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Financial

Can Customers Take Back the Network?

SAN JOSE, Calif. -- Enterprises of the world, unite: Hang up on your phone companies and build your own long-distance networks!

Insanity -- or inspiration? At least two speakers at the Opticon 2002 trade show here Tuesday say the latter.

Michael O'Dell, former UUnet chief scientist, maintains it's time telecom customers started thinking about taking their fiber needs into their own hands. What's more, he says emerging ultra long haul technology will help them do it.

Yes, you read it right. That's ultra long haul (ULH), the segment considered by most in the telecom industry to be a dead spot. Indeed, weakness in demand for long-haul gear and its ULH subsegment has been cited as key to a range of recent decisions by various vendors to abandon development in the segment altogether (see Nortel to Cut Ultra Long Haul? and Agere's Exit From Opto: Sad but Sensible).

But O'Dell thinks folks should take another look. "Of the technologies that contain the potential to be disruptive, I think it's ultra long haul," O'Dell says.

In his keynote speech here Tuesday morning, O'Dell held forth that advances in ULH transport systems have made long-distance fiber plants easier to manage and less expensive to build.

O'Dell, now president of Compass Rose Labs, a telecom consultancy, says the "rocket science" that used to make it tough to set up and manage long-distance networks has been built into ULH systems, making it easier to "build [networks] once and back away."

An oversimplification? Probably. But O'Dell's point is that given the glut of unused fiber and simpler long-haul optical gear that can be used to light that capacity, the economics of operating a long-distance data network have changed. To hear him tell it, anyone with ambition and some deep pockets, or any city government with enough resources, can forgo buying network capacity from the nearest incumbent phone company.

"More people will be able to operate a fiber plant, if we all live long enough," he asserts. "The prospect of seeing municipal groups form consortiums to operate long-haul networks is possible. Whether they will, I don't know, but it is possible. The point is that business models that weren't feasible before can become viable with this improved ULH technology."

The telecom industry spends lots of time building technology like wave division multiplexing (WDM), which lets several pieces of equipment share the same fiber pair, O'Dell says. Perhaps people, businesses, and governments should stop thinking about sharing and instead start running their own fiber facilities.

Actually such developments are already taking place.

One group of nine local government agencies in Oregon built a metro DWDM network with no help from the incumbent carrier, according to a Tuesday afternoon talk by Dan Mulholland, the telecommunications manager for the Lane [County, Ore.] Council of Governments’ telephone consortium, and Darrell Jones, the lead systems programmer for the Eugene, Ore. regional information system.

After spending about $300,000 on acquiring fiber and a little more than that in equipment costs, the network now serves three school districts, two cities, two public utilities, a county, a community college, a university, and a transportation district, Jones says. The network offers more than 16 lambdas to more than 30 locations along the fiber route.

"The phone companies did nothing in our network," says Mulholland. "And there are plenty of efforts like ours going on elsewhere.... There is a world out there beyond what Qwest Communications International Inc. [NYSE: Q] says or does," he says.

O'Dell, too, was critical of the big phone companies for being slow to act and innovate, likening them to communist agencies where innovation comes from "a Department of New Ideas."

"They're zeniths of centralized planning," he says.

At one point, O'Dell suggested splitting the assets of regional Bell operating companies (RBOCs), leaving their access networks open to competition.

"But listen to me at your own risk," he cautioned attendees. "I'm crazy."

— Phil Harvey, Senior Editor, Light Reading
http://www.lightreading.com
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skeptic 12/4/2012 | 9:54:22 PM
re: Can Customers Take Back the Network? Whether they will, I don't know, but it is possible. The point is that business models that weren't feasible before can become viable with this improved ULH technology
--------------------------

The point he didn't make is that those business
models are only feasible at present because
of overcapacity, regulation and broken pricing
models.

If any one of those three things changes,
the business models he is talking about will
fall apart and anyone making big investments
is going to be left holding the bag (again).

