Frequently Asked Questions about Customer Owned Dark Fiber, Condominium Fiber, Community and Municipal Fiber Networks

Bill St Arnaud bill.st.arnaud@canarie.caLast revised March 31, 2002

Future questions:

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“This FAQ is intended to provoke further thought and debate on the costs and related issues of customer owned fiber. The data and information presented here are mine alone and do not necessarily reflect those of the CANARIE board, management or members.”

For the most recent version and other related material please go to the CA*net 3 web site at http://www.canet3.net/library/papers.html

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1. What is customer owned dark fiber?2. What is condominium fiber?3. What are community or municipal fiber networks?4. What is the advantage of customer owned dark fiber to schools, hospitals and libraries?5. What is the advantage of customer owned dark fiber to a large businesses?6. What is the advantage of customer owned dark fiber to a small business?7. What is the advantage of customer owned dark fiber to high rise office building owners and

managers?8. What is the advantage of customer owned dark fiber to universities and research institutes?9. What is the advantage of customer owned dark fiber for the consumer or home owner?10. What is the advantage of customer owned dark fiber to Internet Service Providers?11. What is the advantage of customer owned dark fiber to municipalities and governments?12. What are Right of Ways and Municipal Access Agreements (MAA)?13. What are carrier neutral collocation facilities?14. What equipment do I need to light up dark fiber?15. What is the typical costs of customer owned dark fiber?16. What are the some detailed cost components of customer owned dark fiber?17. What are the ongoing yearly costs for customer owned dark fiber?18. How reliable is dark fiber?19. Does dark fiber increase my network management costs and complexity?20. Won’t dark fiber become obsolete like other telecommunication technologies?21. Does this mean that governments are becoming telecommunication service providers?22. What role do regulators and government play with respect to condominium fiber?23. Who manages and repairs the dark fiber in case of breaks or other problems?24. Isn’t the big trend toward outsourcing all telecommunication and data services?25. How do I find out where to buy dark fiber in my area?26. How do I go about starting a condominium fiber network?27. Can customer owned dark fiber be used for long haul?28. Is there any business case analysis on the benefits of dark fiber?29. What about moves, adds, changes and fiber relocation services?30. Is customer owned fiber the same fiber used by the carriers?31. What is an IRU?32. What is “jet fiber” or “micro conduit”?33. What is the typical span loss for optical fiber?34. What happens in case of fiber break?35. Won’t the new wireless technologies eliminate the need for fiber?36. Don’t governments have a poor track record in picking technology winners?37. What are some of the disadvantages of dark fiber?38. What are some of the future trends with dark fiber?39. Should I buy fiber or wavelengths?

40. Where can I get sample documents for dark fiber RFPs, IRUs, etc?41. Where can I get additional information on customer owned dark fiber?

1. What is customer owned dark fiber?

Dark fiber is optical fiber, dedicated to a single customer and where the customer is responsible for attaching the telecommunications equipment and lasers to “light” the fiber. Traditionally optical fiber networks have been built by carriers where they take on the responsibility of lighting the fiber and provide a managed service to the customer.

With customer owned dark fiber networks the end customer owns and controls the actual fiber and decides to which service provider to whom they wish to connect for services such as telephony, cable TV and Internet. However, most customer owned dark fiber deployments are used for delivery of Internet service.

Professional 3rd parties companies who specialize in dark fiber systems take care of the actual installation of the fiber and also maintain it on behalf of the customer. Technically these companies actually own the fiber, but sell IRUs (Indefeasible Rights of Use) for up to 20 years for unrestricted use of the fiber. These companies also are responsible for the managing the complex relationship of agreements with the municipality and other on use of right-of-way, construction, maintenance, etc

There is no additional management complexity or overhead associated with customer owned dark fiber. In fact in many cases customer owned dark fiber may be more reliable than traditional telecommunication services and easier to manage because it vastly simplifies the network architecture and allows the consolidation of network services to a central hub.

In addition customer owned dark fiber provides for increased competition among service providers and levels the playing field amongst all service providers for the delivery of telecommunication services. With customer owned dark fiber, customers build networks to carriers, rather than the traditional model where carriers build networks to customers.

With customer owned dark fiber, the customer can now interconnect to the carrier(s) of their choice at a convenient meet-me point such as a school board office, municipal building or a carrier neutral collocation facility. This is particularly advantageous for the interconnection to new smaller innovative communication companies or ISPs who cannot afford to build expensive physical network infrastructure.

