Wholesale:
The Next Generation
Post Hearing Final Reply
21-JUN-2010
CRTC
Notice of Consultation 2009-261
Proceeding to consider the appropriateness of
mandating certain wholesale high-speed access services
Jean-Francois Mezei
Vaxination Informatique
jfmezei@vaxination.ca
Montréal, Québec
21-Jun-2010
Vaxination Informatique
21-Jun-2010
2009-261 ADSL-CO Final Reply
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Table of Contents
Introduction....................................................................................................................3
Boldly going where other regulators have gone before........................................................................3
Dealing with distractions...............................................................................................4
The NGN buzzword.................................................................................................................................4
Mandated access and IPTV......................................................................................................................5
Negotiation versus regulation...................................................................................................................6
Access to the last mile....................................................................................................7
CO-Based DSLAMs are no longer viable................................................................................................7
Unbundled sub-loops are not viable. .....................................................................................................7
Mandating access to incumbent's last mile..............................................................................................8
What level of aggregation ?........................................................................................9
Appendix 1................................................................................................................. 11
About Walk In Closets............................................................................................................................ 11
Appendix 2................................................................................................................. 12
About Multicasting.................................................................................................................................. 12
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Introduction
1.
Vaxination Informatique submits its final reply in the 2009-261 process.
Boldly going where other regulators have gone before
2.
The "light regulatory touch" approach failed to will the "facilities based" concept into reality. And
in recent times, Bell Canada has increased both rhetoric, and actions against such movement; for
example, its petition to the Governor in Council against equal speeds.
3.
Forging ahead with a new viable competitive wholesale architecture will require a bolder move from
Commission and perhaps the government. While a bold move may cause grumbling to be heard from
160 Elgin, it is required to restore a competitive environment. The state of the competitive access is
such that drastic action is required to save it, and it is required soon.
4.
Many countries have realised the importance of having open access to infrastructure in order to allow
competitive services to emerge and succeed. Australia is the latest to have announced a bold move to
kick start the process which Telstra had resisted. ( Goto http://nbnco.com.au for the company created
to implement the Australian National Broadband Plan.)
5.
With the rapid loss of GAS' competitiveness in the last 3 years, there is now a sense of urgency in
not only ensuring a competitive ISP environment can be recreated in Canada, but also finding an
implementation plan that moves ISPs from the current GAS regime to the new one in the shortest
possible time and with the least amount of disruption.
6.
It must be repeated that the incumbents (cable and telco) control nearly 94% of the market. Despite
their claims that there are plenty of competitors, incumbents refuse to accept that with 94% of the
market, they have an undeniable and overwhelming dominance on the market. Oh, and by the way,
someone should tell them that since the major wireless operators are owned by the incumbents, they
are part of the 94% market dominance exerted by incumbents. They are not competition.
7.
With such a sad state of the competitive environment, if there are any grey areas in terms of
interpretation of 2008-17 or policy directives, it is the interpretation which fosters small competitors
which should prevail. Recreating a regulatory framework that fosters competition must be seen an
urgent priority.
8.
A bold "made in Canada" solution is required quickly to jump start the competitive
environment before it is too late.
Forging ahead
9.
In building a new wholesale architecture, there are 2 main issues upon which the Commission must
decide:
• Access to homes from a CO using whatever technology is current.
• Level of aggregation between each of the 400+ Central Offices and each of the roughly 130
current GAS customers/independent ISPs.
10.
This document will first deal with some of the distractions generated by Bell Canada to try to prevent
forward movement. It will then focus on the above 2 issues.
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Dealing with distractions
11.
During the public hearing, Bell Canada's arguments against a solution can be summarized in these 3
major points:
• Bell Canada's so called NGN
• Mandating access costs Bell Canada opportunities to sell IPTV
• As Bell Canada is fully willing to negotiate, the regulatory route is not needed.
The NGN buzzword
12.
