“Under NG-PON2, it is most likely there will be no WDM-PON,” asserted Klaus Grobe, principal engineer at ADVA Optical Networking, who presented an update on standards and research projects.

To find out why, read the rest of my guest blog post for ADVA Optical Networking.

The Council really excelled itself this year with the speaker program, starting with Professor Carlota Perez, an expert on technological revolutions, and ending with Neelie Kroes, vice-president of the European Commission responsible for the Digital Agenda. In total, there were more than 80 presentations running in three parallel sessions over two days, plus an additional day of pre-conference workshops for the truly dedicated.

The conference has grown even larger, attracting more than 3,100 delegates from 80 countries, and keeping its crown as the largest FTTH conference in the world. It’s also a wonderful opportunity to meet both familiar and new faces: thanks Florence, Guy, Chris, Albert, Karin, Richard, Benoit, Costas, James, Martyn, Brian, and Lindsey, to name but a few.

For me these were the take-home messages from the event:

Europe needs to speed up on fibre: Europe is still the poor relation in the FTTH family, with just 3.9 million subscribers at the end of 2010, according to the latest update to the FTTH Ranking. This is hardly a new message from the Council, but this time they had heavyweight backing from Neelie Kroes, vice-president of the European Commission responsible for the Digital Agenda. “The current rate of new connections – now down to 25,000 a day – is simply not enough to meet our 2020 targets,” she said. To the delight of everyone in the room, she underlined just how important fibre is to the European Commission, warning that: “It not possible to maximise access while failing on fibre.”

Effective public policy on high-speed broadband is vital: Keynote speaker Carlota Perez is an economist, whose work focuses on the socio-economic impact of technological change in a historical context. It’s hard to do justice to her work in a short paragraph, but I’ll try. We are in the middle of the fifth major technological revolution, based on information and communications technology (ICT). Financial market instability and the struggle to adapt old business models to new technology are characteristic of the turning point of a technological revolution. When the market eventually moves past this stage, it enters a “golden age” of productivity and growth. But the shift to a more stable market does not happen without a push; as in the past, it will need sound public policy and regulation to shape and broaden markets. The best way to encourage the shift to a “golden age” of ICT, says Perez, is to make high-speed internet access as universal as electricity.

National regulators should play by the rules: The publication of the Recommendation on regulated access to NGA networks last year provided clear guidelines for national regulators to follow, but some regulators are ignoring core provisions in the Recommendation – and Commissioner Kroes is clearly unhappy about this. “These provisions strike a good balance between investment incentives and the need to protect competition,” she said. “It took long and intense discussions with stakeholders to agree on these principles. So in my view, everybody should now play by the rules.” Variations in local conditions are no excuse for the highly diverse national approaches to regulation, she added. “Europe does not need 27 approaches to NGA.”

The important question is not “why fibre?” but “how fibre?” Chris Holden, president of the FTTH Council Europe, highlighted this fundamental shift in perspective in his introductory message. The debate on “why fibre?” has largely been won. The big questions now are around the business models and financing to make this happen, given the high cost of digging to get fibre in the ground. For the first time at this conference, there was a session focused on investment models for FTTH. The European investment Bank explained how it is willing to bankroll well-thought-out business plans that help to meet European policy objectives (like the Digital Agenda). Another interesting presentation came from the fund manager of the Rabo Bouwfonds Communications Infrastructure Fund in the Netherlands, which is buying up cable TV networks, separating the ownership of the assets from the provision of services, and then upgrading the infrastructure with fibre. The aim of the fund is to secure long-term capital growth for its institutional investors, mainly pension funds.

Decisions made today about network topology will have long-term consequences: The workshop on European-funded technology research projects was an eye-opener. FTTH is heading off in two opposing directions, depending on whether you’re an established operator looking to economise on fibre use and consolidate central offices, or an alternative provider building an open access, point-to-point infrastructure where it makes sense to cut back on internet transit by keeping local services local. This session wasn’t very well attended – perhaps because technology isn’t considered a barrier to FTTH deployment – but it should have been, because these developments take the debate about point-to-point versus passive optical network (PON) to a whole new level.

