable


                                                   4
                                         183



                                   45 Mb/s (in trial)
                                                                                   155 Mb/s CT-3
                                                                                                          Iceland PTT
                                                                                                          ATM Network

KDD/NTT ATM R&D
     Network                                                                                                                          34Mb/s
                                                                                                                                                           B-WIN
    (JAPAN)                                                                                                                                                (DFN)
                  Ibaraki, Japan                         Lake Cowichan


                                                                          Pennant Point      155 Mb/s CT-3


                                                                    Te le globe                                                       34 Mb/s
                                                                                                                                                           Berkom
                                               Vancouver.BC         ATM Te st
                                                                     Ne twork

                                                                           Montreal                                   DT
                              45Mb/s        45Mb/s      45Mb/s                                                    ATM Network


                                           CANARIE                                                                                          34Mb/s
                                           CA-Net-2                                                                                                         SWITCH
                                            Network                                                                                                       (Switzerland)
                                                                                                                    JAMES
                                          (CANADA)


                                                                                                                                         34Mb/s
                                                                                                        34Mb/s
                                                45Mb/s           45Mb/s                                                   34Mb/s


                                         STARTAP                                                                                                  SIRIUS
                                                                       Sprint             SuperJANET                     RENATER
                                         (Chicago)                                                                                              ATM Network
                                                                    ATM Network           ATM Network                   ATM Network
                                                                                                                         (FRANCE)                 (ITALY )
                                                                       (US)                  (UK)

                                                45Mb/s



                                          MCI v BNS
                                           Network
                                                                 Cantat-3 and R&E 1995-1998
                                                                                                                                                                          5
How Reality Turned Out to Look Like
    The internet tsunami took everybody by surprise.
    Cantat-3 was full in less than 3 years.
    The magic potion of DWDM : five years later cables of 1000 times the
     capacity of Cantat-3 were being installed.
    Deregulation, easy access to capital, advances in laser and fiber
     technology and spectacular internet growth created a new generation
     of global cable builders: Global Crossing, Level3, FLAG ,
     360networks and resulted in a cornucopia of transmission capacity.
    R&E transatlantic connectivity : from kb/sec to meg/s to gig/sec in
     less than 10 years
    After 3-4 years of spectacular growth, a peak in early 2000 and a
     long steep downhill in the telecom industry.

                                                                      6
    The Battle of the Atlantic
   Design capacity and RFS                      Gbps* RFS
    –   Level 3/GC (Project Yellow)              1,280     Sep00
    –   TAT-14 (Club)                              640     Apr01
    –   Hibernia (360networks, Inc.)              1,920    Jun01
    –   FLAG Atlantic-1 (FLAG/GTS)                2,560    Sep01
    –   Atlantic Crossing -2 (Global Crossing)    2,560**  1Q01
    –   TyCo Global Network                       2,560    Jun02
    –   Apollo (C&W)                             3,200     Feb03
    –                                  Total         12,160Gbps!
        Lit capacity early 2003: 2,338Gb
                                            * = Design capacity
        (source: Telegeography)
                                            ** = Cancelled, AC-2 joining Level 3
                                                                                   7
    The Battle of the Pacific
   Design capacity and RFS                                 Gbps* RFS
    –   TPC-5 (club)                         20    Dec98
    –   Southern Cross                      480    Nov00
    –   China-US (club)                      80    Jan 01
    –   PC-1 (Global Crossing & Marubeni) 640      Apr01
    –   Japan-US (club)                     640     Oct01
    –   Tyco Pacific                      5,120**   Jan03
    –   FP-1 FLAG Pacific                 5,120*** 2Q02
    –   360 Pacific                       4,800*** 3Q02
    –    * = Design capacity
                                                         Total 6,980Gbps
         ** = april 01: Tycom joins FLAG                                     Lit capacity early
              aug 01: FLAG withdraws, Tycom continues alone; RFS postponed   2003: 1,043
         ***= project dropped                                                (Telegeography)
                                                                                                  8
Transoceanic buildout frenzy completed

   With the activation of the C&W Apollo transatlantic
    and Tyco’s transpacific cable the current phase of
    intense build-out is coming to an end
   With current fill rates low and about 3 years between
    start and completion of a project, this means new
    cables unlikely before 2007-2008
   Weak point remains Europe-Asia capacity. Should
    improve with SEAMEWE4 scheduled RFS date Q1
    2005 with 1.28Tb/s design capacity.

