The Long and

Winding RoadBrough Turner

Senior VP & CTO

VoIP over FTTH

Newton Corner Fiber Project

� 78 homes mixed 1- and 2-family neighborhood

090+% participation along deployment route

0Community organization - volunteers

0Commercial contracts for all outside work

� Ethernet over buried multi-mode fiber

April 2003 Slide 2

� Ethernet over buried multi-mode fiber

0Fiber, construction and 100 Mbps equipment costs less than $2000 per household

0130 days from construction start to live service

� 45 Mbps link to the Internet

0Monthly service cost: $24 per household

Sorry, April Fool’s Day...

but

� Similar project in Ulmea, Sweden completed in the winter of 1999-2000

0Buried fiber (and coax and 6 twisted pairs)

060 out of 62 single-family

April 2003 Slide 3

060 out of 62 single-family homes participating

010/100 Mbps electronics

066 MHz link to Internet

� Costs per household

0one-time: <$2000

0 recurring: $10/monthhttp://mg0703.ersboda.ac/tomas/mattgrand/index.shtml

VoIP Today

� We’ve won the battle for Mind Share!

But...

� 89% of international traffic is still TDM

� Most local voice traffic circuit-switched TDM

April 2003 Slide 4

� Most local voice traffic circuit-switched TDM

� Most installed PBXs are circuit-switched TDM

0 In 2002: 82% of new PBXs were not IP-enabled

� All mobile voice services are circuit-switched

� Convergence will be a twenty year process

� with substantial progress in next few years

Mind Share is Important

VoIP Adoption

70

80

90

100

April 2003 Slide 5

0

10

20

30

40

50

60

70

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

We’re about here

VoIP

A Product, Not a Service

� Remember Federal Express ZapMail?

0New (1984), fast (2 hour) document delivery service based on Group 4 Fax, but

0People purchased their own Group 3 Fax machines

0G3 Fax leveraged the existing telephone network

April 2003 Slide 6

0G3 Fax leveraged the existing telephone network

� VoIP telephony will become a product, not a service, eventually...

0Utilizing the Internet, and evolving Internet directories (like ENUM)

0Accessing old phones via gateway service means long transition interval...

Boring VoIP

� IP telephony being treated as an incremental improvement

0Better cheaper telephone service

� Internet has been disruptive everywhere else

April 2003 Slide 7

� Internet has been disruptive everywhere else

0Email

0World Wide Web

0New approach to community, identity & information

Why should telephonybe any different?

Disruptive VoIPPush-to-Talk Voice Instant Messaging

� Don’t try to compete with Nextel

0Focus on teenagers

0Test it with gamers

0Combine with ideas on my next slide...

� Drive device technology to best leverage

April 2003 Slide 8

� Drive device technology to best leverage available service infrastructure

0 in support of disruptive uses

0Test clients for PCs, Palm, Blackberry & other WLAN devices, and 2.5G/3G mobile handsets

0Focus on a device offer, not a service offer

Disruptive VoIPAlways-On Workgroup Conferences

� VoIP microphone always on-line to a word-spotting speech recognizer

0“Hey Brian are you there?”

0Recognizing “Brian” causes the spoken phrase to be forwarded to Brian’s handset and an immediate

April 2003 Slide 9

be forwarded to Brian’s handset and an immediate conversation to ensue

0Half-duplex, and 1 second latency is OK!

0VoIP can work well today

� Has the potential to redefine what we mean by telephony...

� a.k.a. the Star Trek Communicator

Historical PerspectiveEarly British Railroad Development

� RR construction authorized by Parliament*

0Miles of track; Capital in millions of pounds sterling

Year Miles Capital Year Miles Capital 01833 218 5.5 1842 55 5.301834 131 2.3 1843 90 3.9

April 2003 Slide 10

01834 131 2.3 1843 90 3.901835 202 4.8 1844 805 20.501836 955 22.9 1845 2,896 59.5 01837 543 13.5 1846 4,540 132.601838 49 2.1 1847 1,295 39.501839 54 6.5 1848 373 15.301840 0 2.5 1849 17 3.9

01841 14 3.4 1850 4.1 70.4

* Andrew Odlyzko, U of Minn., private correspondence

3000

4000

5000

Mileage

Long History of Techno Bubbles

Overinvestment and Crashes

April 2003 Slide 11

0

1000

2000

1833

1835

1837

1839

1841

1843

1845

1847

1849

Mileage

Railways authorized by British Parliament (not necessarily built)< http://www.dtc.umn.edu/~odlyzko/talks/index.html >

19th Century British Railroads

� Investor attitudes in 1840 & 1850 were extremely negative, but ...