Another highlight for me was seeing a little of the beautiful city of Milan. My taxi driver obviously thought that I looked good for another €10 and took me on the scenic route through the centre of the city. But thanks to him I saw the luminous duomo – otherwise Milan would have become yet another place that I’ve visited without actually seeing anything of it other than the inside of a conference centre.

These are just few of the high points of an event that also covered new services and applications (one room was set aside as a showcase with vendors demonstrating next-generation services like remote healthcare and home automation), case studies and success stories, technology and standards development and more. To appreciate everything that this conference has to offer, you had to be there (duh and all). Next year’s FTTH Conference will be held in Munich, Germany, on 29 February and 1 March 2012 – its got a tough act to follow.

Ashby is a village in rural Lincolnshire of just 63 homes and 3 small businesses. But while the village is tiny, it’s probably got the fastest broadband network of any community in the UK with 1Gbps connections between properties within the village itself and a 100Mbps symmetric fibre connection to the outside world.

The first customers were connected to Ashby’s network last week, thanks to the hard work of community broadband firm Nextgenus, with a little help (and some hindrance) from BT, who supply the 100Mbps fibre connection to what’s been christened the digital village pump.

The digital village pump concept is about providing a high-speed fibre connection into a village, which terminates in a mini data centre owned and managed by the local community. Nextgenus reckons this concept could be extended to bring high-speed broadband to the whole of the Final Third – and the firm was prepared to invest its own money in Ashby de la Launde to prove that the business model works.

Fibre advocates will already be familiar with the £28.8bn figure to give the UK nationwide FTTH, which works out at an average cost of about £1116 to connect a single property with fibre, and considerably more in rural areas. The business case simply doesn’t stack up, unless you do something dramatic to change the equation.

In the case of Ashby a couple of things helped to change the economics. First was the commitment from the local community. In the words of Guy Jarvis, managing director of Nextgenus, there was “an absolute need and requirement to have decent connectivity”. This much was evident from the public meetings in the village hall, which drew the bigggest crowd ever seen, including people from the surrounding villages, he says.

In a few short months between March and May, all but literally one or two home owners had decided to support the project and had signed up for services. “There were four locations that we couldn’t immediately get fibre to because of some issues to do with crossing people’s land, which is something we will resolve over time,” Guy told me.

To help keep costs down, Nextgenus asked the villagers to dig their own trenches for the fibre – an idea that’s already been done in rural Sweden. But this activity was about more than saving money; it’s very much about people actively engaging in the community to make things happen. “It’s about people having an emotional bind to the project as well,” explained Guy. “Everybody remembers the day when they dug across their own gardens.”

But even with this level of local support, the network needed to be larger if it was to be self supporting in the longer term. “What we needed to do was to get into the low hundreds in actual uptake in terms of the total solution, and this is where fibre and wireless comes into it,” said Guy, referring to the decision to connect nearby villages using wireless technologies.

The wireless network, which provides broadband at speeds of around 30Mbps up and down, has brought a further 2,000 homes into the catchment area of the network, of which about 400 have signed up for services. Over time, the links to wireless nodes within those villages will be replaced with fibre, and ultimately Nextgenus hopes, under its social enterprise remit, to reinvest the profits to give everyone a full fibre solution.

It will be very interesting to see how this pans out and whether Nextgenus can extend its model to other communities. I wish them lots of luck – although I hope they don’t need it.

The “FTTH Benefit Compendium” is a new study commissioned by the FTTH Council Europe and carried out by research firms iDATE and Yankee Group, which set out to map the FTTH ecosystem and look at the benefits of FTTH from the different perspectives – including homeowners and building managers, local authorities and utilities, ISPs and over-the-top network service providers.

Despite being present at the FTTH Conference in Lisbon last week when the study was unveiled, I struggled to get the complete picture. Only 15 minutes was allocated to the presentation of this report – an unfortunate necessity in a conference with such a packed timetable.

To put this right I called Benoît Felten, senior analyst with Yankee Group, who presented the study in Lisbon, to ask him about the objectives, the approach, and the key conclusions. What follows is in his own words:

BF: The first objective of the study was to highlight the issues around the perception of benefits: who benefits, who could benefit, who perceives the benefits, who doesn’t? The idea is not to say FTTH is good, or that FTTH brings social or economic benefits – it’s a much more down to earth thing. We need to be able to say, as a telco this is what you can expect in terms of benefits; as a landlord this is what you can expect; as a consumer this is what you can expect; as a whatever… this is what you can expect. We tried to address all of the players in the ecosystem, with the conscious exception of the vendors.