                                                            9
Could there be some oversupply?

 Atlantic: 19% of total capacity lit (2,338Gb). Of lit capacity
  about 1,300Gb is sold.
 Pacific: 16% lit (1,043Gb)
 Intra-Asia : 3.5% lit (15,810 Gb design capacity)
 US-Latin America: 6% lit ( 5,166 GB design)
 Europe-Asia: 30 gig lit ; 120 gig design capacity
 Europe-Africa-Asia: 10 gig lit ; 130 gig design


                      Numbers; Telegeography 2003 Int’l bandwidth report

                                                                           10
Congratulations Iceland !




        FARICE : 40 gig at RFS 640 gig design RFS jan 1st 2004
               Ready to participate in lambdaswitching!
                                                                 11
  Predictions and forecasts revisited
• What   will fill the capacity and how fast?
    • Current (2003) transatlantic: voice: 9.3gig
    internet: 258.3gig other (IPL etc): 48.7gig
    •TeleGeography predicts a slow growth
    scenario of 763.6gig and a fast growth of
    1.48Tb for 2007
•Who would dare to predict it will take 17
years to fill the capacity?
•Could lambda switching have the same
disruptive effect on predictions and forecasts
as internet was about to have when planning
capacity a decade ago?
                                                    12
Who still remembers Icecan and Scotice?
Laid in 1961-62, capacity: 24
telephone channels


Also in 1961, COTC as
Teleglobe was known in those
days together with BPO and
C&W activated the first Cantat
between New Foundland and
Scotland with a capacity of 80
telephone channels. Cantat1      From the Bill Glover cable
was retired in 1986                  stamp collection
                                 See: http://www.atlantic-
                                       cable.com/             13
Disruptive capacity growth?
         It happened before
  In the 1950s new technology put cables ahead of
  radio. Small vacuum tubes that could operate
  under water for 20 years or more meant that
  amplifiers could be buried at sea with the cable.
  This boosted the cable's information capacity to
  the point that it could even carry telephone
  signals.

  Small vacuum tubes like this could be buried at
  sea with the cable for years. They helped to
  increase a cable's information-carrying capacity by
  more than a thousandfold.

   Borrowed from : The Underwater web, Smithsonian Institute
   http://www.sil.si.edu/Exhibitions/Underwater-Web/uw-credits.htm 14
Agenda

   Evolution of Transoceanic Internet Capacity
    Demand and Supply

   Aftermath of the Great Telecom Storm

   The R&E World Sees More and More Light

   Next (Light)wave of Opportunities


                                                  15
    Aftermath of the perfect storm

 More than 100 billion in default
 Huge write-offs
 Market valuation telecom sector down 1 trillion $
 500,000+ jobs lost at service providers and manufacturers
 Carrier capex still very conservative
 First wave emerges from bankruptcy protection
 Bottom reached but slow recovery




                                                          16
How did we get into this predicament?
   Deregulation + internet and wireless boom + abundance of
    equity capital --» wild spending by established telecom
    carriers and start-ups.
   1996 US Telecom Act and European deregulation
    promised access to a US$300 billion market growing at
    10% p.a.
   Emulation of get rich quick model by 1996 purchase of
    MFS by Worldcom for US$14billion or 6 times the value of
    assets put in the ground
   Spectacular advances in DWDM technology expected to
    accomodate an insatiable bandwidth demand.
                                                            17
    How did we get into this predicament? (2)

 Unrealistic expectations of traffic growth
 Does internet traffic double every 90 days or every
  year? depends on what scale you look at it.
 Rising multipolarity of the internet was largely
  ignored in early models : end of the US centricity
  of information
    – Japan : 80% of accessed internet info is local.
    – Chile: 70% is local
    – USA: 10 to 30% of accessed information resides in the
      region!
                                                          18
During the storm : progress continued
   20+ million Broadband internet accesses (DSL and
    cable) in NA by end of 2003
   2 million personal Wi-Fi routers (Linksys, D-link etc)
   The Wi-Fi hotspot phenomenon
   Cellphones become multifunctional and start to replace
    fixed line

         Stage set for the next wave : global reachability
                           and mobility

