Amsterdam Citynet scores a home run for fibre

This article originally appeared in FibreSystems Europe magazine Dec 2008/Jan 2009 p16.

Amsterdam’s municipal fibre network has become a showcase for fibre-to-the-home in Europe. Pauline Rigby took a trip to the Dutch capital to see how the build out is progressing.

In a secret location in an Amsterdam basement, the world’s largest POP (point of presence) has just been commissioned. With more than 13,000 individual fibres entering the site, and space for multiple service providers to install their broadband equipment, you might expect the POP to occupy a large physical area. In reality, the room is about the size of a classroom, and the 13,000 fibres are four bunches of cables that a person could almost encircle with their hands. It’s the modern equivalent of the old copper telephone exchange — but it takes up about one fifth of the space.

The POP is one of four district exchanges covered by the Citynet network, which now offers high-speed internet to some 40,000 households and small businesses in the Zeeburg, Oost-Watergraafsmeer and Osdorp areas of Amsterdam. The completion of the exchanges marks a major milestone for the project as phase I of the network build-out comes to an end. In phase II, which is in the planning stages, fibre will be rolled out to the rest of the city.

Decisions, decisions
There’s no doubt that Amsterdam’s municipal fibre network is a success. The project is on schedule, and take-up rates are good. Citynet’s business plan projected take-up rates of 40% to ensure the project’s viability, but reports suggest the actual rate is closer to 50%. Little wonder then that Amsterdam often plays host to visiting groups from other city authorities that are eager to replicate Citynet’s success.

“Doing fibre to the home in a dense old city is one of the biggest challenges there is, and everyone is interested in how we’re doing it,” said Herman Wagter, project director and CEO of Glasvezelnet Amsterdam (GNA), the company that owns and manages the infrastructure.

It’s been a long road for the Citynet project, which was first mooted back in 2001. Amsterdam city council recognised the increasing need for a modern, fast communications network, and so launched an inquiry into what was needed to make the network possible. The motivation was simple: to secure the future economic and social wellbeing of the city. The council reasoned that it’s less expensive in the long run to invest early, than to try and revitalize districts that have fallen into decline.

From the outset, the city council was in favour of an open-access model, which would encourage service provider competition. Over the next few years an advisory committee investigated the technical, financial and legal feasibility of the project, and ultimately recommended that the city council should restrict its role to the fixed infrastructure by providing a dark fibre access network.

Since nearly half of all accommodation in Amsterdam is owned by housing associations, it should come as no surprise that when the Citynet project started developing a business case in 2004, and invited non-government parties to take part, the housing associations were first to show an interest. At this point, invitations to tender for the construction and operation of the network were also issued.

So in 2006, three investors — the municipality, the housing associations and private sector investors ING Real Estate and Reggefiber — set up GNA, with each one investing €6 m. The rest of the funding, another €12 m, would come from debt financing, bringing the total to €30 m.

GNA concluded the contracts with the companies that had won the tenders for building and operating the network. The physical network would be constructed by a consortium consisting of local Dutch companies Van den Berg Infrastructuren (part of Royal BAM Group) and fibre maker Draka, while BBned, a subsidiary of Telecom Italia, would be responsible for operating the active equipment.

The project finally got the green light from the European Commission, when it concluded that the city council’s investment in GNA did not constitute state aid because they had financed the project on the same terms as any other investor. With this particular legal wrinkle sorted, construction on phase I of the network — to connect 10% of the homes in the city — finally got under way in October 2006.

Having high-density local exchanges or POPs is one of many technical decisions that the Citynet project team has needed to make. “You have a problem if you have lots of small POPs — its called backhaul,” explained Wagter. Each POP has to connect to the rest of the world, and that connection needs redundancy (multiple paths in case of failure). Large POPs provide economy of scale so that service providers can rent the backhaul at a sensible price.

However, the first decision the Citynet project made was more fundamental: should it deploy a passive optical network (PON) architecture or what Wagter calls “home run” fibre, which is a point-to-point topology. PONs share fibre and equipment near the head-end of the network, which does result in some cost savings. But infrastructure sharing does not allow unbundling (allowing other service providers to put their equipment into the local exchange). PONs have a 1:32 splitter in the street cabinet, which means that those 32 customers get locked into the same service provider — and that didn’t fit with the city’s plan to have an open-access network. (Regulators have proposed bitstream access as a solution to this problem, but it’s more complicated to implement.)

PONs also share capacity, which places limits on the bandwidth to the end-user. The Citynet planners calculated that home-run fibre could achieve 100 Mbit/s at a reasonable price point, while PON technology was limited to around 40 Mbit/s per end-user. Although that may sound like a lot, Amsterdam is thinking long term. “We want the infrastructure to last 30 years. But even 10 years in technology and the internet is a long time — just think what you were doing 10 years ago,” Wagter pointed out.

Although a home-run network requires more fibres than a PON, in fact the cost of the cables themselves represents a relatively small part of the total — just 19% of the bill of materials, and only 4% of the overall cost of the network installation, according to figures from Draka. Nor does the extra fibre mean more digging — on the contrary, careful network planning allows common fibre routes to be exploited and installed simultaneously (see “Careful planning eases installation” box).

Draka designed a new cable especially for the Citynet project, which is robust enough to be buried directly in the ground. “The thing about direct buried fibre is that you only have to splice and test it in the apartment or at the concentration point in the street,” explained Wagter. “You don’t have to blow the fibre so you don’t need to test the ducts to see if they are air tight. It all adds up to speed and convenience.” With this system, the installers can open up the street, install the fibre and close it up again on the same day.

Draka also planned to deploy lower-cost mechanical splices for joining fibres, but soon found that the flexible soil that the city is built on wasn’t suitable — the vibration from buses driving down the street caused reliability problems. Information like this will be invaluable when it comes to extending the network to the rest of the city. “That’s why we did 10%, to see what works and what doesn’t,” said Wagter.

Access the future
Although planning for phase II of the roll out appears to be well under way, details are being closely held. Project officials are not free to talk because of non-disclosure agreements, and there is some uncertainty over regulation. At the end of November, the Dutch telecoms watchdog OPTA presented its proposal for a regulatory framework and price structure for access to the last-mile fibre networks being constructed by the joint-venture between KPN and Reggefiber. Incumbent operator KPN is also investigating the possibility of bringing fibre broadband to the entire country, although reports in the press that the operator had earmarked €6–7 bn in funds were premature. “The official KPN stance is that they are trialling networks in cities and will decide next year what to do,” said Tim Poulus, an independent financial analyst based in the Netherlands.

KPN has only a minority stake in Citynet, through its part-ownership of Reggefiber, so the project should fall outside the jurisdiction of the regulator, he says. However, speculation is circulating that the national operator might want to buy out ING, the housing associations, or even the city council’s stake in GNA, which would put a different perspective on things. To complicate matters further, operator BBned was put up for sale in December because owner Telecom Italia has decided to focus on the markets in Italy, Brazil and Argentina.

News about phase II of Citynet will probably emerge in the next few months, and there’s no time to lose. To meet the target of connecting the entire city in the next five years, 1–2 km of fibre will need to be laid every day. The investment required is expected to be around €300 m, or about €700 per home. Whether that’s a lot or not depends on your viewpoint. “When you multiply it up it’s a lot, but per home it’s not expensive,” said Wagter. “You cannot buy a front door for that.”

Reproduced with permission. © Institute of Physics and IOP Publishing Ltd.