The final output of the report is formed around two questions: who misperceives the benefits and needs to be corrected in order to align them with FTTH deployment, and which inhibitors are out there that need to be countered.

For example, right now in countries like France or Sweden or the Netherlands, we see that landlords are blocking the way. They are absolutely slowing things down because they don’t understand what’s in it for them. There’s a ton of horror stories here in France: there’s a telco in Marseille who was getting so frustrated they actually gave the landlord some cash to get access to the building. The next day they had 50 calls from 50 landlords to say well if you give me the same cash you can get into the building. Suddenly the cost of wiring the building has gone up by 20% because of this one move.

The irony is that landlords have absolutely clear interests in doing FTTH because the value of their property goes up. There are service environments emerging in Sweden around services for the landlord. The crux of the problem is how you address the landlord as a customer rather than as a barrier. If you are in combative relationship, it’s never going to be easy. But if you can say we’ve done this calculation and you could save 20% of your operating costs every year in managing the building because we’re bringing fibre in there, why would the guy refuse?

I only highlighted three of the key messages [in my presentation in Lisbon], but there are probably five of them, and then there’s a ton of smaller things which are worth looking into.

There is a parallel aspect of the study, which deals with services. We keep talking about all of these services that could come on fibre but we’re not really justifying why they require fibre for the most part. So the idea was to have an outlook on what these services could be, when they could emerge, what level of connectivity we think they will require and why.

The report analyses services using a three-point matrix for each service: download, upload and latency. We said, well may be this service doesn’t require a lot of download, but it requires low latency – that would be the case for cloud computing, for example – and actually the level of latency it requires would be hard to deliver without at least FTTC and probably FTTH. For each service – there were eight – we went through that kind of reasoning.

The second part of the service aspect of the study was to highlight some of the revenue streams that might arise from these services. A lot of people assume that any revenues would be for telcos and we wanted to break that perception because it’s not true. In fact, this is actually becoming a core question for telcos. It’s not about which revenues can be derived, it’s about which revenues will be theirs ultimately.

We also tried to distinguish between the revenue streams for some services. In video communication, for example, we have two distinct revenue streams. One says the telco is providing the service, the other says a Google-type company is providing the service.

Looking at it from the telco’s point of view – and I’ve talked to probably 20 of them in Europe about this – the question that comes back again and again is this: if I provide 100Mbps symmetric service, why would the customer use my in-house video if he can just get it over the internet for free? It seems to me if we can’t answer that question, then the frankly slow industry dynamics that we’ve seen over the last two years are going to continue.

The complete report on the FTTH Benefit Compendium is due to be presented to the FTTH Council Europe at its General Meeting in April.

NGA projects are springing up all over the UK, from high-rise apartment blocks in Wembley to Alston, the most sparsely populated parish in the country. The end result is likely to be a “patchwork quilt” of community networks – a term coined by Brian Condon, director of Community Broadband Networks (CBN), and illustrated in this neat image made by Adrian Wooster, CBN’s chief technology officer.

The “patchwork quilt” is the preferred model of three scenarios describing how NGA might evolve in the UK. The alternatives were “Da Wo” (Big Me), which describes a new world based on one dominant network owner, and “islands of connectivity” a fragmented world with sub-scale isolated networks. Important work is under way at the newly formed Independent Networks Co-operative Association (INCA), and through the COTS (Commercial, Technical and Operational Standards) initiative, which aim to make sure that the UK ends up with the patchwork quilt scenario rather than just “islands of connectivity”.

With the enthusiasm of one still relatively fresh to blogging and the world of HTML/CSS, I thought it would be really cool to turn this into a clickable image map, with each area on the map linking to information about the project. Finally, I’ve found a few spare moments to pull it together. You can see the results by clicking on the thumbnail image of the patchwork quilt.

This is a map of community projects in the main, and so does not include BT’s recent fibre deployments, not Virgin Media’s cable network which is capable of delivering broadband at 50 Mbps or more. I still don’t have information for all the projects, so if you see a good web source about any of the projects, please email me or leave a comment, and I’ll add it to the map.