� More than 70 years of steady traffic growth

0depressions had only slight effect on growth rate

Cycles of financial investment

April 2003 Slide 12

� Cycles of financial investment

0“Irrational exuberance” to near zero investment

0Many bankruptcies, but…No serious interruption of service!

� Over long term, many fortunes were made

0and some were lost

Internet Backbone Traffic in U.S.

� Roughly doubles every year (90% in 2002)

� Consumer getting some Moore’s law benefit

100000

1000000

TB

/mo

nth

(in

De

c)

April 2003 Slide 13

� Where do we focus to best advance VoIP ?

1

10

100

1000

10000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Traffic (low est.) Traffic (high est.)

TB

/mo

nth

(in

De

c)

Based on data from A. Odlyzko, U of Minn.

Access is the Bottleneck

Internet

& other

Voice

E-Mail

Broadband

1000-to-1 disconnect !

April 2003 Slide 14

& other

Public IP

Services

ERP

Sales

Finance

Video

Ethernet

LAN

Switches

Broadband

Modem

or

Access

Gateway

Gigabit Ethernet

10/100/1000 Mbps

Ethernet

Enormous Long-

Haul Bandwidth

Local Loop

1.5 Mbps ?

100

120

140

160

180

200

Broadband Adoption Rates -

Outpacing Cellular Adoption Rates

Co

nn

ectio

ns (

mill

ion

s)

April 2003 Slide 15

0

20

40

60

80

100

2001 2002 2003 2004 2005 2006

United States Western Europe Asia Pacific Rest of World

Source: IDC, January 2002

Co

nn

ectio

ns (

mill

ion

s)

Obvious Vested Interests

� Traditional telco sells voice services

0email and web browsing represent new revenue, but VoIP threatens voice revenues

� Cable company makes money on TV

0email and web browsing represent new revenue

April 2003 Slide 16

0email and web browsing represent new revenue

0VoIP could be a new service (at telco prices)

� Wireless service providers sell voice mobility

0 looking for data services where they can “capture the added value”

0browsing by the kilobyte, if at all

The Real Problem

First Mile Right-of-Way

� Many long distance right-of-way alternatives

0 just look at all the national and international backbones that have been built

� Limited space in local rights-of-way

0part of justification for original telco monopolies

April 2003 Slide 17

0part of justification for original telco monopolies was reduced overhead wiring clutter

0already have water, sewer, electricity, gas, phone & CableTV organizations digging the street…

0 long, and different, regulatory history for each

� Fiber could replace both phone and cable TV

0big, big, long and nasty fight ahead...

Photo by Dr. William T. Verts, http://www-unix.oit.umass.edu/~verts/things/things.html

What Do I Want?

� User ownership, or control, of first mile fiber

0 from my house or business to an aggregation center where alternate IP service providers are available

How might we get there?

April 2003 Slide 18

� CLEC access to first mile right-of-way

0on equal terms

0 if nothing else, biz & home owners partner with CLECs for local fiber builds and fiber maintenance

� Municipal provision of first mile fiber

0 fiber only, to aggregation center where competitive carriers are available

Interim Alternatives

� Ethernet & other Layer 2 services

0To aggregation center with competitive ISPs

� Wireless bypass !

0WLAN volumes driving prices down performance up

April 2003 Slide 19

0Vivato WiFi switch & directional antenna provides 33 Mbps over 4 km outdoors; 50 km pt-to-pt

0Higher capacity links costly, but available

0Meshes are robust way to connect many parties back to a few fiber access points

0Unlicensed spectrum simplifies local user and community activities

Image © Telex Communications, Inc. (www.telex.com)

Regulatory Competition

� The Internet is global

� Regulation is national, regional and local

0From the EU regulators in Brussels to local city governments controlling local rights-of-way

Threaten politicians: “others are ahead of us”

April 2003 Slide 20

� Threaten politicians: “others are ahead of us”

0Korea and Japan lead US in broadband per capita

0Asia and Europe lead US in cell phone services

� Is it enough? to get fiber to my home???

0Time will tell

� Meanwhile, I’m looking into wireless bypass...

Enormous Opportunity Ahead

� Continuous gains in underlying technology

� 6B humans, 2B phones

� Convergence means replacing today’s phones

VoIP Adoption

30

40

50

60

70

80

90

100

We are here

April 2003 Slide 21

replacing today’s phones

Substantial, long term, worldwide growth!

Significant positiveimpact on humanity

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10

20

30

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