Much time was wasted at the hearing debating the definition of "NGN". The actual definition doesn't
matter because at the end of the day, Bell Canada is not in the business of maintaining redundant
obsolete infrastructure. It is in the business of constantly upgrading its systems to remain competitive.
Once customers have been migrated to an upgraded system, it makes no business sense to continue to
spend money to maintain the old non-competitive one which is no longer generating revenues.
13.
The use of overlays to deploy new infrastructure is meant to ensure customers are not affected during
construction and that they can be smoothly migrated to the new system. The coexistence of the two
systems is not meant to be long term. Thus, from a regulatory point of view, the Commission must
consider NGN to be a replacement of an obsolete system instead of its duplication.
14.
In a bid to make it look like old infrastructure is being duplicated instead of replaced, Bell Canada
stated that it had no plans to remove the old legacy obsolete infrastructure. This should really be
interpreted as "Bell Canada's plans to remove the old infrastructure have not been finalised yet".
15.
Even if Bell Canada postpones the decommissioning of legacy infrastructure to maintain the illusion of
duplicability, it does not detract from that fact that said infrastructure has already been obsolete for
many years and cannot be used by wholesalers to provide modern competitive services.
16.
In paragraph 7345 of Day 4 of the transcripts of the hearing, Mr. Mirko Bibic confirms that Bell
Canada began FTTN deployment in 2004. Why did the NGN buzzword and argumentations not
begin in 2004 during the debate on how/whether the ADSL service should be regulated by the CRTC ?
17.
Bell Canada even increased ADSL speeds for GAS at least once after starting its FTTN deployment.
One of Bell Canada's so called NGN remotes. The middle portion is the JWI (jumper wire
interface) with 2 DSLAMs on the side.
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Dealing with Distractions
Mandated access and IPTV
18.
Bell Canada argued that mandating wholesale access to its NGN would prevent it from selling IPTV to
those customers, reduce its revenues, force it to reconsider its investment strategy. Yes, during the march
interrogatories, Bell Canada replied that it has not considered the possibility of providing white label
resell of its IPTV service to independent ISPs. If IPTV revenues were so important, how come Bell didn't
look at this opportunity to raise average revenue per DSLAM port ?
19.
It was already shown during the hearing that Bell Canada's own modems are perfectly able to
support the provision of Bell Canada's IPTV service alongside a GAS (or its replacement) service to a
wholesaler. The Cellpipe 7130 from Alcatel Lucent is and off the shelf device which is customisable.
Adding your logo and customising menus does not make the chipsets incompatible.
20.
The VDSL2 standards are established and with time, there may be a large market of competitive
modems. If a modem is not 100% compatible, it will only affect that customer and not have negative
impacts on other customers (which is a major difference with cable and GPON FTTH systems where the
network operator has valid reasons to allow only modems it has tested on its network).
21.
Individual ISPs are responsible for the modems sold to their customers. If there are known
incompatibilities with certain types of modems, it is just a question of telling customers not to choose said
modems.
22.
While Bell Canada may wish to remotely control the modems of its own customers, this is not something
which is required and especially not desired by wholesalers.
23.
Bell Canada may decide in the future to migrate its own customers from dual PPPoE logins on
dual VLANs to a single IP/DHCP connection that handles both IP and IPTV. This does not prevent
wholesalers to continue to configure their modem with the dual VLAN capability, with one VLAN
reserved should the customer decide to subscribe to Bell's IPTV offering.
24.
And if the Bell IPTV service is resold via the wholesalers, support issues would be wholly within the
wholesaler and not be a Bell Canada problem.
25.
Instead of trying to find solutions to increase its revenues, Bell Canada as sought technical reasons to
prevent wholesale access to its DSLAMs in order to gain exclusive access to its last mile infrastructure.
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Dealing with Distractions
Negotiation versus regulation
26.
The first presentation of the hearing saw Bell Canada's CEO claim that Bell Canada was perfectly
willing to negotiate deals with commercial partners outside of a regulatory environment. Yet, the
remainder of Bell Canada's arguments was focused on finding reasons why it must be allowed to retain
the exclusive access it gave itself despite multiple Commission decisions.
