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BME Wireless Community Networks: Motivations, Design and Business Models Based on tutorial lectures held at Tridentcom2008 and OPAALS2008 conferences © Cs. Szabó, K. Farkas, Z. Horvath Vezeték nélküli és mobil 2009 ősz 1 Outline BME Introduction Community networks Available wireless technologies Design considerations Business models Summary Vezeték nélküli és mobil 2009 ősz 2 Objective of this tutorial BME Give an overview of requirements, services, technologies and business models for Community Networks From this lecture the participants are expected: to obtain a reasonably good understanding of the state-of-the art technologies and the most important business models; to learn from experiences of some case studies; and will be provided with guidelines as a starting point for the planning of wireless CNs Vezeték nélküli és mobil 2009 ősz 3 Ubiquitous access and CNs BME Some historical infrastructures such as electricity networks, road systems became ubiquitous, but ubiquitous access and reliability certainly cannot be taken for granted in the case of telecommunication networks and the Internet. Telecom and internet companies operate according to their business models, the consequence is often the “digital divide”. In a regional environment, however, it is possible to create network infrastructures which, if properly designed, can provide ubiquitous coverage and accessibility as well as the required degree of reliability plus several more advantages. Vezeték nélküli és mobil 2009 ősz 4 Introduction: Community Networks BME Infrastructure and services created with high level of involvement by a community belonging to a specific geographic area Grassroot origins: “free nets”, “civic nets” Newer examples of community initiatives: “municipal fiber”, “condominium fiber” Government initiative and governance Most of community networks today are driven by (local) government initiatives, thus a definition for CN can be: Network infrastructure (mostly wireless), created by some form of public participation plus the underlying business model plus the applications and services provided to communities related terms: Digital cities, digital communities (Intel), wireless cities, municipal wireless Vezeték nélküli és mobil 2009 ősz 5 Outline BME Introduction Community networks Available wireless technologies Design considerations Business models Summary Vezeték nélküli és mobil 2009 ősz 6 A simple architectural model of CN infrastructure Vezeték nélküli és mobil 2009 ősz BME 7 The connectivity layer BME To provide connectivity for all components (humans, organizations, agents etc.) of the CN A few important concepts IP the Internet as well as most of modern telecommunication systems rely on IP, which provides just a best-effort type service but has become THE network protocol of current and future networks. Wireless vast majority of community networks is based on wireless technologies this oldest technology has become widespread during the last decade due to advances in microwave technology, the cellular principle of network organization and the acceptance of related standards. Mobility capability of the network to “keep track” of users that change their locations. Ad-hoc network self-configuring network consisting of mobile nodes and wireless links and form an arbitrary topology. The nodes can be placed and are free to move randomly and organize themselves into a network in an arbitrary fashion. Vezeték nélküli és mobil 2009 ősz 8 Service provisioning platform BME SDP, Service Platform, Service Delivery Platform A new concept that has also emerged in the telecom world (NGN) change from the classic telco service model of independent, vertically integrated networks to a new architecture that comprises a variety of access networks and has a new horizontal layer or platform A set of components to deliver services through a horizontal service network and a multiplicity of access networks. call control, QoS provisioning, media gateways, authentication, authorization, and accounting (AAA) Vezeték nélküli és mobil 2009 ősz 9 Applications that drive the development of wireless community networks BME A) Access to public information and services B) Public safety applications C) Traffic control and transportation D) Health care and telemedicine applications E) Business services F) Educational applications G) Applications for utility companies (electricity, water, gas, etc.) Vezeték nélküli és mobil 2009 ősz 10 CN applications detailed (1) BME A) Access to public information and services Public Internet kiosks for access to public information, tourism, portals for egovernment services and for tourists B) Public safety Enhancing public safety by remote surveillance of public areas Improving the communication with police, civilian police, fire department and the like C) Traffic control and transportation Coping with traffic congestion by vehicle monitoring and intelligent traffic light control Vehicle