The image is © Adrian Wooster. I am grateful to Adrian for allowing me to use it.

For a written overview of NGA projects in the UK, I recommend this report from the Communications Consumer Panel.

The results echo findings from a study carried out earlier this year by Ofcom in conjunction with technical partner Samknows, which showed that actual broadband speeds in the UK are also substantially below advertised speeds – and consumer expectations.

According to the report from Telecompaper, the average download speed achieved in the Netherlands is 8.98 Mbps, compared to an average speed offered by the ISPs of 14.9 Mbps. Previous Telecompaper studies found the average actual download speed was 4.95 Mbps in December 2008, and 2.8 Mbps in November 2006. But while speeds have been improving in leaps and bounds, the gap between the service being advertised and the consumer’s experience has been maintained.

The tests were carried out by iPing’s software installed on the consumers’ computers, which automatically checks the speed of broadband. More than 2 million tests on 20,000 users were generated over the three month period from July to September. Owing to the set-up, the speed test checks the actual speed perceived by the end-user, which may include other factors like the wireless connection from the router to the home computer, explains Ed Achterberg, senior research analyst with Telecompaper and author of the report.

Many households in the Netherlands have a broadband connection in the utility closet – a point where services like gas, electricity and telephone lines enter the property. From that point the signal is delivered over a wireless network, and can be affected by the position of the computer in the house, and even by the type of concrete from which the building is constructed, he says.

Alex Salter from Samknows commented:

“I would stress that the only way to accurately measure a broadband provider’s performance is by running tests 24×7 whilst there is no other traffic from the home network. Only then are you actually testing the ISP rather than an individual’s home network, which may be being used by someone else in the house.”

Faster on fibre

One of the interesting things about the Dutch broadband study is that it collects speed data about fibre-to-the-home connections for the first time. Fibre lines achieved the best average download speed in the study by quite a wide margin, 40 Mbps, followed by cable with 14.43 Mbps and DSL with 5.81 Mbps. Fibre and cable also achieved the highest average performance ratios, delivering respectively 62 percent and 65 percent of average offered speeds, while DSL averaged just 55 percent of advertised speeds.

But wait a minute, isn’t fibre supposed to deliver the maximum speed available on the line? In this case it doesn’t appear to, and that could be related to the fact that the tests are performed at the computer. “We know that some providers deliver the maximum speed that is included in the package, but that’s not always received on the PC or desktop,” says Achterberg.

In Achterberg’s opinion, service providers need to be aware that the service they deliver depends on elements in the complete chain, which are outside their control but that impact upon the perception of the performance. Therefore, poor in-home wiring, or a badly positioned router or modem could be the undoing of a fibre-to-the-home users experience.

If you’re Dutch, then you may be interested in the fact that, like the UK study, cable operators seem to come out on top – at least as far as download speeds are concerned (upload and latency were not measured). Ziggo is most likely to provide speeds close to those advertised in the low-end segments of 0-1.5 Mbps and 1.5-3 Mbps, as well as in the 6-12 Mbps segment, according to the study. Meanwhile, UPC was most likely to deliver at high speeds, coming first in the 12-24 Mbps, 24-48 Mbps and 48+ Mbps segments, and tying with Tele2 for the best performance in the 3-6 Mbps segment.

This story also appeared on www.samknows.com.

Gauthey is uniquely qualified to talk about public investment in broadband networks. Before joining the giant optical equipment vendor, she was a member of ARCEP, the French telecoms regulator, and prior to that was responsible for regional digital development strategy at government-owned bank Caisse des Dépôts.

Eight years ago France was seriously lagging behind in broadband adoption, she says. The EU regulation on local loop unbundling (LLU) had just come into force, requiring France Telecom to allow other operators access to the copper cables that run from the customers premises to its telephone exchanges, but this had failed to stimulate broadband competition. France is a very rural country, and expanding their networks into low-density areas of population simply wasn’t looking attractive to alternative operators.

Realizing that market forces alone would not provide the level of broadband adoption that it desired, the French government decided that the Caisse des Dépôts could provide loans at reduced rates to local authorities for broadband development. But these loans had strings attached — local authorities could invest in broadband infrastructure, but were not allowed to act as telecommunications operators.