In essence customer owned fiber is moving the demarcation point where the carrier interconnects to the customer. In the old days of telephone monopoly the demarcation point was in the customer’s home as the carrier owned the telephone and the inside wiring. With competition the demarcation point has moved to the edge of the customer premises. But with low cost fiber and new LAN based Ethernet technologies the demarcation point is moving closer and closer to the carrier.

An excellent report on the advantages of customer owned dark fiber is available from New Paradigm Resources Group, Inc. It lists over 50 condo fiber builders in the US. “Competitive Telecom Issues” Vol 10 No 2, February 2002 http://www.nprg.com

2. What is condominium fiber?

All across North America businesses, school boards and municipalities are banding together to negotiate deals to purchase customer owned dark fiber. A number of next generation service providers are now installing fiber networks and will sell strands of fiber to any organization who wish to purchase and manage their own dark fiber.

Many of these new fiber networks are built along the same model as a condominium apartment building. The contractor advertises the fact that they intend to build a condominium fiber network and offers early participants special pricing before the construction begins. That way the contractor is able to guarantee early financing for the project and demonstrate to bankers and other investors that there are some committed customers to the project.

The condominium fiber is operated like a condominium apartment building. The individual owners of fiber strands can do whatever they want they want with their individual fiber strands. They are free to carry any type of traffic and terminate the fiber any way they so choose. The company that installs the fiber network is responsible for overall maintenance and repairing the fiber in case of breaks, moves, adds or changes. The “condominium manager” charges the owners of the individual strands of fiber a small annual maintenance fee which covers all maintenance and right of way costs.

3. What are community or municipal fiber networks?

Many municipalities are now looking at the advantages of condominium or customer owned fiber. Not only do these networks substantially reduce telecommunication costs, but they have also can significantly increase the number of competitive service offerings because any service provider can also purchase strands of fiber.

It is not necessary that municipality or community own the fiber or build the networks themselves. Municipalities and communities can encourage the deployment of condominium fiber networks in their jurisdiction by tendering their existing telecommunication business only to those companies that will deploy such networks. In some cases provincial, state and federal governments can play a critical leadership role by providing additional funding to make sure that all communities can enjoy the benefits of condominium fiber networks. A couple of excellent examples of this model are:

For Chicago CivicNet see http://www.cityofchicago.org/CivicNet/civicnetRFI.pdf

For Alberta SuperNet see http://www.canarie.ca/advnet/workshop_2000/presentations/cheney.pptwww.albertasupernet.ca

For the Stockholm municipal network Stokab at www.stokab.se

For The Peel Municipality network at http://www.canarie.ca/advnet/workshop_2000/presentations/wiseman.ppt

There is also an excellent White paper: “The case for Municipal Fiber Network” http://www.smartwinnipeg.mb.ca/Municipal_Fibre.htm

The Government of Sweden has also produced a useful guide for municipalities on building municipal fiber networks: "General Guide to a Future Proof IT infrastructure". The document describes in some detail, how communities and municipalities can deploy open access conduit and dark fiber to help promote a low cost IT infrastructure.

http://www.itkommissionen.se/extra/document/?id=347

Another excellent resource for Right of Way issues and deployment of municipal fiber networks is the American Public Works Association

http://www.apwa.net/ResourceCenter/index.asp?Section=row&SectionName=Right+of+Way+Management

4. What is the advantage of customer owned dark fiber to schools, hospitals and libraries?

The organizations that are usually the earliest beneficiaries for dark fiber are schools and school boards. The initial primary driver for dark fiber by individual customers is the dramatic savings in telecommunication costs. The reduction in telecommunication costs can be in excess of 1000% depending on your current bandwidth requirements.

A typical dark fiber connection may cost one time $25,000. If your organization is currently leasing an OC-3 circuit (155 Mbps) it could be paying anywhere between $3000 - $6000 per month which results in an annual cost greater than purchasing dark fiber. If your organization is leasing local loops with greater capacity then OC-3 the cost savings can be more dramatic.

The typical payback for dark fiber as opposed to purchasing managed bandwidth is 12 to 18 months. And for this short payback the customer gets a “future proof” network for the next 20 years where there is no increase in local loops costs as the customer’s bandwidth demands increase except to upgrade the equipment at the ends of the fiber.

