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March 17, 2003 Provided by System Dynamics Inc.

Exploiting Existing Paths for Broadband's Last Mile

At the Intelligent Cities Conference last October, we met Dr. Jey Jeyapalan, a consultant in pipelines and last mile optical fiber networks. In a session on alternate deployment strategies for the last mile, Jey spoke about the increasing political and economic problems in deploying fiber in dedicated conduits. He made the argument that sanitary sewers, storm drains, waterlines, and natural gas lines already reach the very buildings which need the last mile access and represent an existing and currently unused path which could be used to overcome the last mile bottleneck.

Jey said that using existing conduits for multiple uses is not new. "The idea started in Europe, Japan, and South Africa 20 years ago. As a matter of fact, a number of water utilities have permitted telecom cables to be put inside of water pipelines going back 100 years. A number of cities around the world have used existing utility pipes for building their broadband networks while serving their originally intended functions. Tokyo, Taipei, Berlin, Toronto, Vienna, Boston, New York, are among the growing list of progressive cities where such creative business partnerships have been successfully implemented." He said that EPA rules in the US require most cities to upgrade their sewers and waterlines in the coming years, thus providing a potential opportunity for multiple use of these facilities.

Jey went on to propose a partnership among telcos, pipe owners, service providers, and vendors, where each has something to gain by cost sharing. He indicated several different business models for making this work, and provided a few examples:

  • The fiber builder will either purchase or lease existing retired pipelines that are no longer used in active service in exchange for either an upfront payment or an annuity type payment to the owner of this strategic asset. Pacific Gas and Electric, Key Span Energy, Con Edison, Atlanta Gas, Peco Energy, are examples of this model.
  • The pipe owner will build and own the fiber network. The cities of Tokyo, Hamburg, Vienna, Boston, New York, and Los Angeles are examples of this business model.
  • The fiber builder will make the pipe owner a business partner, where reserve capacity in the existing pipe network could be used by the fiber builder for installing last mile fiber in exchange for a negotiated percentage of the gross revenue. The cities of Albuquerque and Indianapolis are examples of this model.
  • The owner of the existing pipeline network will take network providers, content providers, and vendors as partners to install fiber in their pipes and operate this network. Other than the few strands needed by the pipe owner for their needs, the rest would be leased to any number of the above partners for additional revenue to the pipe owner, where the cost of the fiber build out will be borne primarily by the pipe owner. The city of Berlin is an example of this model.

Jey's bottom line is that pulling fiber thru shared underground space can be accomplished faster and more cost effectively than by creating new dedicated fiber conduits. The details depend upon the specifics of each situation.

Additional information can be found at ( www.hhevents.com/T2jeyapalan.pdf ) and ( www.astm.org/SNEWS/AUGUST_2002/jeyapalan_aug02.html ) or by contacting Jey at jkjeyapalan@earthlink.net (+1 860.354.7299).