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Acquisition and deployment of dark fiber within SURFnet

Acquisition and deployment of dark fiber within SURFnet. Walter van Dijk CEF Workshop Prague, 25 May 2004. 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)

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Acquisition and deployment of dark fiber within SURFnet

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  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 @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@SURFnet.nl www.surfnet.nl www.gigaport.nl www.ductstad.nl

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