Wednesday, September 2, 2009

My testimony at FCC broadband workshop

[The FCC has been tasked to develop a national broadband strategy and are holding a series of workshops. I was invited to give a short presentation on some of the ideas we have been working in Canada and elsewhere. Here are my speaking notes – Bill]

My presentation and background slides can be found at

Good morning

First all I would like to thank the FCC staff inviting me to give speak at this event and I applaud their initiative in this area. These workshops will be very critical in defining a national broadband vision not only for the US but other countries around the world as well

I am Bill St Arnaud Chief Research Officer for CANARIE

CANARIE is the Canadian equivalent of Internet 2.

Our mandate is a bit broader in that we have been tasked to advance Canada’s telcom and Internet networks and applications

We work closely with organizations like Internet 2, NLR , Educuase in the US and institutions like UCSD

As everyone knows the Internet originated with the R&E community.

Not many people realize however that R&E community is also a major pioneer in new broadband architectures and business models

The R&E community has long experience in operating their own networks national and locally and many university networks are equivalent to those that would be deployed in a small city

New broadband Concepts like condominium networks, customer owned and controlled networks, hybrid networking, etc all started with the R&E community

[First slide]

In my opinion the biggest challenge in developing a national broadband vision is defining a business case

Many people think that government is going to invest billions of dollars in a national broadband deployment

In this era of trillion deficits and near bankrupt state and local governments I very much doubt that governments will be able to make any significant investments in broadband

So we have to look at the private sector as the primary vehicle for deploying broadband

But the business case for private sector to deploy national broadband is also very weak, especially if we want multiple facilities based competitors

I think there is general agreement that multiple facilities based competition is the ideal solution as competition drives innovation, lower prices and more choices for the consumer

But the business case for traditional NGA deployment is very weak and is predicated on 40% takeup and triple play revenues of $130

And of course revenues from triple play are gradually being undermined as video and voice service migrate to the internet in the coming years

Even with those numbers high speed broadband based on fiber will only reach about 40% of customers

So what we need is to experiment with new business models to underwrite the cost of next generation broadband


Some good examples are the “Home with Tails” concept that some Google analysts are advocating where the customer owns the last mile

Another one is Green Broadband where the cost of the broadband infrastructure and service is bundled with the customers’ energy bill, and the customer is encouraged to reduce their energy consumption, while the service provider makes money from the energy bill rather than triple play. There are now several pilots around the world adopting this model

As you may have heard CANARIE has launched a modest Green IT pilot program to help industry and academia capture new business opportunities in this field

Other examples include the condominium fiber deployment in Netherlands being lead by KPN in partnership with Reggenfiber

Another good example is the Swisscom national condo fiber project being deployed in partnership with numerous energy companies in that country

So my number one suggestion to FCC is that they work with R&E community and fund a number of NGA pilots that promote facilities based competition

For more information please see the links on your screen