management for public transportation (buses) Intelligent parking systems with flexible payment Monitoring of road conditions, in particular in winter Vezeték nélküli és mobil 2009 ősz 11 CN applications detailed (2) BME D) Health care Improving the efficiency and cost-effectiveness of health care services by broadband and wireless communications among and within health care providers (incl. telemedicine services) Home health care and assisted living E) Business services Business partners/providers/clients searching B2B and B2C transactions Advertising products and services F) Educational Internet access, e-learning, administration portal on the campus and extending educational network to the home G) Utility companies (electricity, water, gas, etc.) Collecting measurement data and billing information Vezeték nélküli és mobil 2009 ősz 12 Wireless cities and their primary applications BME Chaska, MN – Digital divide for schools, businesses and residents; Cheyenne, WY – Traffic signal management; Corpus Christi, TX – Automated meter reading for city-owned utilities; Lewis&Clark County, MT – leased line replacement; access to remote county buildings; Medford, OR – public safety; Ocean City, MD – Integrated digital, voice and video for city buildings; Piraí, Brazil – Municipal field-force productivity; Portsmouth, UK – Bus passenger information dissemination; San Mateo, CA – Police field-force productivity improvement; Shanghai, China – Police field-force productivity improvement; Spokane, WA – Municipal applications and e-Government initiatives; Westminster, UK – Video surveillance and enhanced security. Vezeték nélküli és mobil 2009 ősz 13 Wireless community networks: current status (only USA) BME www.muniwireless.com City Initiatives Directory ~200 networks in “deployed” or “running” status ~180 in “in progress”, “negotiating” or “feasibility study” status Europe: lagging but ambitious objectives Asia-Pacific: many similar initiatives Vezeték nélküli és mobil 2009 ősz 14 Case studies (to be dealt with in detail in the Business Models section) BME Wireless Philadelphia, USA to provide Internet access in the city, as the level of broadband penetration is very low; subsidizing Internet access for low-income residents Corpus Christi, USA AMR application as a driving force plus other applications T.Net – Trentino, North Italy cope with digital divide in the region Vezeték nélküli és mobil 2009 ősz 15 Outline BME Introduction Community networks Available wireless technologies Design considerations Business models Summary Vezeték nélküli és mobil 2009 ősz 16 Available wireless technologies for CNs BME Wi-Fi mesh the well known Wi-Fi (standard-based wireless LAN) combined with the mesh network principle WiMAX a relatively new standard-based wireless technology to cover significantly larger area than a LAN – wireless MAN (metro area network), both fixed and mobile (Cellular mobile) Vezeték nélküli és mobil 2009 ősz 17 Available wireless technologies BME Source: Intel Corp., Understanding Wi-Fi and WiMAX as Metro-Access Solutions, White Paper, 2004 Vezeték nélküli és mobil 2009 ősz 18 IEEE802.11 family of standards BME Standard Frequency range Modulation Compatibility Data rate (max.) 802.11a 5 GHz OFDM - 54 Mbps 802.11b 2,4 GHz DSSS 802.11g 11 Mbps 802.11g 2,4 GHz OFDM/DSSS 802.11b 54 Mbps Distance Indoor: 30-90 m Outdoor: 100-300 m OFDM: Orthogonal Frequency Division Multiplexing, DSSS: Direct Sequence Spread Spectrum Vezeték nélküli és mobil 2009 ősz 19 New IEEE802.11 standards BME IEEE802.11e QoS (Quality of Service) enhancements for WLAN Already approved IEEE802.11n Next generation of Wi-Fi Extends the maximum data rate to 248 Mbps Expected ratification: 2009 IEEE802.11s Mesh capabilities to the Wi-Fi standard Still to be ratified Vezeték nélküli és mobil 2009 ősz 20 Wi-Fi mesh networking BME Definition A wireless mesh network is a peer-to-peer multi-hop wireless network in which participant nodes connect with redundant interconnections and cooperate with one another to route packets Mesh networking is an alternative to “infrastructure based” network where there is a backbone that interconnects all nodes to which the end users are connected Vezeték nélküli és mobil 2009 ősz 21 Unwire the WLAN with mesh BME AP: Access Point, STA: Mobile station, SSID: Service Set Identifier Source: W. S. Conner, J. Kruys, K. J. Kim, J. C. Zuniga, IEEE802.11s Tutorial, Dallas, 2006 Vezeték nélküli és mobil 2009 ősz 22 Properties of mesh networks BME Mesh networks are “Organic”, nodes may be added and deleted freely Fault tolerant, nodes may fail and packets will still be routed Manageable in a distributed way Of high overall capacity Challenges If there are too many nodes If there are too few nodes Security Interoperability Vezeték nélküli és mobil 2009 ősz 23 Fault tolerant property BME Source: Proxim Wireless, Mesh Technology Primer, Position Paper, 2005 Vezeték nélküli és mobil 2009 ősz 24 Fault tolerant property BME Source: Proxim Wireless, Mesh Technology