27.
If Bell Canada really intended to provide negotiated services outside of the regulatory environment,
why didn't it make any concrete proposals during the hearing to show its good faith ?
28.
Bell Canada used the President's Choice example a number of times. When a monopoly insists on
vetting customers before negotiations, it is an explicit declaration that it will not negotiate with potential
competitors unless the competitor brings something to the table. Such a context does not foster
competition and cannot be accepted as a replacement to regulation.
29.
In the case of Telus vs Bell for the HSPA upgrades, negotiated agreements were possible because
each needed something the other had and neither could afford to deploy nationally on their own.
Coopetition is thus possible in those instances.
30.
But, in the case of last mile access, the small ISPs have nothing to bring to the table. There is nothing in
it for the incumbent. And an incumbent will not willingly help competitors grow if it results in lower profit
margins.
31.
It is because there is no natural reason for incumbents to negotiate that regulation is
necessary.
32.
If Bell Canada were split into separate infrastructure and retail companies, The infrastructure side would
have a natural instinct to gain as many wholesale customers as possible and increase traffic as this
would maximise its profits. In such an environment, an idle DSLAM port would generate no profit for
the company and have no strategic value. This natural instinct to gain wholesale business would make
regulation unnecessary.
33.
But, as a combined infrastructure and retail operation, the retail operation will use its power to prevent
other retail competitors from accessing the infrastructure. In such an environment, an idle DSLAM port is
seen as a strategic asset because it is not benefitting a competitor.
34.
Perhaps Bell Canada needs to be given a choice: accept to be split into separate infrastructure and
retail companies where regulation could quickly be lifted. Or remain as a single entity where regulation
continues to be required to ensure fair and equitable equal access to the last mile infrastructure which is
not reasonably duplicatible.
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Access to the last mile
CO-Based DSLAMs are no longer viable.
35.
The 6% market share for GAS ISPs was acquired during a time where CO-based DSLAMs provided
competitive speeds and where GAS did have access to some remotes (albeit with ADLS1 profiles).
The significant speed increases by both cable and Bell Canada introduced in the last 6 months have
rendered GAS truly obsolete. There is a limit to customer loyalty when Bell Canada offers 5 times the
speed.
36.
During its presentations, Bell Canada admitted that CO-Based DSLAMs could only reach 11% of the
customer base with modern speeds. (due to range limitations). Today's copper reality is that only short
loops provide speeds which permit competitive services. Going forward, limiting ISPs to only 11% of
their current installed based would drop their current market share from 6% down to 0.66%,, essentially
snuffing out any competition.
37.
CO-Based DSLAMs would only be economically feasible where the population density within a 1km
radius of the CO is high enough to give each ISPs sufficient number of customers to make a DSLAM
feasible.
38.
With some 130 ISPs splitting a 6% piece of the pie, the number of location where duplication of
DSLAM facilities would be feasible would be very small. Therefore, such a scenario would not result
in duplication in sufficient scale to limit an incumbent's control of the market.
Unbundled sub-loops are not viable.
39.
Bell Canada offered to provide access to the
sub-loop between its remote JWI and homes. ISPs
would have to install their own DSLAM on/around
the JWI and string their own fibre from the CO. As
you can see in the picture to the right, there is not
much space where additional DSLAMs could be
attached. If 5 separate ISPs had customers in this
neighbourhood, it would be physically impossible to
attach 5 DSLAMs to this structure. In cases where
the JWI is against a fence (as picture on page 4),
there is no way to hang a DSLAM to the back of
the JWI since it is too close to the fence. This type of
facility cannot practically be duplicated.
40.
In such a scenario ISPs would rarely have sufficient
number of customers in any one particular
neighbourhood to justify the deployment and
monthly costs of this equipment to serve small
number of customers. This type of facility cannot
feasibly be duplicated and duplication would not be on a sufficient scale to limit an incumbent's
market power.