Some of these benefits customer owned dark fiber include:

(a) Significantly reduced local loop costs for connecting each school to the central school board office. Typical average cost to connect up a school is $US 25, 000 per school for a 20 year IRU. In some cases the fiber can be leased at price of typically around $400 per month per school.

(b) Reduced network management complexity in that only simple and easy to use Fast Ethernet or Gigabit Ethernet transceivers are needed at each end of the fiber

(c) No additional costs to increase the bandwidth of the network other than to upgrade the transceivers at the end of the fiber.

(d) Dramatic reduction in the number of network, Web and LAN servers. With dark fiber the individual school LANs can be extended to the central school board office. All of the servers can be relocated to the central site and aggregated into single server systems. This significantly reduces network management and complexity.

(e) Significant reduction in network staff and travel, as most of the LAN and network servers are relocated to a central site.

(f) A greater choice of service providers for Internet and other advanced services. For those school boards that use a carrier to connect to the school are then limited to in most cases one or two carriers who can connect up the schools in their district. But if the schools purchase their own fiber they can aggregate their traffic and then connect to a greater choice of service providers at the central school board office. It also makes their network business more attractive for out sourcing.

(g) Development and deployment of new applications and services that would not be possible with a limited bandwidth service. Many schools with dark fiber, for example, are putting Internet telephones on each teacher’s desk. With a dark fiber network there is no additional cost to provide such service, except for the purchase of the telephone itself. Other applications include video conferencing and distance education.

CANARIE and Industry Canada have contracted with independent consulting firm to document the benefits and savings of school boards deploying their own dark fiber networks. A presentation on the study is available on our web site at http://www.canarie.ca/advnet/workshop_2000/presentations/waldron.pdf

Another excellent report on dark fiber for schools has been commissioned by Australian Commonwealth Department of Education, Training and Youth Affairs

An online copy of the report (in PDF or HTML format) can be found at:http://www.detya.gov.au/schools/publications/2001/bandwidth/finalrep.pdforhttp://www.detya.gov.au/schools/publications/2001/bandwidth/index.htm

However, school boards should be careful to compare total solutions package where a carrier owns and manages the fiber to the school versus purchasing their own dark fiber. Many school boards and governments are enticed with the worry free management of wide are network where the carrier owns the fiber to the school or other facility. While this may be attractive at first, it will limit the school in terms of its future options. When a school board goes to renew their contract a few years down the road, the incumbent carrier who installed the initial fiber will have a competitive advantage over any other new entrant in the marketplace who must now also install fiber to the school.

As most schools are located in suburban/rural areas, there is rarely a business case for a second carrier (never mind a third or fourth) to build a fiber network to the school. When the school comes to renew its service contract it will discover that the original provider will have a significant competitive advantage over any other service provider.

Schools, because of their geographic location and because they are usually the first organization to acquire dark fiber in the community have a responsibility, perhaps more so than any other organization in the community, to ensure a level playing field and not to confer competitive advantage to any single carrier.

5. What is the advantage of customer owned dark fiber to a large businesses?

Many large businesses have been acquiring dark fiber for some time now. The advantages for a large business are as follows:

(a) significant reduction in local loop telecom costs;(b) centralization of servers from remote offices scattered around a city;(c) ability to capitalize telecom expenses rather than treating them as an ongoing service cost;(d) ability to deploy redundant paths to multiple carriers. Usually, in the past, this has been

done by purchasing to separate SONET services from different carriers at considerable cost;

(e) outsourcing LAN, storage and network servers;(f) relocation of speed sensitive network servers to a server farm. Normally speed sensitive

servers such as LAN based video and audio servers have to be located on the LAN next to the user. However as there are no speed limitations with dark fiber these servers can be easily located at a central server;

A number of integrators and out sourcing companies will arrange the dark fiber connections for a large business as part of the out sourcing package.

6. What is the advantage of customer owned dark fiber to a small business?

Surprisingly, even small businesses with fewer than 30 employees can benefit from customer owned dark fiber. This is particularly true of new high tech e-commerce or other web based businesses. The advantages for a small business are as follows:

(g) Significant reduction in local loop telecom costs;(h) Ability to capitalize telecom expenses rather than treating them as an ongoing service cost;(i) “Customer facing” servers such as e-commerce servers, web hosting servers, etc can be

located at carrier neutral collocation facility where there is redundant power, 24 hour security, and multi homing services are located. If the telecom link between the collocation facility and the office goes down, no customers are affected.