Primer, Position Paper, 2005 Vezeték nélküli és mobil 2009 ősz 25 Wi-Fi mesh backbone solutions BME Single-radio mesh Each mesh node acts as AP and backbone node The same radio is used for access and wireless backhaul Dual-radio mesh The mesh APs have separate radios for client access and backhaul Typical configuration: Wi-Fi local access IEEE802.11b/g, backhaul IEEE802.11a Multi-radio mesh Access and backhaul are separated like with dual-radio Multiple radios in each mesh node are dedicated to backhaul Vezeték nélküli és mobil 2009 ősz 26 Single-radio mesh (IEEE802.11b/g) BME Source: BelAir Networks, Capacity of Wireless Mesh Networks, White Paper, 2006 Vezeték nélküli és mobil 2009 ősz 27 Dual-radio mesh (IEEE802.11b/g for access, IEEE802.11a for backhaul) BME Source: BelAir Networks, Capacity of Wireless Mesh Networks, White Paper, 2006 Vezeték nélküli és mobil 2009 ősz 28 Multi-radio mesh (IEEE802.11b/g for access, IEEE802.11a for backhaul) BME Source: BelAir Networks, Capacity of Wireless Mesh Networks, White Paper, 2006 Vezeték nélküli és mobil 2009 ősz 29 Capacity comparison of the different Wi-Fi mesh backbone solutions BME Source: BelAir Networks, Capacity of Wireless Mesh Networks, White Paper, 2006 Vezeték nélküli és mobil 2009 ősz 30 Capacity comparison of the different Wi-Fi mesh backbone solutions BME Source: BelAir Networks, Capacity of Wireless Mesh Networks, White Paper, 2006 Vezeték nélküli és mobil 2009 ősz 31 Limitations of IEEE802.11 standards BME IEEE802.11 standards are focused on the Physical and MAC (Media Access Control) layers More work is needed to define System interoperability Specific applications (e.g. Voice over IP) Roaming Core networks Vezeték nélküli és mobil 2009 ősz 32 WiMAX BME WiMAX (Worldwide Interoperability for Microwave Access) is an industrial forum that promotes deployment of “Broadband Wireless Networks” It supports IEEE802.16 family of standards Certifies interoperability of products and technology Global drive for acceptance of broadband wireless Vezeték nélküli és mobil 2009 ősz 33 WiMAX features and advantages BME Flexible architecture Point-to-point, point-tomultipoint, ubiquitous Wide area coverage Up to tens of km in LOS (Line-of-Sight) environment QoS (Quality of Service) support Supports real-time data streams Support for mobility Mobile WiMAX standard (IEEE802.16e) NLOS (No Line-of-Sight) operation Easy, quick and inexpensive deployment High capacity and data rates Flexibility in spectrum Up to 70 Mbps allocation High level of security AES and 3DES encryption standards Vezeték nélküli és mobil 2009 ősz Licensed and license-free frequency bands 34 IEEE802.16 family of standards BME Standard Frequency range 802.162004 (802.16d) 2-66 GHz 802.16e2005 (802.16e) 2-6 GHz Modulation Distance Data rate (max.) LOS: 50 km LOS: 70 Mbps OFDM OFDMA NLOS: 8 km NLOS: 40 Mbps 3 km (NLOS) 15 Mbps (NLOS) QoS Security Roaming yes high level no yes high level yes OFDM: Orthogonal Frequency-Division Multiplexing, OFDMA: Orthogonal Frequency-Division Multiple Access, LOS: Line-of-Sight, NLOS: No Line-of-Sight, QoS: Quality of Service Vezeték nélküli és mobil 2009 ősz 35 WiMAX applications and QoS BME Source: WiMAX Forum, Mobile WiMAX, May 2006 Vezeték nélküli és mobil 2009 ősz 36 Typical WiMAX network topology BME Source: Intel Corp., Understanding Wi-Fi and WiMAX as Metro-Access Solutions, White Paper, 2004 Vezeték nélküli és mobil 2009 ősz 37 Wi-Fi & WiMAX integration BME Source: Intel Corp., Understanding Wi-Fi and WiMAX as Metro-Access Solutions, White Paper, 2004 Vezeték nélküli és mobil 2009 ősz 38 WiMAX-based services BME Telcos carried out many pilot projects worldwide, but have been reluctant to launch commercial services so far First commercial operator offering mobile WiMAX-based internet-access: Sprint Sprint’s XOhm service was launched just a week ago (Sep. 29, 2008) in Baltimore, USA, planning to extend it to other cities WorldMax, The Netherlands currently nomadic access based on fixed WiMAX starting from 2H2008, more likely from 2009: mobile WiMAXbased service Vezeték nélküli és mobil 2009 ősz 39 WiMAX as a viable solution for developing countries and underserved areas BME The new wireless MAN technology is a “professional” one but suitable not only for service providers! Communities can deploy, too, using either licensed or unlicensed frequency bands As opposed to fiber or copper based infrastructures, WiMAX requires significantly less investment, offers high flexibility in installation Many non-profit, government subsidized pilot projects: Iberbanda (Spain), India, Vietnam Intel co-subsidized projects: Parintins (Amazonia), Brazil Ghana New Zealand Vezeték nélküli és mobil 2009 ősz 40 Wrap-up: Wi-Fi BME Benefits Off-the-shelf 802.11 standard products are available Cost effective initial investment Flexible deployment Vezeték nélküli és mobil 2009 ősz Challenges Shared bandwidth QoS support Interoperability of mesh devices Security 41 Wrap-up: WiMAX BME Benefits Built-in QoS