The city is creating a broadband network using infrastructure built in the 1800s. By Robin Gareiss, InformationWeek Nov 4, 2002 (12:00 AM) URL: http://www.informationweek.com/story/IWK20021101S0032

Talk about a long-term investment In the late 1800s, Milwaukee city workers buried more than 500 miles of ductwork under the streets to carry telegraph wires. Those same ducts started carrying optical fiber in the late 1980s. And now, the city is adding optical Ethernet switches to create a privately run network that will be used for everything from E-government initiatives to transmitting mug shots and public-health information in an emergency.

The 96-square-mile network, being unveiled this week, is one of the few networks completely owned and operated by a municipality. What prompted the 19th-largest U.S. city to run its own OC-12 dense-wave-division multiplexing network? Savings, economic development, and public safety. So far, about half of the city’s public buildings are connected to the network, which uses Nortel Networks’ optical Ethernet switches. “The performance is excellent and reliable, and everyone notices that,” Milwaukee’s CIO Randy Gschwind says.

The city expects to save $15 million over a decade by eliminating costly carrier circuits. And, given that Milwaukee was literally sitting on ready-made ductwork, augmenting the existing network seemed prudent in uncertain times.

Milwaukee had used its own fiber where it was available, and OC-3 lines leased from the carriers where it wasn’t. Now, the fiber buildout is so vast that the city will dump the carrier circuits altogether and is getting 64 times the bandwidth that it had by adding optical switches to its own fiber. Fifty municipal facilities are connected to redundant optical rings; 50 more will be added by next year. The network is expected to spur economic development by linking all government functions. “We’re providing … a more advanced quality of life,” Gschwind says.

What really has people talking are the public-safety implications of all that bandwidth. “The whole homeland-security movement makes you think about how effectively you can use this network,” Gschwind says. “It’s become more important in the minds of all city leaders.”

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Voice over Internet service talks to consumers

Steep phone fees spur move to online voice calls

TOKYO, Japan (AP) –For years, the high cost of phone calls was the biggest obstacle to Internet growth. These days, that curse is proving to be a bit of a blessing.

As always-on broadband Internet service becomes more available, towering tariffs for traditional voice calls are encouraging adoption of a technology that has yet to make much headway with consumers elsewhere: voice over Internet.

More than 300,000 people have signed up for the service from BB Technologies Corp., a subsidiary of Tokyo Internet company Softbank Corp. That’s easily more than three times the estimated U.S. consumer market.

The service, which began in April, doesn’t require a new telephone. With a book-sized modem, one gets voice quality comparable to that of regular voice lines — at a fraction the cost.

Subscribers to Softbank’s Yahoo broadband Internet service get voice over Internet for free. Non-subscribers pay about $10 per month including modem rental after a $30 installation fee.

Users keep their same phone number. The broadband service is an asymmetric digital subscriber line that runs over existing wires. Customers still must pay a line fee that starts at about $13 a month to Nippon Telegraph and Telephone, the former state monopoly that still controls nearly all fixed lines to homes.

Saving on the service

Even so, callers can save drastically.

Although traditional phone fees are gradually coming down as the sector opens up to newcomers, a three-minute long-distance phone call in Japan still costs as much as 68 cents while the same call to New York costs $1.40.

With BB Phone, three-minute calls within Japan and to the United States cost 6 cents. The rates for calls to other countries vary but are all generally cheaper than old-style phone calls. Calls to another BB Phone are free.

A long-distance romance has Ayumu Mizuno, a 24-year-old engineer, sold on BB Phone. He expects to save hundreds of dollars in calls to his out-of-town girlfriend, who lives with her parents.

The service is in such demand that customers have complained about long waits for service and support. Another catch is that free calls happen rarely because BB Phones remain rare.

“It’s too bad I have no other BB Phone person to call,” said Yoshio Inohara, a 43-year-old electrician who switched to BB Phone last month. “The only BB Phone I’ve ever called is the support center.”

An online oven?

Softbank, which has invested $ 740 million to set up its broadband network, believes homes of the future will be linked over the Internet through all kinds of devices, not just telephones and computers but also home entertainment centers, ovens and refrigerators.

“The BB Phone is a result of the natural changes in technological advancement,” Softbank spokeswoman Misao Konishi said. “The market is certain to get bigger.”

Last year marked a period of explosive growth for broadband in Japan.

Half of Japanese households are already connected in some way to the Internet, up from just a quarter of households two years ago, according to InfoCom Research, a Tokyo company that compiles Net data.

