Optical C-LANs: tomorrow's public road system?

Five years after the Telecom Act became law, the industry is in the midst of a painful contraction that raises serious questions about the regulatory model's viability and spurring healthy competition and market growth.

By Mitch Shapiro and Don Gall

Let's examine one approach to achieving growth and competitive innovation that proponents claim will bring benefits to optical equipment suppliers, broadband services providers (both new entrants and incumbents), and residential and business customers. At its core is the concept of publicly-owned optical "Community LANs" (C-LANs).

Today's market collapse catches the optical-networking industry at a painful juncture in what had been envisioned as a prolonged and healthy expansion. On one hand, there exists enormous excess capacity (97% by some accounts) and hyper-competition in the long-haul sector and a significant buildout of competitive fiber networks in downtown business districts. But in the residential and small-business space the hoped-for flourishing of competition and optical networking is arguably regressing to a duopoly market dominated by incumbents with large imbedded investments in copper and coaxial distribution networks.

In a nutshell, the C-LAN concept combines the following elements: * Fiber's virtually unlimited capacity. * Open-access platform. * Converged IP service space. * Wholesale-only business model. * Public ownership and control of a "natural monopoly" optical C-LAN.

Mike Bookey, a 30-year industry veteran and pioneer in the development of electronic banking systems and networked schools, is one of the more impassioned and eloquent advocates of the C-LAN concept. In recent years, Bookey has founded two companies--ViaLight and FTTX Systems--dedicated to designing and building optical C-LANs. One such network is already operational at Issaquah Highlands, a 3,350-home residential development 15 miles east of Seattle. Issaquah Highlands is the future home of Microsoft's second major business campus.

According to Bookey, a good metaphor for the C-LAN is the existing public-road system. Our nation's road system, which includes a mix of interstate highways, state highways, and community-operated surfaced streets, has mostly been publicly funded. Few would deny that this publicly funded resource has been a powerful enabler of economic development.

According to Bookey, as much as 90% of vehicle trips (and the economic and social interactions they support) occur within the confines of a community's local road system. The same would be true of our expanding digital economy, he suggests, if a public effort were mobilized in each community to build a high-capacity optical C-LAN.

Bookey sees other parallels between our local road systems and C-LANs. Both require a comprehensive addressing plan (street addresses vs. IP addresses), active routing technology (smart traffic lights vs. high-speed routers), connectivity rules (rules of the road vs. network protocols), and security and rules enforcement (laws and police vs. network security and privacy protection). And importantly, both are open to the general public on a fair and equal access basis and achieve beneficial "network effects" by interconnecting every location within a community.

And just as a combination of public funding and usage fees (e.g., gasoline taxes and tolls) have financed road construction and maintenance, Bookey believes a similar financial model makes sense for C-LANs.

In response to those who raise concerns about government involvement in the telecommunications sector, Bookey sticks with his public-road analogy. "Imagine a world," he says, "where private monopolies owned the public-road system and set the access rules. Federal Express might be allowed to use the local road system but not Airborne, UPS, and other competitors. Why should the building and operating of the digital-road system be any different than the public-road system?" he asks.

In our public-road system, private industry makes its money by building roads, manufacturing concrete, asphalt, traffic lights, etc., and using roads to deliver goods and services. But the public retains ownership and makes key policy decisions (e.g., when and what roads to build), sets the rules, ensures open access, etc. Bookey argues that a similar set of relationships makes sense for C-LANs.