41.
Furthermore, the feasible duplication would be event more reduced in GPON/FTTH systems due to the
nature of the GPON architecture.
42.
In a scenario where all 130 ISPs would want to have their own DSLAM, perhaps a contemporary artist
(and engineer) could be hired to create a large scale artistic installation consisting of 130 DSLAMs
assembled on top of each other. That would definitely qualify as a "next generation" infrastructure :-) :-)
;-) ;-)
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43. Access to the last mile
Mandating access to incumbent's last mile
44.
With all other options having been shown to not be viable, this leaves one viable option: mandating
open access to incumbent's last mile infrastructure. Not only can this not be realistically duplicated, but
because of constant technological evolution, the constant re-duplication of the infrastructure would be a
constant waste of capital that could be put to better use elsewhere.
45.
This would mean that ISPs would somehow get links to each CO, where, as Bell had suggested at one
point, layer 2 connections (ethernet switches) would be made to every Bell Canada DSLAM and/or
OLT (for FTTH) attached to this CO, whether inside the CO or in a neighbourhood remote.
46.
There is no question that ISPs must be granted at the very least equal speeds to those offered by Bell
Canada. It is the only way to provide a competitive environment where ISPs stand a chance to reduce
market dominance by the incumbent. The Commission ruled twice in favour of equal speeds, and since
then, the speed differences has significantly worsened, greatly reducing competitiveness of ISPs.
47.
The equal speeds concept also allows for a technology-agnostic implementation which applies equally
to cable, DSL or FTTH. This permits a more stable longer term regulatory environment where proper
plans can be made without fear of them changing every second year.
48.
How should equal speeds concept be implemented ?
• Similar to GAS (formerly) and TPIA where the incumbent files tariffs for each allowed speed
and ISPs much choose from that limited list. This would also require frequent refiling of tariffs
whenever the incumbent creates new speed profiles. It also prevents ISPs from offering speeds
which the incumbent does not want them to offer (namely faster that its own fastest speed).
• Perform some regulatory innovation and grant ISPs access to individual ports and let them
configure the speeds to their liking. By pro-rating the cost of a port based on a published
cost for the highest speed attainable for this hardware, it would allow individual ISPs to offer
any speed profile they wish, including speeds that are higher than what the incumbent has
decided to market, while the later would be fairly compensated for the capacity required
between the CO and the remote DSLAMs to carry this traffic. (a valid concern raised by Mr.
Bibic during the hearing).
49.
The scenario would provide for much greater service differentiation, greater competitiveness while fairly
compensating the incumbent for the last mile portion that is shared. It would also simplify the regulatory
process since only one tariff would need to be published per technology used. This would be the cost
for the highest attainable speed and a formula to calculate the cost for any speed below this. This would
allow one ISP to offer 16mbps service while another could decide to out-do his competitor and offer
17mbps service.
50.
This concept covers only the portion between a home and the central office serving that home.
51.
To summarize, the Commission, and/or Governor in Council have no choice but to mandate access
to an incumbent's full range of last mile access technologies and speed capabilities. It is the only
viable way to create an environment where there can be competition and continued equal access to
infrastructure without constant review and vary, court challenges, petitions and what not. ISPs need to
get on with their business of service customers.
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What level of aggregation ?
52.
An assumption of some 400+ Central Offices in Québec and Ontario where DSL service is available.
Whatever the exact number doesn't make much of a difference.
53.
Competitive backhaul services are available only between a portion of those central offices, with many
rural areas served only by Bell Canada.
54.
Any plan to re-invent GAS must consider the current state of affairs and offer an evolution to the new
platform which is manageable both at technical and financial levels without forcing too many ISPs out
of business. The quicker the transition from GAS to the new system can be completed, the quicker GAS
can be totally forborne and Bell Canada can do as it wants with that service.
55.
Roger's Ontario footprint consists of 31 POIs. As of this date, only 10 have ever been used by TPIA.
