Next Generation Access
BT/ISPA: 27th July 2007
Agenda – BT’s latest thinking
• Overview
• Bottlenecks & Points of Interconnection
• Complexity
• Risk Sharing
• Flexibility for Trials
Broadband UK:
affordable, available and attractive?
• 99.6% broadband
availability, over 12 million
subscribers
• One of the lowest prices
in the world
• Service and commercial
innovation
• Top of G8, better than mains water
• Vast majority commercially funded
• Infrastructure competition: LLU, cable,
wireless in over 70% of the country
• Even wider set of technologies for
broadcast applications (esp. TV)
• Hundreds of nationwide service
providers with a number of wholesale
providers
• E.g., IP TV, mobile over broadband,
broadband on the move, IP telephony,
hybrid platforms...
• Bundles and packages with wireless,
landlines, software as a service
Ample bandwidth
for the vast majority today?
• Bandwidth and price tend to dominate marketing messages –
“simple” to understand and compare, or is it?
• Typical customer uses much less than ‘last mile’ capacity
– Average bandwidth usage <30 kbit/s
– Peak individual throughput much more constrained by ‘internet’
and servers, peak time of day, also backhaul and core networks
– But some intensive users e.g. streaming SDTV, peer-to-peer file
transfer >200 MB/hour - who pay no extra
• However BT aware of growing public debate and keen to engage
with end customers, Ofcom, CPs and other stakeholders e.g. BSG,
content industry
• With long investment lead-times for NGAs, important to get right
balance between supply-led and demand-led approach and take
account of ongoing technology evolution e.g compression
Where is the last mile bandwidth an issue?
What else drives customer experience?
Need for high
upstream rate as well
as download rate
QoS
Service
level
Best Effort
10 kbps
VoIP
Gaming
Video telephony
Video Conferencing
HDTV
Business
Video-ondemand
???
Internet Access
applications
100 kbps
1 Mbps
Internet Access
Best Effort (e-mail, online
gambling etc)
On-line Gaming
PC, Console P2P
VoIP Communications
(BE PC-PC, off-net PSTN
quality)
Video-Communications
(web-cab to TV, Video calls,
Conference)
TV & Video
VoD download/streamed, SDTV,
HDTV
Business applications
Software as a service, IPCentrex, VPN
10 Mbps
Access (d/s) Bandwidth
Example applications requiring different transmission rates
& Quality of Service
In Confidence
BT’s Access Network
Today
Local
Exchange
Backhaul
E-side
Cables
Street
Cabinet
(PCP)
manual cross-connection
of e-side and d-side pairs
D-side
Cables
Telephone
Pole (DP)
Overhead
Distribution
Customer
Underground
Distribution
In Confidence
BT’s Access Network
Today
Local
Exchange
Backhaul
…some older cabinets are
more challenging!
E-side
Cables
Street
Whilst some cabinets
are modern
Cabinet
and easy to work with…
(PCP)
D-side
Cables
Telephone
Pole (DP)
Overhead
Distribution
Customer
Underground
Distribution
Technology provides a number of options to
‘accelerate’ last mile bandwidth
Bandwidth (Mbit/s)[1]
DownStream
(Headline)
Indicative
DownStream
(Median)
Indicative
UpStream
(Headline)
Indicative
Upstream
(Median)
ADSL – Exchange based 8
4-6
0.8
0.75
ADSL2+ (MSAN) –
Exchange based
24
6-10
0.9
0.75
FTTC - VDSL2
c50
22-25
c24
9
FTTP/GPON
c75+burst
c75+burst
40+burst
40+burst
Broadcast satellite
100s
100s
n/a
n/a
Broadcast terrestrial
digital TV
10s
10s
n/a
n/a
Wireless (HSPA, LTE,
WiFi, WiMax)
10s
1-5++?
<1
<1
BT’s strategy for UK broadband infrastructure
Satisfy the vast
majority of needs
with our existing
copper network
Maximise the performance of existing copper infrastructure
–
Fix the customer experience issues starting from marketing
messages, to selling, provisioning and operating
–
Tackle residual areas of non availability, making it near ubiquitous,
with public funding support
–
Upgrade the current copper based broadband to ADSL2+
–
Develop “hybrid” solutions: broadband, satellite/digital terrestrial,
storage/processing, software
Continue
investment
in core network
Exploit 21CN investment to provide much more throughput capacity at
lower cost; make this a competitive advantage for ‘rich content’ services (TV)
Develop
targeted NGA
solutions
Provide targeted solutions to “NGA” with the best technology and commercial
model in each case
–
Fibre to the Premises in Greenfield development
–
Selective participation in government funded opportunities where
‘state aid’ case is clear.
–
Develop a ‘targeted deployment’ Equivalent proposition
Re-endorse
Equivalence
Actively engage
customers and
stakeholders
Re-endorse the regulatory principles that have served us well to date
(Equivalence in particular, as it drives the risk sharing and volume, both critical
for the commercial case to work) but reflect the “NGA” requirements in the detail
Communicate our plans and rationale openly to manage public policy
pressure ensuring that BT does not get ‘held responsible’ for UK NGA
investment (or lack/delay thereof)
NGA becomes targeted
• Fibre deployment requires a lot of civil engineering
– Requires time and money so inevitably some opportunities will
be captured before others
• NGA investment becoming ‘targeted’
– Where new greenfield sites are built
– Where customers pay
– Where developers or other commercial investors pay
– Where taxpayers pay (with consequences to commercial
investment?)
