Telecom, TelstraClear man the dark fibre barricades

Telecom's separation undertakings fail to deliver key low cost alternative

Buying or leasing optical fibre cables that are unlit – that is, without termination equipment and services such as Ethernet running over them – is an option that’s becoming increasingly popular overseas, as it provides an economical alternative to costlier, traditional telco-supplied circuits.

The dark fibre concept was born in the capacity glut that resulted after telcos deployed huge amounts of optical fibre in the new millennium. As technical advances led to hundred-fold capacity increases which in turn caused wholesale data prices to collapse, a market for cheap circuits that customers could utilise however they wanted emerged.

Update: Government investment plan tackles dark fibre access

In 2005, Bill St Arnaud from Canada’s advanced academic research network, Canarie, presented at the New Zealand annual GOVIS meet, pointing to big cost savings, vastly increased service option flexibility and performance boost for those who went down the dark fibre route.

The attraction of dark fibre is that it provides full management and control of the circuit. A service provider can use dark fibre to develop a full range of services economically and react quicker to faults and reconfiguration requests, thanks to having control over the link and its end points.

Dark fibre can provide high speed connectivity at a low cost. Instead of paying telcos to incrementally increase rates for different speeds such as 10, 100 or 1000Mbit/s running over the same physical link, dark fibre customers can simply light up the circuit with inexpensive 100Mbit/s or 1Gbit/s termination gear.

What’s more, dark fibre means the circuit can be used for other protocols as well, and not just IP. The circuits can be used to transport for instance RF signals used for satellite pay television, giving providers another revenue stream.

Four years after St Arnaud’s presentation, dark fibre is starting to appear as an option for service providers, organisations, schools and businesses, but access to it nationwide is still restricted.

Telcos say no

Those seeking access who approach the big telcos in New Zealand to buy unlit circuits are likely to draw a blank. Telecom’s infrastructure arm Chorus provides dark fibre, but only to its wholesale and retail operations according to spokeswoman Melanie Marshall. Under the present regulation, Commerce Commission determinations and Telecom’s legally binding Undertakings to the government, Telecom is not required to give open access to dark fibre.

The only thing Telecom will provide to those seeking access is “transmission capacity” via its Wholesale division, Marshall says. This means managed services such as Ethernet.

TelstraClear’s position is similar to Telecom in that the telco prefers to provide fibre with services on it. Spokesman Chris Mirams says “we have skills as both an infrastructure investor and in managing services to a high standard of reliability.”

Mirams adds that given the significant investment TelstraClear has made, it obviously wants to ensure a return on that. For TelstraClear, that is providing value-added managed services at both a retail and wholesale level, according to Mirams.

Vodafone, on the other hand, would love to buy dark fibre if it was offered, according to company spokesman Paul Brislen, as it’s a very economical alternative to serviced and managed links. Brislen says the company is able to buy dark fibre from Vector, but would like Telecom to offer the option as well.

Network builders say yes

In some parts of the country, network builders are embracing the dark fibre concept and provide open access to it.

James Watts, who runs Palmerston North-based ISP Inspire Net, says the reason dark fibre is attractive to his customers is because they can “do whatever the hell they want with it.” Inspire currently charges $595 and $995 for intra-town dark fibre pair leases, depending on contract terms, and double that for inter-town unlit circuits.

To light the circuits, Watts says his company sells Gigabit Ethernet transceivers for $140 each.

A similar 1Gbit/s circuit from Telecom apparently costs $7000 a month, plus installation charges.It’s $69k a year according to Telecom’s pricing book.

The dark fibre circuits have been popular with radiology departments to send images to central servers over the fast network securely, Watts says. Without the affordable dark fibre network, the radiology customers would have to invest in servers at the clinics instead he says.

Another advantage of dark fibre is that it makes reconfiguring the services over it faster and less expensive than raising work orders with a carrier supplying a managed link, Watts says.

He is aware that Telecom does not supply dark fibre to those seeking access and criticises the incumbent’s policy of not selling unlit circuits to anyone apart from its own Retail and Wholesale operations, and says it makes mockery of operational separation. “If Telecom believed in the current legislation, Chorus would be selling dark fibre to everybody,” Watts says.

Vector spokeswoman Philippa White says her company offers both dark fibre services and lit managed services. These include Optical Transport Services, SDH (Synchronous Digital Hierarchy) and Ethernet over fibre service, White says.

Customer demand is for both types of network connectivity, White says. Telcos buy a wide range of products and services from Vector she says, explaining that in many cases they will use dark fibre in certain parts of their network, and SDH and Ethernet over fibre in other parts of their network.

Depending on reliability requirements, White says the equipment needed to light up fibre can be very expensive. Due to this, many of Vector’s corporate customers prefer to buy lit or managed fibre services because they have higher service levels than dark fibre and are alarmed and monitored around the clock, White says.

According to White, customers who buy dark fibre usually have plenty of internal expertise and resources to manage and light fibre. The technical skills needed to design, install and operate equipment are also in short supply, White says.

From that point of view, Vector believes managed services make more sense to most businesses unless they are telcos or very large corporate customers with the necessary in-house skills and an appropriate budget, White concludes.

Steve Fuller, CEO of Enable Networks in Christchurch says dark fibre is a fundamental part of his company’s business model.

Enable was set up by the Christchurch City Council, which was funded through its holding company with a $15 million investment and a grant from the Ministry of Economic Development only two years ago, but already claims to have 24 service providers on its books according to Fuller.

The network company supplies both dark fibre and serviced circuits to customers, with a goal to reach every premise in Christchurch, says Fuller. It is already embarking on a further $36 million investment plan to expand service to 85 percent of Christchurch businesses.

Christchurch City Council sees the Enable fibre network as a basic utility. Where telcos fight to avoid giving direct access to fibre, Enable believes dark fibre is a key enabler for cities as it provides an “economic context” that attracts businesses, jobs and people says Fuller.

Enable resisted calls for the company to provide internet and IT services on the network, he says, and has stuck to being an open access network provider instead, as it doesn’t want to compete with its customers.