Those using high-speed connections — including ADSL, cable and optical fiber — total 4 million people, or nearly 8 percent of Japanese households.

A recent study by the Nihon Keizai newspaper found 30-fold growth in high-speed digital connections in Japan over the 12 months ending in March.

Coming to America

Although some 12 million American homes have broadband connections, voice over Internet has not penetrated the U.S. consumer market nearly as well.

That’s primarily because basic phone service in the United States is relatively cheap, about $20 a month, said analyst Norm Bogen at Cahners In-stat. Besides, voice over Internet requires new equipment and service that are not as reliable as traditional voice calls, he said.

In larger U.S. companies, it’s a completely different story.

More than 40 percent of U.S. companies with 500 or more employees have begun converting to Internet-based telephony, according to the research and consulting firm InfoTech.

In Japan, the road ahead for BB Phone remains precarious despite its early success.

Telecom giants such as NTT and KDDI Corp. as well as other start-ups are beginning to offer rival services.

This month, NTT’s long-distance unit began offering a videophone feature for its Net phone service, which has attracted 13,000 users.

“NTT has marketing power,” says Shinji Moriyuki, analyst with Daiwa Institute of Research in Tokyo, adding that only the best of the efforts from smaller companies is likely to survive. “NTT may lose some market share, but not all ventures are going to succeed.”

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Keep an eye on them. Vancouver-based company.

-Ian.

—— Forwarded Message From: Date: Tue, 20 Feb 2001 21:57:28 (GMT) To: “wfi [at] ianbell [dot] com” Subject: 360networks – News Release

February 20, 2001

For immediate release

360NETWORKS TO ACQUIRE IP SERVICE PROVIDER NETRAIL

Acquisition provides 360networks with Tier 1 Internet peering agreements

Vancouver – 360networks today announced plans to acquire NetRail, Inc., a Tier 1 wholesale IP service provider, in an all-stock transaction.

NetRail is an Atlanta-based independent provider of broadband services in the United States. NetRail’s leased backbone network spans 32,000 kilometers (20,000 miles) and includes more than 50 points of presence (POPs) nationwide. NetRail?s customers include telecommunications companies, Internet service providers and application service providers.

“This acquisition accelerates our entry into the IP services market due to NetRail’s established peering arrangements with all other Tier 1 Internet backbones,” said Greg Maffei, chief executive officer of 360networks. “In addition, we will have access to a robust suite of IP products and services, more than 150 customers and an exceptional employee group with proven salespeople and experienced IP network engineers.”

“We look forward to providing NetRail customers access to our seamless, global broadband solutions, and layering their existing traffic and adding new IP traffic onto our lower cost, optical mesh network,” added Maffei.

Founded in 1994, NetRail was among the first companies to establish Internet peering arrangements. The company has private and public peering agreements with all Tier 1 Internet backbone providers.

The acquisition is subject to approval by NetRail shareholders and certain regulatory authorities. 360networks expects the transaction to be completed in the second quarter of this year.

About 360networks 360networks (NASDAQ: TSIX and TSE: TSX) offers broadband network and colocation services to telecommunications and data-centric organizations. 360networks is developing one of the largest and most technologically advanced fiber optic mesh networks in the world. By mid-2002, the planned network will span 143,000 kilometers (89,000 miles) and link more than 100 major cities with terrestrial routes and submarine cables joining North America, South America, Asia and Europe. 360networks is also developing nearly 3.7 million square feet of network and server colocation space. More information is available at www.360.net.

For more information contact:

Investor Relations Nancy Bacchieri ir [at] 360 [dot] net

Media Michelle Gagn? michelle.gagne [at] 360 [dot] net

The statements contained in this release that are not historic facts are ?forward-looking statements? (as such term is defined in the private Securities Litigation Reform Act of 1955). These statements include those describing 360networks? network and deployment schedule and the effect of the acquisition of NetRail on 360networks’ operating and financial results. Management wishes to caution the reader that these forward-looking statements are only predictions and are subject to risks and uncertainties and actual results may differ materially from those indicated in the forward-looking statements as a result of a number of factors. These factors include, but are not limited to, the ability of 360networks to market, sell and provision its services, to design and construct fiber optic networks and install cable and facilities, including switching electronics, to connect its network to its customers and developments made by fiber optic equipment vendors. These and other risks and uncertainties to which the 360networks business is subject are described in 360networks reports filed with the Securities and Exchange Commission and securities commissions in Canada.

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