– ...
How to make targeting fair and effective?
Vision: Targeting NGA to where
customers demand is, Equivalently
New
technology
solution
New
commercial
model
•
Fibre To The Cabinet (FTTC) solution evolution
– Typical BT cabinet 300 lines/customers; BT has over 90’000
cabinets
– May need a new powered cabinet required for FTTC; minimum
commercial level of about 80 subscribers may be difficult to
reach (25% of all lines in a cabinet) (assume £10/month
premium); May be simpler/lower cost options as technology
develops.
•
Establish a ‘trigger level’ and prepayment by Communication
Providers to determine where to deploy
Make it possible to deploy ‘anywhere’ but get paid up front to reduce
‘stranded cash’ exposure
Nationwide deployment but BT (and any CP) would have a choice
where to deploy roll-out depending on customer demand
•
•
New point
of equivalence
(Openreach – BTW)
•
Next Generation Access provided by Openreach at ‘Layer 2’ level at
exchange
– Broadband electronics in Openreach
– Minimal difference in the end customer and Communication
Provider interface whether FTTP or FTTC
– Review of the operationally and commercially difficult
sub-loop product currently in the Undertakings
Sub Loop Unbundling vs Wholesale layer 2 service
Sub Loop
Multiple cabinets
Multiple backhaul
Multiple tie cables
<10% of lines accessible*
Wholesale Layer 2
Shared cabinet
Shared backhaul
Shared tie cable
>80% of lines accessible*
* Assumes aggressive commercial model:- high penetration rates, additional revenue, multiple CPs
Analysys report for OPTA, Jan 07
conclusions on Sub loop
“the use of SLU by an alternative provider is not economically
viable as an alternative to continuing to use LLU…..we estimate
that a business case for SLU would require both:
– a market share greater than 55% of all broadband lines
(including cable) in all areas served
– Our highest estimate for incremental revenue (which
assumes an increase in ARPU across all broadband users of
EUR10 per month”
Complexity
• Likely multiplicity of operators owning NGA
infrastructure
• Patchwork deployment
• Range of possible models – including developer-led
and ‘campus’ models
• BT’s SMP and USO not applicable?
• Need for new approach to ensure connectivity and
interoperability – and choice of downstream supplier
• Long Rollout timeline (Civil works)
‘Hiding’ the infrastructure complexity to enable efficient
innovation and competition nationwide
•
•
Common Ethernet
presentation
“Layer 2” and standardised
‘OSS’ to Unify Market above a
limited range of physical media
options
•Fibre to Cabinet –
Brownfield
•Point–Point Fibre – Major
business sites
•Fibre to Premises (GPON)
Greenfield
•Other technologies as built
Fibre and Wireless are
complementary
Openreach
Handover point
End User
External Network
CP1
MSAN
Fibre backhaul
CP’N’
NTE5
D-side
Copper
FTTCab – Copper DSide
CP1
Core
Legacy E-side
SLU
Voice
& Data
T
CP1
CP2
Core
OLT
Pt-Pt Access Fibre FTTP
OLT
PON Access Fibre FTTP
32
CP’N’
CP1
Ethernet
ONT 1
Voice & Data
Ethernet
Split
CP’N’
CPN
Core
ONU
ONT N
Enhanced Backhaul Offers
R
Infrastructure investor x, layer 2
S
Wifi WiMax
2G 3G
CP – Wireless Access
EU – Fixed and Wireless
Next Generation Access Infrastructure
•
•
A mix of Fibre Access Network designs with a unified service offering
A basis for sustainable long-term access network investment
Reaffirming the regulatory principles
and updating the “detail”
•
•
•
•
•
•
Openreach formed to deliver underpinning infrastructure and
Equivalence of Input for all
– Communication providers and BT’s downstream businesses are
equal
– Equivalence should continue in NGA
– Openreach is only successful if the industry as a whole is
successful
Recognising the narrowing reality of ‘bottleneck’ assets in light of
technology and infrastructure competition
Encouraging innovative ways to trial without making commitments to
particular products or roll-out to be available
Symmetric treatment of all investors in new assets
Reviewing the universal service obligations and funding in light of
multiple private and public investors and value chain fragmentation
Stimulation of competition in higher layer network services and
applications on all infrastructure
Investment Risk
• Agreement on need to reflect risk/return
• There are possible options
– Trigger approach with up front payments
– Anchor pricing
– Utility regulation
• BT open to suggestions and keen to explore
alternatives
Flexibility for trials
• Technical trials are essential first step
• May be ‘exceptional’ ‘semi-commercial’ cases where
more dynamic cross-BT working required to develop
feasible ‘real world’ solutions
–
–
–
–
geographically – restricted
involving other CPs
testing demand-led models
will require ‘experimental’ approach
• Need for exemptions?
UK NGA Vision?
Not whether the UK has a monolithic NGA or not, but:
An evolutionary delivery of innovative services at affordable
prices to those who want to buy them, which means:• Responding to real demand
• In a commercially and technically innovative way
• That enables effective downstream competition
everywhere
• And rewards the risk investors take