support Built-in security High performance Standard based operation Flexible deployment Flexibility in spectrum allocation Interoperability Integration with Wi-Fi Vezeték nélküli és mobil 2009 ősz Challenges New technology with emerging support 42 Outline BME Introduction Community networks Available wireless technologies Design considerations Business models Summary Vezeték nélküli és mobil 2009 ősz 43 Design objectives BME Differences between planning of CNs (Community Networks), and ISPs’ and other service providers’ design methodology Requirements to take into account in the planning of CNs Ubiquitous Wi-Fi access covering the whole territory of the community (e.g. a city, a county or a province), no matter if some parts are sparsely populated and/or geographically challenged Mobility or at least nomadic access across the covered area must be supported Support of a multiplicity of user devices from simple mobile phones through PDAs and laptops to video conferencing equipment The network should support a specific set of government, business and societyrelated applications, accessible also from inexpensive communications services and user interfaces Vezeték nélküli és mobil 2009 ősz 44 Steps of the design process BME 1. Identifying applications and services 2. Identifying network technology requirements based on the applications 3. Select the key applications and services which raise requirements toward the network Analyze the requirements of the applications and services selected in the first step. This analysis should contain QoS (delay, jitter) and bandwidth parameters Identifying coverage requirements and the possibilities and limitations of the environment Determine the area which is supposed to be covered by the network, with its topography, natural obstacles such as hills or trees as well as buildings, availability of support structures, towers etc. Vezeték nélküli és mobil 2009 ősz 45 Steps of the design process BME 4. Choosing network technology 5. Planning of network topology 6. Choose optimal solutions both for the access and the backbone network. This decision should be based on the identified requirements and conditions of the environment Plan the network topology according to the topography and the optimal station placement strategies using the results of the coverage requirement analysis as well as the network technology selection Verifying original requirements Recognize the differences between the original requirements and the capabilities provided by the planned network and repeat the design if necessary Vezeték nélküli és mobil 2009 ősz 46 Design process BME A top-down approach, starting from application requirements As opposed to building an infrastructure first and then see what it can be used for… Vezeték nélküli és mobil 2009 ősz 47 Technology and configuration selection BME Application requirements We should analyze the requirements of the applications and services selected in the first step. This analysis should contain QoS (delay, jitter) and bandwidth parameters Timeframe Wi-Fi mesh is available now, however we should keep in mind that currently there is no interoperability between different vendors’ mesh products, standard is only coming. Fixed WiMAX is on the market, but prices will go down. Mobile WiMAX is new in the market Frequency issue In many countries or regions, mainly in Europe, it is difficult to obtain licenses required for WiMAX. Using unlicensed ISM band can result in weak QoS and low bandwidth because of disturbance of other devices and providers Costs A careful calculation is needed for each individual project. Equipment price is not enough to take into account (a Wi-Fi node is much less expensive than a WiMAX station). Required density of Wi-Fi mesh nodes should be considered vs. number of WiMAX base stations Vezeték nélküli és mobil 2009 ősz 48 Technology and configuration selection BME Taking into account Parameters defined by the relevant standards Calculated and measured data Technologies and conditions (Wi-Fi, Wi-Fi mesh, WiMAX LOS, NLOS, WiMAX mesh) Availability of QoS assurance We show what application scenarios the given set of technologies/parameters can be used for Vezeték nélküli és mobil 2009 ősz 49 Assumptions used BME Microcell is an area covered by one access point or mesh node in the access network. Macrocell is a union of well-connected microcells. Macrocell connects to the backbone with one or more backbone access points There is no sectorization in the multimode network topology scenarios, we use only omni-directional antennas Each mesh node has 4 mesh neighbors Wi-Fi nodes use IEEE802.11g at 54 Mbps in the physical layer Soft QoS means IEEE 802.11e standard in Wi-Fi. Managing QoS is one of the inherent features in WiMAX The delay and jitter parameters are one-way latency measures Distances and cell size parameters are based on transmission power limited by EUconform regulation at high data transfer rates for high cell efficiency The values are mostly maximum values