(j) Outsourcing LAN, storage and network servers;(k) Relocation of speed sensitive network servers to a server farm. Normally speed sensitive

servers such as LAN based video and audio servers have to be located on the LAN next to the user. However as there are no speed limitations with dark fiber these servers can be easily located at a central server;

7. What is the advantage of customer owned dark fiber to high rise office building owners and managers?

Increasingly large building owners are facing congestion in their telecommunication risers from all the new entrant telecom companies who want access to their tenants. A number of large building owners have now declared a moratorium on new entrants. In fact some building owners are proposing that no carriers be allowed into the risers. Instead the building owners themselves are installing fiber in the risers (usually 2 risers for redundancy purpose) from each tenant to equipment room in the basement where they interconnect to the carriers.

But even then that is a partial solution. The access ducts to the building is becoming congested as well as the equipment room in the basement. The next logical step is to extend the tenant’s fiber beyond the basement to a nearby open collocation facility. The building owner may acquire 48 or more strands of customer owned fiber to at least 2 separate collocation facilities. As part of the leasehold package the tenant can lease this fiber for the duration of their building lease to access a service provider of their choice at the collocation facility.

In many cities, companies are building collocation facilities to allow the interconnection of networks between competing service providers and for the hosting of web server, storage devices, etc. In fact, many of these facilities are being built by the same companies that have also own large high rise buildings. The collocation facilities are rapidly becoming the obvious location for terminating customer owned dark fiber. With a simple change in the optical patch panel in the collocation facility the customer can quickly and easily change service providers on very short notice.

The tenants in such buildings can then lease several dark strands fiber within these trunks to one or more of the carrier neutral collocation facilities.

By leasing fiber to separate collocation facilities the tenant is assured of route diversity and redundancy in case of a fiber break. The building tenants can now easily outsource their web and network services to a number of competitive out-sourcing companies located at the carrier neutral collocation facility. With dark fiber there are no worries about congestion or bandwidth bottlenecks for the business to access its own server.

In summary the benefits of customer owned dark fiber to large building owners are:

(a) It eliminates congestion in the risers and thereby saves valuable floor space;(b) It significantly reduces cost of telecom services for tenants;(c) It reduces congestion in the building access ducts and machine rooms;(d) It allows for a new line of business to give the tenants the ability to outsource their server to a

collocation facility, particularly if that facility is also owned by the building owner;(e) It provides for a greater choice of server providers for the tenants in being able to access a greater

number of service providers at the collocation facility; and(f) It allows the tenants to establish redundant and diverse paths to 2 different service providers at 2

different collocation facilities.

8. What is the advantage of customer owned dark fiber to universities and research institutes?

In addition to the many benefits of dark fiber for school and large businesses and universities as listed above customer owned dark fiber has a number of significant advantages for universities and research institutions:

(l) It significantly reduces telecom costs in connecting satellite campuses;

(m) It allows the deployment of new high bandwidth applications without a bandwidth cost penalty; and

(n) It allows the testing and deployment of new optical technologies that would not be possible with a managed carrier service

9. What is the advantage of customer owned dark fiber for the consumer or home owner?

The Fiber To The Home (FTTH) market is still in its infancy. However, customer owned dark fiber is increasingly being seen as a superior alternative to the current proposed approaches for FTTH by the telephone and cable companies.

A number of entrepreneurs and small companies are exploring concepts where the homeowner has title to their own strands of fiber in a neighbourhood FTTH build. The advantage of this approach is that the FTTH systems can be deployed in areas of low density and very small take up (ie. Less than 5%). Rather than treating the network as an expense, the network infrastructure is seen as an investment by the homeowner. When a FTTH system is first deployed the initial customers (individual homeowners or other parties) make an investment of between $10,000 to $40,000 for each customer drop. Their investment is secured by IRUs on a number of fiber strands – anywhere from 12 to 96 strands. As additional customers in the neighbourhood are signed up for service by the condominium fiber manager the strands are purchased by the new customers from the initial investors. This way the initial investors can see a significant return on their investment ( as much as 500% return) and yet have the confidence in knowing that their investment is secured by the underlying IRUs (as opposed to shares in a CLEC or condominium fiber company).

As an example of the benefits of customer owned dark finer, in Stockholm, where the city has been deploying dark fiber for a number of years, consumers have a choice of 4 cable companies. While in North America competitive service providers are battling for access to a single monopoly service provider.

Several companies are now developing technology for deliver of Ethernet to the Home. The beauty of this technology is that it uses a well know open standard for the delivery of service. The technology can used to support voice, video and extreme high speed data.