That anyone is still even listening to O'Dell
about anything is a sure sign that recovery
in communications is a long way off.

DarkWriting 12/4/2012 | 9:54:22 PM
re: Can Customers Take Back the Network? The guy with the wristwatch telephone talking to the guy with the can on the end of a string.

DW
photoness 12/4/2012 | 9:54:21 PM
re: Can Customers Take Back the Network? Either a boondoggle ("Let's Play Network Backbone,") or a creative collaborative way to provide much needed services. Is the university going to offer a telecomm cirriculum and get "free" operations support and planning via the constant flow of undergrads excited to play the Oregonian network game? Having spent a good part of my career building NEs, testing and deploying large telecomm networks I can easily say that the fun is yet to come....keeping infrastructure up and running is NOT like keeping a building or campus LAN running....Good luck on this network voyage. Please keep us up to date on it's progress and downtime. Are your customers paying customers?? Are you offering SLAs?
If you have a very very talented group of network
experts it may work for a while...
So many issues, so little thought to planning and running an operation of this magnitude....oh well...Very expensive fun while it lasts...
raypeso 12/4/2012 | 9:54:20 PM
re: Can Customers Take Back the Network? Any kind of organization that has a few campus locations can make this work. It's going to take a lot more knowledge than the typical company's computer guy has. I think I'd like to see more of this though. It would increase the demand for my skill set and give more options of who to work for. I wouldn't mind taking care of a small metro ring.
BTDT 12/4/2012 | 9:54:17 PM
re: Can Customers Take Back the Network? Michael O'Dell was the one who drove the 8 x capacity requirement projection at UUNet, which can arguably be seen as the root cause of the telecom crash. If not for his 'authoritative' projections, a lot of venture money would not have been spent on ULH development, much less on start up long haul carriers, many or most of whom are in or verging on bankruptcy, including WorldCom.
Isn't he also the one who said long haul transport capacity is 'free'?
optigirl 12/4/2012 | 9:54:12 PM
re: Can Customers Take Back the Network? Have heard the show is really sparse this year. Can anyone confirm how the head count looks?


geof hollingsworth 12/4/2012 | 9:54:09 PM
re: Can Customers Take Back the Network? I got the following e-mail this morning (from a frequent poster on this site).

...I'm down here in San Jose at the Opticon
event, which is about as sad as this whole market. Hardly anyone here. ...

cessna 12/4/2012 | 9:54:07 PM
re: Can Customers Take Back the Network? the reason he is touting ultra long haul is because he is probably sitting on some shares that he got being on the advisory board of sycamore and the like...
sigint 12/4/2012 | 9:54:04 PM
re: Can Customers Take Back the Network? Skeptic:
The point he didn't make is that those business
models are only feasible at present because
of overcapacity, regulation and broken pricing
models.
__________________________________________________

True enough, and I'm no fan of O'Dell, but ..

If corporates do buy dark fiber, they can actually help push up the price of that "commodity".

When the telecom recovery happens, individual corporations with fiber can lease out lamdas to other interested parties, may be with some involvement of carriers.

I know, this would be a serious blow to the "core competency" paradigm, but doesn't it sound feasible ? It's somethign like renting out one's own office space or parking lots.

As in any other business early movers would have an edge.
DoTheMath 12/4/2012 | 9:54:03 PM
re: Can Customers Take Back the Network?
I don't know O'Dell's reputation, but the idea must be evaluated on its merit, not based on who said it.

I think such customer owned or customer leased fiber is a good idea, at least within the metro, and progressively in the long haul. The central planning cycles of telcos don't mesh with the rapid progress of technology. Frankly, $300K for dark fiber lease is NOT a lot of money for a lot of corporations, including even smallish companies with a few hundred people. After all, they spend several times that money on PCs, LAN etc.

The problem paying that $300K in installments to your telco is that they move so slowly, and they get you stuck with their legacy.

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