                                                             19
Agenda

   Evolution of Transoceanic Internet Capacity
    Demand and Supply

   Aftermath of the Great Telecom Storm

   The R&E World Sees More and More Light

   Next (Light)wave of Opportunities


                                                  20
The R&E world savours the bandwidth glut

    Happy days for the R&E world:
     – Europe: Geant goes 10 gig, some NREN’s also
     – North-America: lambda’s and dark fibre
     – Transatlantic: Finally enough to satisfy the
       bandwidth gluttony of the high energy physics
       people. 10gig transatlantic links on the verge of
       becoming common place.
     – Transpacific and intra-Asia: slower price decline,
       lambda’s still have to wait a while.
     – Europe-Asia : remains a bottle-neck however.
                                                            21
North-American R&E lambda initiatives
   Canada
    –   Ca*net4 : Canarie federal R&E network
    –   RISQ : Quebec
    –   ORANO : Ontario
    –   BCnet ORAN: British Columbia
   USA
    –   NLR (National Lightrail): CENIC, Cisco, Level3
    –   Fiberco : Internet2 with Level3
    –   USAwave : SURA with AT&T
    –   Teragrid
    –   DoE ultrascale : initially ORNL – Sunnyvale - Chicago
    –   Abilene 2nd gen
                                                                22
USA regional R&E initiatives
   California (CENIC Optical Networking Initiative)
   Connecticut (Connecticut Education Network)
   Florida (Florida LambdaRail)
   Indiana (I-LIGHT)
   Illinois (I-WIRE)
   Maryland, D.C. & northern Virginia (MAX)
   Michigan
   New York + New England states (NEREN)
   North Carolina (NCNI)                              Source: Paul Love
   Ohio (Third Frontier Network)                      internet2 Jtech
                                                       Lawrence,Ka august 4th
   Oregon
   SURA Crossroads (southeastern region)
   Texas (Star of Texas)                                                  23
Transatlantic R&E lambda initiatives

   Translight
    –   Starlight : Eurolink -UIC
    –   Netherlight : SURFnet
    –   DataTAG/CERN
    –   Canarie


   10 gig triangle Chicago-Amsterdam-Geneva and
    Ca*net4 10 gig to NY and Seattle


                                                   24
The capacity divide
   Uneven geographic distribution of capacity gluts
    contributes to a capacity divide, sometimes further
    exacerbated by monopolies or oligopolies in certain
    regions
   Clearly illustrated by the SLAC PingER project
    measuring regional disparities of internet packet loss.
   Abrupt halt of the global build affected Mediterranean
    and Europe-Asia
   Uneven capacity distribution is also visible on
    national and regional level: Everyone builds on same
    major routes and same major population centers.
                                                              25
Agenda

   Evolution of Transoceanic Internet Capacity
    Demand and Supply

   Aftermath of the Great Telecom Storm

   The R&E World Sees More and More Light

   Next (Light)wave of Opportunities


                                                  26
The optical future has already started
 Will it lead to an all-optical future?
 Will Moore’s law and related laws for growth of fiber
  transmission capacity and internet growth continue to
  apply? Probably
 The laws of gravity still apply, even in the New Economy.
  Progress alternates between periods of exponential
  growth and plateaus were the progress is absorbed.
 Technology ahead of demand?
   – 160 wavelengths at 40Gb ?
   – Soliton technology?
   – Optical crystals and hollow-core fibers with another
     100fold increase of capacity per fiberstrand capacity?
                                                         27
The Verizon optical bet
                            As reported in Business Week, August 4th

   Verizon plans fiber to every home and business in its 29
    state territory : 10-15years and US$20 to 40 billion.
    US$12.5 capex in2003.
   Why? Cable Companies are eating into phone lines (2.2
    million end 2002, forecast 3.7 million in 2005 ) and are
    ahead in broadband internet (66% of the 18 million US
    BB internet users).
   Is this model applicable outside the US in coming years?
    – Not sure; phone companies DSL dominate in many countries.
      Competitive pressure from cablecos mostly not so severe.
                                                                       28
What are the next telecom growth engines?
   The telecom ecosystem is famished. Hopes for reviving
    corporate and end-user demand are largely pinned on
    –   Integrated mobile internet access (E-mail,web, data), 3G
    –   SMS, Voice over IP, location based services
    –   Home/SME area networks
    –   Local wireless: Bluetooth, Wi-Fi, Ultra large Bandwidth
    –   Further penetration of DSL and cable access, FTTH?
    –   P2P applications : videoconferencing, gaming etc.
    –   Secure VPN’s and end to end security and encryption.
    –   Remote monitoring, tracking, sensing (healthcare, transportation etc.)
    –   Audio/videostreaming
    –   sensor networks, RFID
   Widespread penetration of this end to end mobility and
    reachability on the internet implies the deployment of IPv6,
    prerequisite for permanent addresses, scaleability and
    sufficient address space.                                29
Next: the era of ubiquitous everything

   Ubiquitous computing
   Ubiquitous communication
   Ubiquitous information access
   Ubiquitous monitoring
   Ubiquitous localisation and tracking
   Ubiquitous neighbour discovery and sentient
    networks

                                                  30
Thank you for your attention




                               31

				
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