New broadband services: the demand for reliable and guaranteed-quality connections

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1 New broadband services: the demand for reliable and guaranteed-quality connections WIK conference on Fibre Networks: Demand and analyses of costs and benefits June 6 7, 2011, Berlin

2 2 Dutch discussion on (local) government role in roll-out of next-gen networks NGN demand and supply Taskforce Next-Generation Networks, March 2010

3 3 Dutch discussion on (local) government role in roll-out of next-gen networks NGN demand and supply Transparency about net neutrality Open access to NGN networks

4 4 Presentation outline Increasing demand for bandwidth can be met by migration and roll-out of DSL, cable and FttH networks in the Netherlands Broadband is more than just bandwidth, especially for new services from other sectors Coverage Quality Open access Further development of Managed service lane for services requiring more than best-effort bandwidth

5 5 The Netherlands enjoy a well-developed broadband infrastructure 98% of households can get 30 Mbit/s 2011 (source: digitale agenda.nl by Dutch government) (source: EC, 15 th implementation report) 90% of households can get 100 Mbit/s

6 6 Expectation: demand for bandwidth grows exponentially 30-40% increase per year Conservative estimate for fixed network endogenic growth only: Dutch will use the Internet more no exogenic growth: not more Dutch use the Internet (different story for mobile, but focus is on fixed networks here) Video is main driver Decreasing asymmetry Entertainment (YouTube, catch-up TV,..) Other sectors: health, education, relative growth of upstream bandwidth asymmetry moving towards 1:5, compared to 1:10 in the past more data would be useful here

7 7 Comparing supply and demand: FttH en HFC ( cable ) can both meet the growing demand for bandwidth (1) Observation 2. FttH can obviously meet bandwidth demand, but requires substantial investments Observation 1. Wide variation in subscriptions hidden behind numbers for average bandwidth. 2010: Up to 120 Mbit/s available in some areas, but most consumers have less than 10 Mbit/s

8 8 Comparing supply and demand: FttH en HFC ( cable ) can both meet the growing demand for bandwidth (2) Observation 3. HFC/DOCSIS can meet growing bandwidth demand with gradual investments Observation 4. DSL over copper can also meet growing demand, but with larger investments (digging) Without further fiber roll-out, VDSL2 offers insufficient bandwidth for the top segments of the consumer market. But it can still serve the (large) bottom segment of the market for quite some time.

9 9 Presentation outline Increasing demand for bandwidth can be met by migration and roll-out of DSL, cable and FttH networks in the Netherlands Broadband is more than just bandwidth Further development of Managed service lane for services requiring more than best-effort bandwidth

10 10 Other characteristics than bandwidth also determine the value of broadband Coverage parts of population geographical regions timing of migration Open access and competition choice between providers on a given infrastructure? competing infrastructures? Bandwidth peak, sustained (a)symmetry Quality guarantees ping, jitter, reliability (uptime) economical and societal value of broadband

11 11 Broadband needs to support new services from other sectors and not just today s OTT services e-education energy e-health e-security

12 12 Interviews point at other factors than bandwidth as inhibitors for new services (1) Assessment by providers whether the current broadband networks are functionally suitable for the delivery of their services Bandwidth Quality Availability ( uptime ) Security Medical Alert Service ( lifeline ) Smart living services including two-way video Medical monitoring Smart meters Burglar/fire alarm Virtual Class Remote examination Source: TNO interviews with five providers on desired characteristics of broadband connections?