Videotron has 5 POIs accessed from a central physical point in Montreal and they have been used.
GAS provided a central POI to gain access to all points in Québec and Ontario. Expecting ISPs to
cover 400 POIs when nobody until now had covered the 31 for Rogers is not realistic.
56.
The 130 GAS ISPs have yet to get together and consider some plan for cooperative or other structure
which would combine the very small 6% market share to deploy links to those 400 COs. In the
Commissions wants to see this "facilities based" transition forge ahead, it will need to provide some
form of bold leadership.
57.
The GAS ISPs developed their customer base from all over Québec and Ontario. With a dispersed
customer base, there are many COs that serve too few of an individual's customers to warrant
deployment of a link to that CO.
58.
A migration to a "raw" ADSL-CO where ISPs must individually connect to each CO would greatly
diminish the serving area of most ISPs, forcing them to abandon many customers served by COs with
insufficient number of customers to justify backhaul links. And when an ISP does not have a link to a
CO, it cannot acquire customers in that area and thus causes a catch-22 situation where insufficient
number of customers make it impossible to acquire enough customers to justify the links.
59.
During the hearing, I proposed a Nav Canada like company (non share capital, non profit corporation,
or whatever other corporate structure is deemed appropriate) which would create an aggregation
network that serves the ISP community. I am more and convinced that this is would be the bold step
required to safely evolved from GAS to a new system without loss of ISPs or competitive levels.
60.
Such a company would provide an aggregation service to any ISP from all of the COs. It is only by
combining the capacity requirements of all independent ISPs that it would become possible to provide
sufficient geographical coverage to scale the competition level to make a difference in the incumbent's
dominance of the market.
61.
For the sake of discussion, inspired by the recently announced Australian plan, I shall call this company
NBNCorp. The board of this company would consist of ISPs. Thus, this company would serve and
respond to its customers.
62.
This company would have the size and clout to negotiate backhaul deals to aggregation point(s), and
be able to choose between various backhaul suppliers where competition exists and Bell Canada
where there is no competition. It would handle the many contracts with different suppliers, and provide
a one stop shop solution for ISPs (greatly simplifying their life).
63.
NBNCorp would be the one taking out the $25 million liability insurance for equipment co-location
in Bell COs. This would provide significant savings compared to a scenario where every small ISPs is
expected to purchase such onerous insurance.
64.
Individual ISPs would be free to use other backhaul aggregation providers or build their own if they so
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wish. But NBNCorp would provide competitive backhaul aggregation service that would allow ISPs
to focus on growing their business, and more importantly, make it much easier for ISPs to grow their
business because of the larger footprint available to them.
65.
Eventually, this NBNCorp could IPO and become share capital. But its initial thrust would be to provide
for an easy transition from the current GAS regime to the new facilities based regime.
66.
NBN Corp would have the ability to get its own dark fibre links where warranted and generally
develop a competitive aggregation network.
67.
NBN Corp might also serve other provinces, either by providing a separate aggregation for each
province, or perhaps providing a national aggregation network that might include not only telco but
alco cable systems, making it easier for the smaller ISPs to grow by acquiring customers for both DSL/
FTTH and Cable.
68.
If it is ever decided that a 3rd last mile should be created, or that upgrades to rural last miles need to be
done, perhaps this NBN Corp would be the right vehicle to perform such work and could become an
important tool for government to implement digital strategies.
69.
In terms of level of aggregation:
• At a bare minimum, Bell Canada needs to aggregate traffic from COs where no competitive
backhaul exists to a CO where competitive services are available.
• If an NBN Corp is created, it could decide on the level of aggregation needed based on
feedback from its customers (the ISPs). It could provide single point of aggregation to some
ISPs and more distributed POIs to other ISPs depending on their needs.
70.
If the goal is to re-energize the competitive environment in Canada, then there is the need for an
immediate formation of an NBN Corp to allow a rapid transition to facilities based services while
providing for a manageable transition from GAS.
71.
