Anaheim pushes Sonet/ ATM fiber to the premises
The city of Anaheim, CA, and SpectraNet International in San Diego are forging an end-to-end Asynchronous Transfer Mode (ATM) fiber network that unites both municipalities and private sector companies ready to capitalize on a broadband future. According to Edward K. Aghjayan, Anaheim`s public utilities general manager, the recently signed memorandum of understanding between the two entities will not only provide state-of-the art telecommunications services to the community and a new source of revenue to the city, but will also offer Anaheim businesses access to an array of value-added services.
The memorandum calls for the development of a fiber-optic universal telecommunications system starting in early 1997 and progressing in phases through completion in 2002. The system will provide service to all businesses, government offices and residents in the city. Final agreements will be submitted to the City Council for review and approval as early as this fall.
According to Bob Cerasoli, chief strategic officer at SpectraNet, the Synchronous Optical Network (Sonet) ATM network will take fiber all the way to the customer premises and will operate at a minimum of OC-3, or 155-Mbit/sec, transport rates to all locations on the network. The city`s dark fiber is capable of initially handling more than 3 million voice channels or more than 40,000 mpeg-2 video channels. Anaheim`s more than 100,000 telecommunications customers create a market estimated to be worth more than $200 million per year. SpectraNet`s proposal suggests that a broadband network could capture as much as 30% of that business in the future.
Vishwa Tiwari, Anaheim`s telecommunications engineer, notes that Anaheim had already installed 50 miles of singlemode fiber-optic cable for control and operation of electric and water systems and other city uses. The fiber cable is routed through 14 electric and water facilities, and 11 facilities will have a Sonet node. The city`s initial fiber cable deployment will form the backbone of SpectraNet`s fiber-to-the-premises architecture. Cerasoli says the company designs and architects all-fiber networks because "the company does not consider HFC [hybrid fiber/coaxial-cable] systems sufficiently reliable to deliver voice traffic."
Cerasoli further comments that "end-to-end fiber is the only way to achieve true broadband functionality. SpectraNet sees the future of networks as broadband, but the last remaining obstacle to that has been the local exchange" He acknowledges that SpectraNet is banking its future on the supposition that once a full fiber-optic network is deployed, the applications that the market appears to want will be able to run, and that will ensure the success of the network.
Bill Johnson, chief technical officer at SpectraNet, adds that end-to-end ATM networks are "a good reason for companies like Nortel [Northern Telecom] to get this gear out of the lab and start tackling new markets again." Cerasoli adds that SpectraNet has a strategic relationship with Northern Telecom, which is supplying most of the Sonet ATM equipment, along with a guarantee of network and equipment performance. In providing systems integration support, Northern Telecom has agreed to manage other equipment on the network as well.
In addition, SpectraNet has an alliance with investment banker J.P. Morgan, who is financing Anaheim`s network construction. Another reason Anaheim decided to award the contract to SpectraNet is that the company is also deploying fiber-rich networks in Lakeland, FL, and in two California cities: Santa Clara and Santa Ana. The latter has signed a memorandum of understanding with SpectraNet and is geographically close to Anaheim. Even so, Santa Ana does not have its own utility, so any broadband network investment and construction there will have to made from the ground up.
Cerasoli says that network builds in Lakeland and Santa Clara are smaller projects. "SpectraNet is building municipal networks in [those cities] that are very-limited-scale versions of what is being done in Anaheim." However, SpectraNet`s long-term plans call for initiating as many as 25 of this type of municipal broadband network agreements. In aggregate, that number of municipal network builds could require an investment of $5 billion or more to complete. Over the next two years, however, Cerasoli maintains that SpectraNet will focus on building a regional footprint in Orange County, CA (which includes Anaheim), that will cost more than $600 million to build.
Whereas the Anaheim build will cost 30% to 40% more to build than a complete fiber-cable network, the architecture does provide operating efficiencies. SpectraNet has calculated that the network will be about 50% less expensive to operate than could be offered by the incumbent phone com pany (PacBell). And by making the network investment up front and building a broadband pathway one time (and not going back to upgrade on a case-by-case basis), the cost of upgrades and maintenance goes down considerably, according to SpectraNet`s proposal.
The Sonet ATM architecture and network management suite used to run the network allow SpectraNet to add variable bandwidth on demand--or even at a keystroke--as opposed to making structural changes to the network. In some cases, end-users will be able to enable variable bandwidth individually on a call-up basis. This type of network could be useful to the Hollywood film and television production community as a development site to experiment with new applications that current local exchange carriers have not been able to provide.
The telephone companies can run advanced networks to premises in Orange County, but they have to overlay an existing network and maintain the current tariff structure to do so. Users, such as studios and postproduction houses, for example, consume bandwidth on a project-by-project basis. Paying a flat monthly rate under telephone companies` current tariff structure is simply too cost-prohibitive for intermittent users. "That type of access limits adoption of broadband as a mass-market solution," says Cerasoli.
The phased nature of the network build requires SpectraNet to subdivide various pods of commercial activity. But with commercial usage immediately migrating to the network, SpectraNet is forecasting break-even with six months of operation in each pod.
A management team has been formed for each city subsidiary, which is in reality a complete operating company. For example, the Anaheim operating company will have responsibility for complete end-to-end customers sales, service, contact and order entry. That includes a consolidated bill sent out by SpectraNet. q
Paul Palumbo writes from Seaside, CA.