13 13 Interviews point at other factors than bandwidth as inhibitors for new services (2) network requirements perceived need to innovate and provide new services over broadband Medical Alert Service ( lifeline ) Smart living services including two-way video Medical monitoring Smart meters Burglar/fire alarm Virtual Class Remote examination Bandwidth Quality Availability (uptime) Security? existing implementation works fine, no need to act potential for innovation is perceived as low immediate need to deliver new services to consumers over broadband existing implementation is sufficient potential seen for innovation with services over broadband More data would be useful to get a better picture of network requirements and perceived need to innovate per sector and service

14 14 Presentation outline Increasing demand for bandwidth can be met by migration and roll-out of DSL, cable and FttH networks in the Netherlands Broadband is more than just bandwidth Further development of Managed service lane for services requiring more than best-effort bandwidth

15 15 Quality connections needed between providers and consumers service providers Health care provider A Between providers and consumers Security firm B Videoconferencing provider C Between providers consumers Between consumers

16 16 Public internet lane en managed services lane over one broadband connection public internet lane managed services lane VoIP telephony IPTV customer can choose from service providers on global Internet service provider can reach customers all over the world best effort, no quality guarantees customer can choose from services offered by his own ISP external service provider can (usually) not reach customers with quality guarantees

17 17 Public Internet lane: discussion on net neutrality public internet lane net neutrality?

18 18 Can services from other providers benefit from the quality guarantees in the managed service lane? managed services lane managed services lane VoIP telephony IPTV VoIP telephony distance learning e-health IPTV

19 19 distance learning e-health Openness in public Internet is achieved by combination of open access and interconnection open access: service provider can obtain path through network service platform customer terminal DSL Cable Fiber interconnection: networks are linked together distance learning service platform e-health customer terminal

20 20 distance learning e-health Managed service lane shows hardly any open access and interconnection open access: service provider can obtain path through network service platform customer terminal DSL Cable Fiber /? interconnection: networks are linked together distance learning e-health service platform /? customer terminal

21 21 triple play provider Non-operator service providers have a different need: a Virtual Service Connection university health care provider Virtual Service Connection VoIP telephony managed services lane distance learning e-health with desired quality and guarantees over existing broadband access and home gateway in parallel to existing managed services (IPTV, VoIP telephony) IPTV HG PC STB LCD TV

22 22 Today s forms of open access are not suitable for non-telco service providers that do not want to build an own network Service platforms HG HG CPE PSTN Soft switch Access network HG PC STB www IA Router Core network TV studios Satellite Edge Router access to layer 2, linked to copper and fiber bitstream WBA/WEAS separate components: dark fiber, Ethernet links, access to copper Local Loop Unbundling (LLU) Sub Loop Unbundling (SLU) access to fiber ODF access no access to HFC services aimed at operators who want to roll out their own telecoms network

23 23 Virtual Service Connection CPE PSTN Service platforms Soft switch Core network HG Access network HG HG E- PC STB www IA Router TV studios Satellite Edge Router E- platform manage QoS on layer 2 same mechanisms as used for IPTV and telephony today interface can be on layer 2 or layer 3 interface on core network core networks increasingly based on optical Ethernet, so uniform interface for access to DSL, cable and fiber networks

24 24 Introduction of Virtual Service Connection depends on both technical and non-technical factors Technical Operators develop new wholesale service: network dimensioning, systems, CPE Service providers Agreements on sharing of resources in consumers home Organizational Standardization of technical specs and processes QoS classes used in access and interconnection Processes between operators and service providers Agreements on sharing of resources in consumer s home Commercial Business cases for operator and for service providers interaction between different sectors: different strategic considerations? business model: decoupling of service connection and broadband access

25 25 Conclusions Coverage Open access and competition Bandwidth is important, Bandwidth Quality guarantees but not enough Value of broadband Number of cases in which other factors than bandwidth inhibit triple play provider universit y media creator innovation and new services Bandwidth Quality Availability Security (uptime) VoIP telephon y managed services lane distanc e learning connecte d TV Medical Alert Service ( lifeline ) IPTV Smart living services including two-way video Medical monitoring Smart meters Burglar/fire alarm Virtual Class Remote examination? HG STB PC LCD TV Virtual Service Connections and other new forms of access for service providers from other sectors?

26 26 Thank you for your attention!

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