at optimal coverage. We can increase maximum bandwidth density by decreasing the cell radius Vezeték nélküli és mobil 2009 ősz 50 Technology and conf. selection, capacity and coverage planning BME Technology No. of Max. Max. Configumicromicro-cell macro-cell ration cells in capacity capacity macro-cell Max. microcell radius Max. Max. coverage AP dist- (macro-cell ance size, 0.01 km2) Max. bandwidth density (Mbps/ 0.01 km2) 1 Wi-Fi NLOS 20 Mbps 1 20 Mbps 100 m 160 m 3 7 hotspot 2 Wi-Fi mesh Max. 2 hops NLOS 7 Mbps 25 175 Mbps 100 m 150 m 50 3.5 high density coverage (optimal) 3 Wi-Fi mesh Max. 4 hops NLOS 2 Mbps 85 170 Mbps 100 m 140 m 150 1 high density coverage with few backb. APs 4 WiMAX LOS 100 Mbps 1 100 Mbps 3 km 3 km 1000 0.1 rural, backhaul, special req’s 5 WiMAX NLOS 50 Mbps 1 50 Mbps 1 km 1 km 100 0.5 urban, suburban 6 WiMAX mesh Max. 2 hops NLOS 16 Mbps 25 380 Mbps 1 km 1 km 2500 0.15 rural, urban, suburban Vezeték nélküli és mobil 2009 ősz Typical usage 51 Comments to the table on technology and conf. selection BME Maximum microcell capacity Effective usable data rate at network layer, lower than the physical data rates defined by the given technology (decreased by 10-20% at WiMAX, 40-60% at Wi-Fi) due to multiple access Maximum microcell capacity in mesh Effective usable data rate becomes lower due to the fact that part of the capacity is used for forwarding Maximum macrocell capacity Max. microcell capacity multiplied by the no. of microcells Maximum microcell radius Achievable at max. transmit power and max. data rate It is smaller than the max. AP distance to ensure full coverage (overlapping areas exist) Area unit 0.01 sq. km is used just for convenience (an area of 100x100 m) Vezeték nélküli és mobil 2009 ősz 52 Comments to the table on technology and conf. selection No. of microcells in a macrocell M an=1+2n(n+1); n – no. of hops for n=2: an= 13 for n=4: an= 41 M M M No. of microcells in a macrocell, 2-level architecture an=1+4n(2n+1); n – no. of hops Illustration for n = 3 M – mesh node B – base station D – node with dual interface for the connection to the B and to the environment Vezeték nélküli és mobil 2009 ősz BME M M M M M M M M D M M M M M M M M M M M M M M M M M M M M M M M M M M D M M B M M D M M M M M M M M M M M M M M M M M M M M M M M M M M D M M M M M M M M M M M M 53 Technology and conf. selection, QoS planning Technology Max. microcell capacity Configuration Average delay per hop (low utilization) Average delay per hop (high utilization) without QoS Average delay per hop (high utilization) with QoS Bandwidth allocation capability BME Voice transm. capability with/ without soft QoS 1 Wi-Fi NLOS 20 Mbps 5 ms 400 ms 100 ms no yes / no 2 Wi-Fi mesh Max. 2 hops NLOS 7 Mbps 10 ms 1000 ms 200 ms no yes / no 3 Wi-Fi mesh Max. 4 hops NLOS 2 Mbps 25 ms 2000 ms 400 ms no no / no 4 WiMAX LOS 100 Mbps 20 ms 100 ms 50 ms yes yes 5 WiMAX NLOS 50 Mbps 30 ms 150 ms 50 ms yes yes 6 WiMAX mesh Max. 2 hops NLOS 16 Mbps 80 ms 300 ms 100 ms yes yes Vezeték nélküli és mobil 2009 ősz 54 Combining Wi-Fi, Wi-Fi mesh and WiMAX BME Wi-Fi will remain the only feasible customer access solution for the next 2-3 years (until mobile WiMAX cards will be as ubiquitous and cheap as expected by major players) Fixed WiMAX as backbone/distribution network and Wi-Fi access from WiMAX subscriber stations Wi-Fi is also a feasible technology to cover relatively large areas as a distribution network in mesh topology but the weak point is the backhaul and connecting the clusters Wi-Fi mesh with WiMAX backhaul and interconnection network Vezeték nélküli és mobil 2009 ősz 55 Wrap-up: technology and conf. selection in typical scenarios BME If some not frequently connected spots should be covered by a wireless network, standalone Wi-Fi access points as hotspots should be used. It can be used in LOS and, to a limited extent, in NLOS conditions. IEEE 802.11e capable devices should be used to support QoS requirements to realtime services such as voice communication Planning tables, 1st row Vezeték nélküli és mobil 2009 ősz 56 Wrap-up: technology and conf. selection in typical scenarios BME If a larger area has to be covered by a limited number of backbone access points (BAPs), Wi-Fi mesh network with only a few hops should be used. The benefits of a mesh network are simple installation and using nodes as access points for users and as retransmission points of the backbone network. More than 2-3 hops to the BAP cause degradation in effective bandwidth and also in QoS parameters. Real-time applications can tolerate this relapse up to 2 or 3 hops with 802.11e support Planning tables, 2nd and 3rd rows Vezeték nélküli és mobil 2009 ősz 57 Wrap-up: technology and conf. selection in typical scenarios BME Wide areas with low density of users should be covered by WiMAX. It can be used not only in access but even in backbone networks in point-to-point or point-to-multipoint configuration. Robustness and high data rate of WiMAX guarantees QoS and sufficient