Ethernet delivery of services can be best accomplished with optical fiber. The big challenge for governments is whether the deployment of broadband services to the home be a monopoly service like the cable and telephone model where the service provider owns the infrastructure, or an open model where the consumer owns (and delegate management to a service provide of their choice) the infrastructure and connects to the service provider of their choice at open collocation facility?

Carriers who have built telecom infrastructures under government regulated monopoly have a significant advantage in the market place. If the consumer owns or controls the infrastructure they can then connect to the service provider of their choice. More importantly it levels the playing field as it allows small service provider who cannot afford to build a costly infrastructure to sell services to the consumer.

For more information please see the FTTH council web site at: www.ftthcouncil.org. For a great example of how some home owners deployed their own fiber network as a cooperative venture please see http://www.acc.umu.se/~tfytbk/mattgrand . This is an example of how some entrepreneurial Swedes who built a 100 Mbps Internet network for about 60 homes in a neighbourhood in Northern Sweden.

10. What is the advantage of customer owned dark fiber to Internet Service Providers?

Many service providers cannot afford to build a large telecommunications infrastructure. Carriers who have built such infrastructures under government regulated monopoly have a significant advantage in the market place. However, if the customer owns the fiber then they can connect to the service provider of their choice at a carrier neutral collocation facility. Customer owned dark fiber levels the playing field and gives all ISPs an equal opportunity to capture the customer’s business.

The customer can delegate management of the fiber to the service provider of their choice for the life of the service contract. The service provider is then responsible for fiber maintenance and end to end service. However, when the customer owns the fiber they can change service providers at any time ( or at the end of the service contract) to some other service provider and enter into a similar arrangement where the new service provider is responsible for end to end performance.

Carrier neutral collocation facilities are an essential component of providing such an arrangement. Carrier neutral collocation facilities with fiber “meet-me” rooms allow the organizations with customer owned fiber to easily switch from one service provider to another.

11. What is the advantage of customer owned dark fiber to municipalities and governments?

When independent carriers deploy their own fiber networks to the customer premises each provider needs to deploy separate fiber cable to virtually very building and within every riser in each building. This results in a significant number of independent fiber cables and hence road trenching that is required to interconnect all the downtown buildings with the multitude of service providers.

The other result is that many municipalities are declaring moratorium on digging up the roads by carriers who want to install new fiber cables. As well many cities are refusing to grant new construction permits for any road section that has been repaved or rebuilt within the last 5 years. The companies that have already deployed fiber then have a de facto monopoly for the next 5 years. If customer or service providers cannot purchase dark fiber at a reasonable cost it them becomes very difficult for downtown businesses to connect to competitive service providers.

In recognition of this issue some cities are being proactive and are providing incentives or mandating that carriers install additional open access conduit when they dig up the road to install new fiber, or provide open access fiber at an agreed upon price. Municipalities can leverage their existing telecommunication procurements and their private right of ways to negotiate open access fiber builds throughout their jurisdiction.

An excellent example of this approach is the Chicago CivicNet project where the City of Chicago will offer its annual telecommunications budget of $US 25 million and access to city ducts, subway tunnels and other facilities to companies who will install open access condominium fiber to all public sector buildings in the city. For more information please see http://www.cityofchicago.org/CivicNet/civicnetRFI.pdf

The province of Alberta in Canada has launched a similar initiative for all 430 plus municipalities in that province in a project called SuperNet www.albertasupernet.ca. In this example the province offered its telecommunication business plus $CDN 183 million to a consortium of carriers to deploy open access condominium fiber to all schools, libraries and hopitals in every community in the province. The provinces holds title to the IRUs on all the fiber and then earns back its investment as the fiber strands are sold off to competitive service providers, school boards, etc. See http://www.canarie.ca/advnet/workshop_2000/presentations/cheney.ppt.

There are also some excellent documents on the benefits of community fiber infrastructure at http://www.bev.net/project/digital_library/ that discusses the key structural impediments to an open telecommunications marketplace in communities and neighborhoods, reviews some of the history of community infrastructure investment, and offers some steps that communities can take to begin to create a level playing field for open, private sector investment in telecommunications.