Local authorities were getting impatient with the market; they wanted to step in and invest, but they weren’t allowed to. In 2003 they eventually they got their own way when the French Parliament passed a new law enabling local authorities to be wholesale operators, and even retail service providers if there were no other available broadband providers.

As a result, a little over €2 bn was invested in local authority projects, mainly in fibre backhaul — the networks that connect local telephone exchanges to the national backbone. About half the money came from the public sector, the remainder from private investment.

In each project the local authority partnered with the wholesale arm of a second-tier telecoms operator, setting up a délégation de service public — what we would call a public-private partnership. Critics of the scheme thought that it would result in small, scattered operators, but in fact there are only four or five operators of these local authority networks, according to Gauthey. SFR set up LD Collectivités, Free set up Axione, Axia set up Covage, and so on.

Impact assessment

At the end of 2008, ARCEP was asked to provide an assessment of the impact of the local authority projects. 86 projects had been initiated, mainly by départements, of which 53 are currently running, covering roughly two-thirds of France.

Gauthey believes that the local authority investments achieved what they set out to do — enabling more cost-effective broadband coverage in medium and low-density rural areas. The evidence is in ARCEP’s data, which shows that LLU surged when these new backhaul networks were built; about 37% of central offices have been unbundled through the use of local authority backhaul networks.

There was also a positive impact on the uptake of mobile broadband, says Gauthey. “France issued mobile broadband licenses while I was at the telecoms regulator, and the only places where this worked were where the local authority backhaul was available,” she contends.

Local authority backhaul has also had an economic benefit for local businesses because it fostered the creation of profitable retail service providers dedicated to smaller businesses and local enterprise. “We had a problem that small companies were not very much on the internet,” Gauthey commented. “Now these companies are the ambassadors for taking up of internet services by SMEs.”

The best part? Backhaul networks are a future-proof investment that will continue to provide value as France tackles an even greater challenge: how to use public money to accelerate the deployment of high-speed broadband and next-generation access (NGA).

Speaking of NGA, recent reports say the French government has decided to invest €2 bn in fibre-to-the-home projects. A formal announcement is expected in December

“Backhaul is the bane of our life. One, we can’t get it, and two, we can’t afford it,” said Kevin Wood, team leader for Cybermoor, a community network in Cumbria. Cybermoor currently has around 360 users on a wireless network sharing 5 Mbit/s of backhaul. “We’ve got a very clever bandwidth management package that keeps most users happy,” he added, “But we’ve decided that if we’re going to put new kit in, we can’t carry on like this.”

A three-year service provider contract to establish 10 Mbit/s of backhaul capacity would cost £295,000, according to Wood. Instead, Cybermoor has decided to install its own microwave backhaul link. This involves raising a new 25-metre-high mast, and putting in a relay station in order to reach the network of neighbouring County Council Northumberland. “It’s quite a lot of work,” he adds, proving himself to be master of understatement.

Even FTTH networks in the UK appear to have backhaul bottlenecks. West Whitlawburn is a housing co-operative that has installed fibre to a new-build social housing estate in Glasgow; it has just been given the go-ahead to extend its network to six existing high-rise blocks on the same site. The fibre network has around 100 subscribers, which probably makes it the largest FTTH network in the UK (BT’s FTTP pilot site at Ebbsfleet is believed to have around half that number of end-users). All 100 homes on the West Whitlawburn network are being serviced by a 20 Mbit/s bonded-line DSL connection, although an upgrade to 100 Mbit/s should be complete in the next few weeks.

Lack of backhaul capacity has other ramifications. “Until you get decent backhaul, you don’t have to worry about open access. Service providers aren’t going to want to offer their services on your network if they have to pay to get to it,” said Jez Willcox, senior network consultant for Allied Telesis, the firm supplying new Ethernet equipment for Cybermoor’s upgrade.

“We’re putting 100 Mbit/s into houses, we shouldn’t be in the position where we’re struggling with 10 Mbit/s of backhaul,” he concluded.