capacity in LOS and even in NLOS environment. Planning tables, 4th and 5th rows Vezeték nélküli és mobil 2009 ősz 58 Wrap-up: technology and conf. selection in typical scenarios BME WiMAX can operate in mesh mode, too. In this case, advantages of Wi-Fi mesh and WiMAX are combined. This solution is not widely implemented yet. Planning tables, 6th row Vezeték nélküli és mobil 2009 ősz 59 “Wireless City” design example in Hungary BME Objectives Estimate investment costs for several scenarios, including a pilot network Create a pilot wireless CN in a real environment Implement some “simple” applications, carry out testing and measurements Vezeték nélküli és mobil 2009 ősz 60 Area to cover BME Vezeték nélküli és mobil 2009 ősz 61 Network topology BME Vezeték nélküli és mobil 2009 ősz 62 Installation costs for 3 scenarios BME 1) Pilot 2) “Hot places” 3) “Everywhere” Qty Price Total WiMAX Base Station Set 1 9,200 9,200 WiMAX-Wi-Fi Dual Node Set 3 5,040 15,120 Wi-Fi Mesh Node Set 10 2,300 23,000 Planning and installation 6,000 Total 53,200 WiMAX Base Station Set 2 9200 18,400 WiMAX-Wi-Fi Dual Node Set 10 5040 50,400 Wi-Fi Mesh Node Set 40 2300 92,000 Planning and installation 12,000 Total 172,800 WiMAX Base Station Set 3 9200 27,600 WiMAX-Wi-Fi Dual Node Set 12 5040 60,480 Wi-Fi Mesh Node Set 55 2300 126,500 Planning and installation 18,000 Total 232,580 Vezeték nélküli és mobil 2009 ősz 63 Outline BME Introduction Community networks Available wireless technologies Design considerations Business models Summary Vezeték nélküli és mobil 2009 ősz 64 Business models for a public entity BME Getting the invested money back in short term is not of primary importance, thus longer ROIs are acceptable Maximizing the profit is not the primary objective There are important indirect benefits which result from aiding new service providers, ISPs, telecom companies, value added service providers to enter the market and grow. Hence, the public entity can obtain additional revenues from the company taxes. The public sector can significantly decrease its expenses for telecom services using the public entity’s own infrastructure. Vezeték nélküli és mobil 2009 ősz 65 Basic models of public involvement Content, Services, Applications, Customer care Customer care Broadband networks level of intervention Ducts, Masts, Poles, Colocation sites, Dark Fiber, Passive elements BME community operated services model “carriers’ carrier” (active infrastructure model passive infrastructure model Lowest level of investment: aggregation of demands Vezeték nélküli és mobil 2009 ősz 66 Legal/regulatory issues BME At government and inter-gov level: main objectives are like “Broadband services for all” (EU) At regulatory level: Permissive type clauses in USA (Telecom Act 1996), A Telecom Act reform is expected to happen. Municipalities are preparing to defend their positions. VoIP service can be one of the critical issues. In EU: “directives”, and the specific ruling belongs to the competence of national regulatory bodies. Example: offering fibre optic infrastructure is mostly allowed (maybe not directly by the public entity, a public enterprise such as a utility company can be a solution, in many European countries) From regulatory point of view this is the preferred form (physical level or infrastructure-based „unbundling”) Providing service to end-users is not advisable even if it is allowed (conflict with market players which the public entity wants to help entering the market) Providing connectivity and even telephony (VoIP) service to public administration institutions instead of leasing lines and using services from telcos Vezeték nélküli és mobil 2009 ősz 67 A possible business structure BME LG (M) Potential co-owner (m) “Infrastructure” company Potential co-owner (m) “Services” company Vezeték nélküli és mobil 2009 ősz 68 Some basic public/private models (1) BME 1 Publicly owned and operated 2 Privately owned and operated 3 Non-profit owned and operated 4 Publicly owned, privately operated 5 Owned and operated by a public utility 6 Privately owned and operated jointly with the municipality The choice of the appropriate model is influenced by regulatory issues Vezeték nélküli és mobil 2009 ősz 69 Some basic public/private models (2) BME high Complexity of management and administration by the public entity 3 Non profit 6 Private/public 1 Public/public 5 Utility 4 Public/private 2 Private/private high LevelLevel of public of public investment investment and costs and costs Vezeték nélküli és mobil 2009 ősz 70 Some statistical data on municipalities’ involvement in building and operating wireless CNs BME Municipal Wireless Business Models Report, 2007 Vezeték nélküli és mobil 2009 ősz 71 Why municipalities build/operate their own network? Vezeték nélküli és mobil 2009 ősz BME 72 Why municipalities do not build/operate their own network? Vezeték nélküli és mobil 2009 ősz BME 73 Main models and examples BME 1) The “Wireless Philadelphia” model (“private corporate