12. What are Right of Ways and Municipal Access Agreements (MAA)?

Deploying fiber networks involves entering into legal contracts with both the local municipality as well as owners of any existing support structures, such as poles and ducts.. The public right-of-way is a crowded and complex environment to work in whether on surface, subsurface or aerial infrastructure. Unfortunately, there is far, far more involved than simply just tacking some cable onto existing utility poles, albeit the use of existing poles would appear to be the least complex approach for a fiber builder.

By law if someone places cable in or on someone else's support structures in the public right-of-way, two legal rights are involved. Firstly, it is necessary to have the permission of the pole (or duct) owner to install the cable. This involves the use of someone else's property and as with any other commercial transaction, the owner of the property has the right to charge compensation in accordance with policies established by national and local regulators. The usual process is to enter into a Support Structure Agreement (SSA) with the pole or duct owner. The pole or duct owner may have their own set of requirements including a number of upfront and ongoing insurance and liability requirements. As well as records and drawings must be professionally done and provided to the support structure owner.

The second right involved is the right to use the public right-of-way i.e. municipal property. Most cities require any organization that is deploying a fiber network on PROW to enter into a Municipal Access Agreement (MAA). The pole (or duct) owner would have been given (in his MAA) a very specific right to use the public right-of-way for a very specific purpose (its like an easement). The pole owner has no legal right to pass on the right to use the public right-of-way to any other party who may wish to place cable on the owner's poles. Thus any other entity that wishes to place cable on the owner's poles, in addition to an agreement with the pole owner, requires its own MAA with the municipality for the use of municipal property. This MAA

would provide the necessary indemnification and all the other protections and assurances that the municipality on behalf of the public needs.

As part of the MAA there are usually a number of upfront and ongoing insurance and liability requirements. Records and drawings must be professionally done and provided to the municipality. The fiber builder is usually responsible for any future relocation costs should that be necessary.

Compensation to the municipality is usually required. Most municipality’s policy is to recover all its costs from proponents to ensure that any costs incurred by the municipality are ultimately borne by those who specifically benefit and not by the general taxpayer. The property tax payer should not be progressively out-of-pocket as a result of an increasing use of the public rights-of-way by private entities. Such a back-handed subsidy might also induce certain uses to proceed when they would not otherwise be viable without specific public support. Such a situation might also inhibit the evolution and deployment of more efficient and effective uses. Some municipalities also to charge a fee for the use of municipal property.

If the fiber is buried, any time any other entity wishes to excavate, even to place a sign, for safety and co-ordination reasons, the owner of the fiber build must have the facility physically marked in the field. It must be possible to reach someone in the event of emergencies (24/7). Maps, plans and drawings of potentially conflicting works by others must be reviewed on a regular basis. The frequency of needing field locates and having to review potentially conflicting plans is high and continues for as long as the fiber is in the right-of-way. Some municipalities require fiber builders to belong to a one-call damage prevention service and to demonstrate that they can achieve industry standards in everything from construction to the field locates. On an on-going basis, the fiber builder must obtain permits from the municipality and co-ordinate its future maintenance works with the municipality and other users of the public right-of-way. To protect the public the municipality needs to know who, what, when, where and usually the why and how of what is happening on its property. There are all sorts of industry standards that must be adhered to as well for safety and reliability reasons.

Thanks to Lorne Ross for these comments

13. What are carrier neutral collocation facilities?

In many cities, companies are building facilities to allow the interconnection of networks between competing service providers and for the hosting of web server, storage devices, etc. They are rapidly becoming the obvious location for terminating customer owned dark fiber.

These facilities feature diesel power backup systems and the most stringent security systems. The facilities are open to carriers, web hosting firms and application service firms, internet service providers, etc.

Most carrier neutral open collocation facilities feature a “meet-me” room where fiber cables can be cross-connected to any service provider within the building. With a simple change in the optical patch panel in the collocation facility the customer can quickly and easily change service providers on very short notice.

Many of these concepts of carrier neutral collocation facilities were first developed with the next generation Internet programs in the United State and Canada with a concept called a GigaPOP. Leading researchers and universities recognized that there were many benefits to interconnecting to carriers at a common “meet me” point. So rather than having multiple carriers build separate facilities to university campuses, the universities instead built one single telecommunication facility to a GigaPOP and then interconnect to one or more carriers on a new demarcation point that was not on the customer premises.

When selecting a fiber provider, care should be taken to see if their fibers terminate at carrier neutral collocation facilities. Some fiber providers only terminate their fiber in their own central offices which makes it difficult to interconnect to other service providers or attach your own equipment to the fiber.