The discussion kicked off with one of the key questions facing potential community networks: what are the people in the community going to use the network for? The answers included the usual suspects: telephone, broadband and TV. Optional extras were a community-focused website, telehealth (monitoring heart patients remotely was given as an example), femtocells (a mini base station that picks up your mobile phone signal and pipes it over the broadband connection to boost reception at home), community video surveillance and smart metering.

The “killer app” in this myriad of possibilities is simply reliable broadband. (There’s a talk tomorrow about this, and the dangers of over-engineering the network with so-called value-added services.) The greatest demand for community networks comes from people who can’t get basic 2 Mbps broadband. However, the additional services can be an incentive for a public body such as a school or hospital to get involved, which creates a new source of income for the network, and a stronger social argument for obtaining funding.

The next piece in the puzzle is community engagement. A small but dedicated team will be needed to establish the viability of the project. The teams that have the greatest chance of success are those with a champion, someone who is absolutely passionate about the project, and has been there from the beginning. The rest of the team needs a variety of skills: accountant, lawyer, technical, marketing and communications, and market research.

Getting the support of the wider community is also key to success: not only does the business case depend heavily on getting end-users to sign up, landowners, local authorities and others need to be on-side when it comes time to roll out the infrastructure (more on that later).

Before that comes the planning stage. Good data on the copper access network is available from www.samknows.com, which can be combined with maps and other statistics to help build up a picture of the community’s requirements, says Adrian Wooster, technical director of CBN.

It’s important to understand the community, how many people there are, where they live, who they get their existing telecoms services from, and how much they’re prepared to pay; but asking the right questions can be tricky. “If you make it too easy for people to say yes, then when you need to get money out of them, [they’re not interested] and then the business model falls apart,” Wooster said.

Rutland Telecom, a small telecoms company that does sub-loop unbundling (installing its own equipment in a streetside cabinet), overcame this problem by asking customers for a deposit, which was held in escrow until the network became operational. “50 people [in Lyddington] gave us a deposit,” said Mark Melluish, co-founder of Rutland Telecom. “We made it pleasant, booked an evening in the village hall, provided canapés, and asked people to bring their chequebooks.”

Talk then turned to funding from a variety of possible sources, starting with the EU’s €1 billion for broadband, through national and local government, charities and the national lottery, banks and benevolent individuals, ending with the community itself, through a community shares program.

There were conflicting views on the subject of state aid. “It’s not a big deal to put public money in providing you have the right financial structure and the right network structure [open access],” said Steve Spillane, a director of CBN. But John Lloyd from Carmarthenshire County Council pointed to the FibreSpeed project to connect up businesses in Wales: 6 years, 11 months and 3 weeks were “spent arguing between lawyers and the Assembly in the EU”, and that’s why the project has progressed so slowly. It was planned in 2002; seven years later only four business parks have been connected. Others thought that now the precedents for public funding of fibre networks had been set, future state aid approvals would get processed much faster.

The final challenge in the pre-operational phase of the network is the actual network roll out. (Presumably somewhere along the line, a decision has to be made about what technology to deploy, but this fell outside the scope of the workshop.) Kevin Wood, team leader for Cybermoor, which is connecting a school into its network using fibre, described “how to dig holes and fill them in again” – in Cybermoor’s case they trained a local contractor, who was able to deliver the service much more cheaply than the national average. The technology for digging in the fibre or duct is well established, the problematic parts are planning the route, obtaining permissions and wayleaves, and dealing with unforeseen obstacles, says Wood.

I’d like to thank INCA for inviting me to NextGen09.

Five countries have amended their rural development plans to take advantage of the extra funding for broadband. They are Austria (€15.0 million), Cyprus (€0.9 million), Finland (€24.6 million), Italy (Toscana and Sardegna regions, together €11.3 million), and the UK (Northern Ireland region, €1.4 million). Grand total: €53.2 million.

Meanwhile, the European Investment Bank (EIB) has approved two loans for the deployment of next-generation access networks using fibre-to-the-home in Portugal. Incumbent telecoms operator Portugal Telecom will receive €100m, and cable TV company ZON Multimedia will receive an identical amount of €100m.

In a statement, the EIB says that “by supporting both the incumbent operator and its chief competitor, the EIB not only contributes to a substantial upgrading of telecom services in the country, but introduces a healthy degree of competition in the Portuguese telecoms market.”