franchise” model) Wireless Philadephia Several other wireless city projects in the USA Newer attempts (NSW, Australia; Fresno, CA, USA) 2) “Anchor tenant” model Corpus Christi, TX, USA Trentino, Italy 3) “Communitarian” (grassroot) models FON SparkNet, Finland Vezeték nélküli és mobil 2009 ősz 74 1) “Wireless Philadelphia” BME The Wireless Philadelphia initiative started with a pilot, covering the central districts and expanded to cover the entire metropolitan area with a total 20 million USD investment. The project was financed and implemented by Earthlink. The business model was based on providing Internet access in the city, as the level of broadband penetration is very low (below 25%) and is mainly dial-up access. Earthlink was also planning to sell bandwidth both to retail and wholesale customers. The city was planning to subsidize Internet access for low-income residents. The model did not work for Earthlink and after a long period of uncertainty about the future of Wireless Philadelphia Earthlink withdrew. Why many Type 1 models failed or are in trouble in the USA? lack of commitment by the city to the service provider false assumptions, e.g. that free internet access can be financed by advertisements internet access is not enough, business applications are needed Vezeték nélküli és mobil 2009 ősz 75 2) Corpus Christi, TX, USA BME The largest coastal city in Texas, with about 300,000 inhabitants and a very large territory of suburban character Key application: Automated Meter Reading (AMR) system for water and gas customers. The city built a pilot network covering 17 sq. miles and organized a brainstorming with stakeholders which resulted in 20+ application ideas building inspection (implemented) health care: electronic health records made available on site video surveillance city portal (implemented) The city extended the network to cover a territory of 147 sq. miles Access point density is 60-70 per sq. miles in the center and as low as one AP per sq. mile in suburbs. The city then sold the network to Earthlink Business model: city pays 500k/yr to Earthlink and saves 300k from AMR only. Earthlink provides advanced internet service to citizens and hosts applications; pays 5% from its profit to city Vezeték nélküli és mobil 2009 ősz 76 T.Net - the community network in the Province of Trento, Italy BME • Geographically difficult, sparsely populated areas • Poor broadband coverage by telco • Large public sector (including e.g. health care) • Province decided to invest in a network infrastructure –> the T.Net project Vezeték nélküli és mobil 2009 ősz 77 The Italian T.Net project (1) BME #Canazei Brez # #Pozza di Fassa #Ronzone Mostizzolo Revò #Cavareno # # Sanzeno Caldes # Cles# # Malè # Tuenno # Dimaro # #Taio Commezzadura Ossana # # # # Vermiglio Denno #Moena Predazzo# Cavalese # # #Ziano di Fiemme Tesero #Molina di Fiemme # Capriana #S. Martino di Castrozza #Ton Grumes #Sover # Mezzolombardo # S. Michele all'Adige#Segonzano # S. Antonio di Mavignola Fai della Paganella # # Cembra # Andalo #Bedollo Giovo # Zambana Pinzolo# # # Lases# Molveno# Lavis # #Pinè Fornace# Strembo# Trento nord Terlago # Spiazzo# # Civezzano # Trento S. Lorenzo in Banale # centro # #Vezzano #Pergine Madonna di Campiglio # Tione # # Preore # Trento sud # Ponte Arche Novaledo # #Lasino Levico # Dro # #Besenello Pieve di Bono# # Storo #Fiera di Primiero #Mezzano Castel # Tesino Borgo Villa Agnedo # # # Castelnuovo Grigno # # Caldonazzo Roncone # Condino# Canal S. Bovo # Bezzecca # Arco # #Riva del Garda # Molina di Ledro Volano # Rovereto centro # # Carbonare # Folgaria #Nago # #Rovereto z.i. Mori Chizzola# Avio # Vezeték nélküli és mobil 2009 ősz #Ala 78 The Italian T.Net project (2) BME T.Net - a community network project under implementation in Trentino in Northern Italy. It is part of the eSociety project of the local government, whose strategic aims are: innovation of the local economy, improvement of Public Administration efficacy, and reduction of the gap which keeps many citizens from participating in the Information and Knowledge Society. Management model: publicly controlled companies for implementation and management of the broadband infrastructure, supply of transport services, connectivity and IT services for public administration, renting infrastructure to market operators under fair and non-discriminatory conditions. The network consists of a fiber optic backbone and a pre-WiMAX-based (HiperLAN-2) wireless access network. The number of backbone nodes will be 78 with the total length of optical cable over 750 km. The network will connect in total 223 municipalities. Vezeték nélküli és mobil 2009 ősz 79 The Italian T.Net project (3) Network technology Vezeték nélküli és mobil 2009 ősz BME 80 Creating a business model BME Voice traffic, internal needs: It can be usually assumed that 40% of the traffic is internal (and can be totally carried by the CN) and that a 20% cost cut can be achieved on the external traffic by using the community network