If the goal is simply to pander to Bell Canada's tamper tantrums, then we have all wasted much
time because unless some bold action is taken by this government, Bell Canada and cable will keep
increasing their market dominance until competitors represent less than 1% of market share.
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Appendix 1
About Walk In Closets
72.
During the hearing, Mr. Arpin
asked where Vendée Québec
was, and whether there were
many situations where a town is
served by a central office too far
to provide CO-based DSLAMs.
Vendée is in the Laurentians,
40km from its CO at Arundel,
about 145km north west of
Montréal by bicycle, about 30km
from the resort of Mont Tremblant.
It is 10km north of the route 323
which is the main road between
Ottawa and Mont Tremblant
resort.
73.
Throughout the Laurentians, there
are many examples of setups
where a WIC (Walk In Closet) is
used to serve the community, too
far from the CO to have CO-based DSLAMs.
74.
More significant examples can be found even around large urban
centres. For instance, St Lazare, a suburb west of Montréal has a
population of 19,000. It's CO is located in Hudson, over 10km
away from the centre of town, and thus not even close to being
able to provide DSL service from CO based DSLAMs.
75.
Bell Canada generally does a good job of blending its WIC with
the local scenery so they become inconspicuous. The one pictured
on the right happens to be on a vacant lot and thus more visible.
76.
The presence of a WIC does not magically make modern
ADSL services available to the residents. In the specific case of
St-Lazare, Bell Canada has had to deploy remotes in certain
neighbourhoods which are more than 1.5km from the WICs. So
even if ISPs were allowed to install DSLAMs inside the WICs, they
still wouldn't be able to reach all residents of a town unless they
have access to the remotes.
A Bell Canada WIC on Ste-Agélique Street
at St Lazare QC.
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Appendix 2
About Multicasting
77.
The term Multicasting has been used during the proceedings without a proper technical description.
This becomes important when certain parties used this as an excuse to claim something is impossible, or
other parties claim it is easy to implement.
78.
A Unicast transmission is one where the destination IP address in a packet designates a single end
point. Routers forward the packet to the next router based on routing tables applicable to the IP block to
which this IP belong. A server wishing to unicast to 10 users will need to send each packet 10 times.
79.
A Multicast transmission is one where packets are sent to a virtual destination1 (essentially one
multicast IP per TV channel). End nodes ( TV sets) wishing to receive a transmission will send an IGMP
subscription request to their nearest router. If that router already receives this transmission, it will simply
send a copy of every packet to the new subscriber. If it does not yet receive this transmission, it will send
an IGMP request down the line to its neighbour to request a copy and so on. A server transmitting to
10 subscribers will only need to send one copy of the transmission since the duplication of packets is
performer by the routers along the network. This greatly reduces capacity requirement in the distribution
network.
80.
While carrier grade equipment likely supports IGMP and multicast, it must still be configured properly. It
is not as simple as flicking a switch to enable this type of service. Planning and allocation of the multicast
IP addresses must be made to ensure no overlap and dual use. And capacity planning must be made
based on many experiences and/or assumptions on the type of viewing done by the average person.
The load on the network can be very different on nights where everyone is watching the LOST finale
versus nights where everyone is watching a different programme.
81.
In short, it would be far simpler for Bell Canada to white label resell its own IPTV service than for it
to allow a 3rd party to co-locate their own IPTV servers and integrate them into the existing multicast
environment to ensure there are no conflicts with the existing one and that capacity planning is done
properly.
82.
However, in a scenario where an ISP has its own links to each CO, separate from Bell's infrastructure,
that ISP could easily deploy multicast enabled applications with the only coordination needed at the
DSLAM level. In such an environment, such ISP could deploy IPTV services without any conflicts with
other similar services. And in such a case, Bell Canada should not have any right to complain or prevent
such deployment.
83.
In short, Multicast is not black magic, but it still requires careful planning.
*** END OF DOCUMENT ***
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IP addresses in the range between 224.0.0.0 to 239.255.255.255 are designated as Multicast addresses
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