Lightwaves at the end of the telecom tunnel?

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Lightwaves at the end of the telecom tunnel?
Nordunet Annual Conference Reykjavik, August
24th 2003
Yves Poppe Dir. IP Strategy
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Agenda

• Evolution of Transoceanic Internet Capacity
  Demand and Supply
• Aftermath of the Great Telecom Storm
• The RE World Sees More and More Light
• Next (Light)wave of Opportunities

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The pitfalls of predictions and forecasts
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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
Atlantic155mb was earmarked for dataEngineering
estimated 17years to fill the cable
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Cantat-3 and RE 1995-1998
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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.
• RE 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.

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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 1Q0
  1
• TyCo Global Network 2,560 Jun02
• Apollo (CW)
  3,200 Feb03
• 
  Total 12,160Gbps!

Lit capacity early 2003 2,338Gb (source
Telegeography)
Design capacity Cancelled, AC-2
joining Level 3
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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
• 
  Total 6,980Gbps

Design capacity april 01 Tycom
joins FLAG aug 01 FLAG withdraws, Tycom
continues alone RFS postponed project
dropped
Lit capacity early 2003 1,043 (Telegeography)
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Transoceanic buildout frenzy completed

• With the activation of the CW Apollo
  transatlantic and Tycos 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.

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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 Intl bandwidth report
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Congratulations Iceland !
FARICE 40 gig at RFS 640 gig design RFS jan
1st 2004 Ready to participate in lambdaswitching!
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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?

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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 CW
activated the first Cantat between New Foundland
and Scotland with a capacity of 80 telephone
channels. Cantat1 was retired in 1986
From the Bill Glover cable stamp collection See
http//www.atlantic-cable.com/
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Disruptive capacity growth?
It happened before
Borrowed from The Underwater web, Smithsonian
Institute http//www.sil.si.edu/Exhibitions/Underw
ater-Web/uw-credits.htm
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Agenda

• Evolution of Transoceanic Internet Capacity
  Demand and Supply
• Aftermath of the Great Telecom Storm
• The RE World Sees More and More Light
• Next (Light)wave of Opportunities

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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

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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 US300 billion market
  growing at 10 p.a.
• Emulation of get rich quick model by 1996
  purchase of MFS by Worldcom for US14billion or
  6 times the value of assets put in the ground
• Spectacular advances in DWDM technology expected
  to accomodate an insatiable bandwidth demand.

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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!

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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
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Agenda

• Evolution of Transoceanic Internet Capacity
  Demand and Supply
• Aftermath of the Great Telecom Storm
• The RE World Sees More and More Light
• Next (Light)wave of Opportunities

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The RE world savours the bandwidth glut

• Happy days for the RE world
• Europe Geant goes 10 gig, some NRENs also
• North-America lambdas 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, lambdas still have to wait a while.
• Europe-Asia remains a bottle-neck however.

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North-American RE lambda initiatives

• Canada
• Canet4 Canarie federal RE network
• RISQ Quebec
• ORANO Ontario
• BCnet ORAN British Columbia
• USA
• NLR (National Lightrail) CENIC, Cisco, Level3
• Fiberco Internet2 with Level3
• USAwave SURA with ATT
• Teragrid
• DoE ultrascale initially ORNL Sunnyvale -
  Chicago
• Abilene 2nd gen

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USA regional RE 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)
• Ohio (Third Frontier Network)
• Oregon
• SURA Crossroads (southeastern region)
• Texas (Star of Texas)

Source Paul Love internet2 Jtech Lawrence,Ka
august 4th
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Transatlantic RE lambda initiatives

• Translight
• Starlight Eurolink -UIC
• Netherlight SURFnet
• DataTAG/CERN
• Canarie
• 10 gig triangle Chicago-Amsterdam-Geneva and
  Canet4 10 gig to NY and Seattle

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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.

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Agenda

• Evolution of Transoceanic Internet Capacity
  Demand and Supply
• Aftermath of the Great Telecom Storm
• The RE World Sees More and More Light
• Next (Light)wave of Opportunities

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The optical future has already started

• Will it lead to an all-optical future?
• Will Moores 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?

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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 US20 to
  40 billion. US12.5 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.

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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 VPNs 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.

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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

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Thank you for your attention