before reaching the external world. Data traffic, internal needs: On the data and information related traffic, it is reasonable to assume a conservative scenario, where the bandwidth growth and the price reductions will compensate each other. Wholesale of excess capacity: Scenarios are to be drawn up for two different types of customers: (i) telecom operators; and (ii) business customers. It can be usually assumed that 1-2 out of the potential telecom operators and ISPs will be customers of the CN for the near future. Investments: Here we need a total investment figure, the total length of the investment period and the division of investments over that period. The model should also include depreciation calculation for different periods. Financial assumptions: Include the total needed equity and its division into own equity and external financing. The repayment conditions of external financing have to be taken into account, too. Operational costs: The operational costs can be split into three main groups: Operation & Maintenance, Personnel costs and Other costs. Vezeték nélküli és mobil 2009 ősz 81 Results from a particular set of assumptions Profit & Acc. Profit for the BC Cash Flow excluding financing & equity 15 000 20 000 Profit 13 447 10 000 1 362 4 900 3 279 6 518 BME 8 612 10 884 10 000 Accumulated Profit 5 000 0 2004 th. € 2005 2006 2007 2009 2008 2010 2011 2012 2013 0 th. € -10 000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 -5 000 -20 000 -10 000 -30 000 -29 534 -32 695 -15 000 -32 585 -40 000 Year Vezeték nélküli és mobil 2009 ősz -20 000 Year 82 3) Communitarian (grassroot) models BME Based on sharing internet connections among the members of the community FON: “the largest Wi-Fi community in the world” FON router (La Fonera), Foneros, non-Fonero users Cooperation with service providers (e.g. British Telecom) FON communities are growing in: Geneva, Oslo, Munich, Tokyo, New York, San Francisco Why FON-type models are of interest? failure of type 1) models in many cities in the USA lack of public money and/or lack of interest from commercial operators to build CN infrastructures Can FON-type networks serve as CN infrastructures? Yes and no. for plain internet access and for applications that do not demand high bandwidth and QoS: yes availability issue for QoS-demanding applications and services: no Vezeték nélküli és mobil 2009 ősz 83 Outline BME Introduction Community networks Available wireless technologies Design considerations Business models Summary Vezeték nélküli és mobil 2009 ősz 84 Summary BME CNs should not be technology driven Identifying key applications and anchor customers is critical The exact form of public-private cooperation/partnership depends on willingness and capabilities of local governments to invest and manage the investment willingness of market players to become partners finding business models that satisfies both sides’ interests Technology planning includes selection of the most suitable wireless technology planning methodology for coverage and quality of service is needed Two key broadband wireless technologies Wi-Fi Mesh WiMAX (currently fixed, in near future mobile) and combinations, e. g. Wi-Fi mesh with WiMAX backbone Planning for coverage and QoS Vezeték nélküli és mobil 2009 ősz 85 Future trends BME Applications new applications based on geospatial information systems example is services for tourists: accessing maps, getting directions, finding shops, restaurants and lodging, learning about local attractions and programs enabling technologies are GPS and the emerging WPS (Wi-Fi based positioning) Wireless technologies Mobile WiMAX is coming, ? if it will meet the expectations of Intel and others B3G (Beyond 3G) cellular mobile systems such as LTE Vezeték nélküli és mobil 2009 ősz 86 Some references BME C. Szabó, I. Chlamtac and E. Bedő, "Design Considerations of Broadband Community Networks," Proceedings of 37th Annual Hawaii Int’l Conf. on System Sciences (CD/ROM), January 5-8, 2004, Computer Society Press, 2004. Ten pages. Chlamtac I., Gumaste A., Szabo C. A., Broadband Services: Business Models and Technologies for Broadband Community Networks, Wiley, 2005. W. S. Conner, J. Kruys, K. J. Kim, J. C. Zuniga, IEEE802.11s Tutorial, Dallas, 2006. Szabó C. A., Horváth Z. and Farkas K., “Wireless Community Networks: Motivations, Design and Business Models”. Proc. WICON07, Oct 22-24, 2007, Austin, TX, USA. Also in: Mobile Networks and Applications, Springer, 2008. Proc. 2nd Annual European Congress on Wireless & Digital Cities, Cannes, 26 Sep 2007. F. Botto, S. Danzi, E. Salvadori, C. A. Szabo, A. Passani, “Digital Ecosystems and the Trentino Community Network,” OPAALS (EU NoE project) report D7.2, January 2008. K. Farkas, C. Szabo, Z. Horvath, „Planning of Wireless Community Networks”, in: Handbook of Research on Telecommunications Planning and Management for Business, Editor: In Lee, Publisher: Information Science Reference, 2008, to appear. Vezeték nélküli és mobil 2009 ősz 87