14. What equipment do I need to light up dark fiber?

With customer owned dark fiber, simple laser devices, called transceivers are all that is required to light up the fiber. These devices will work with SONET, ATM and Ethernet devices at either end of the fiber connection. As such there are only 3 things that can wrong with a customer owned dark fiber – the source transceiver, the destination transceiver or the fiber itself.

Transceivers for Ethernet data can drive fiber up to 120 km. The following are typical distance and prices for Ethernet transceivers:

(a) Fast Ethernet (100 Mbps) transceivers can drive fiber up to 80 km and will run about $US 700 per end

(b) Gigabit Ethernet transceivers will drive up to 60km and will run about $US 2000 per end.

Prices for transceiver are dropping dramatically. Already 10 Gigabit Ethernet transceivers chip sets that will drive 40 km of fiber are being sampled at less than $US 100. These transceivers usually can be controlled and managed by standard LAN management systems.

There are numerous companies that sell fiber transceivers. For more information please see www.light-wave.com. Most Gigabit Ethernet equipment manufacturers include long haul lasers and can be directly attached to the dark fiber as well.

15. What is the typical costs of customer owned dark fiber?

Customer owned dark fiber is still a very immature industry. As such costs for fiber can be extremely variable from as little as $.50 per meter per strand to $6.00 per meter per strand for a 20 year IRU. Part of the problem is simple economies of scale. The biggest cost component of fiber networks is the installation cost. The installation cost is virtually the same whether you are installing a 12 or 864 strand cable. Fiber networks deployed with 12 to 48 strands have a much higher cost per strand cost than 864 strand systems. Other complicating factors depend whether roads have to be trenched to lay down the fiber, or whether existing support structures such as poles and conduit can be used for the installation of the fiber.

For budgetary purposes $2 - $3 per meter per strand-pair can be used for a 20 year IRU for existing fiber. Additional strands do not significantly increase the cost. So a budgetary price for 4 or 6 strands of fiber may be around $4 per meter. The prices are the same whether it is Canadian or US dollars.

The key thing to note that this is the one time up front cost for the purchase of a 20 year IRU. The IRU can usually can be considered as a physical asset which can be re-sold, traded or used a collateral. As such, the cost of an IRU can be amortized over its 20 year lifetime which results in a monthly cost substantially below traditional telecommunication services.

If your organization is required to go through a RFP process to purchase dark fiber on an existing build you will probably not get much better pricing than these budgetary numbers. But because the fiber industry still is a very immature and underdeveloped, sophisticated customers who are able to “wheel and deal” can get much better pricing outside of a standard RFP pricing mechanism. By agreeing to pay for certain build outs and swapping fibers with other new entry carriers knowledgeable fiber customers can reduce their per strand cost to less than $.10 per meter per strand. In some jurisdictions independent fiber consultants are available who can also negotiate very attractive pricing.

Ultimately however as the industry matures and large optical cables with 864 strands or greater or routinely deployed the cost of dark fiber is expected to drop down to $.07 to $.10 per meter per strand.

16. What are the some detailed cost components of customer owned dark fiber?

Dark fiber is made up of 3 different cost components:

(a) Trunks;(b) Laterals; (c) Building entrances; and(d) Termination panels

Trunks are the main fiber cables that may carry hundreds of fiber strands owned by a variety of carriers and institutions. Laterals are the fiber cables from the customer premises to the nearest splice point on the cable trunk. Generally laterals are used exclusively by the customer and therefore the customer must pay for the full cost of the cable and its installation. Within cities laterals can be short as few meters. They can extend several kilometres in suburban and rural areas.

In some cases the costs of a lateral, particularly in suburban and rural areas can be more costly than the much longer fiber run on a trunk cable.

The minimum size of a lateral is usually 12 strands. But even though a lateral may have 12 strands, only 2 or 4 of those strands may be spliced to dedicated fibers on the trunk. Most fiber provisioning companies provide additional spare strands on the trunk to which the customer can connect to at a later date for an additional cost.

Building entrances and termination panels are the facilities within the customer’s premise for the termination of the fiber. As a rule of thumb a building entrance with fiber panel termination is about $US 5000, but may very from as little as a few hundred dollars to $15,000 – $20,000. The large variation in cost is due to many factors including whether the installers have to drill through concrete walls to terminate the fiber and/or bring up the fiber several floors in a riser.

For either trunks or laterals the basic cost calculation is the same. Overwhelmingly the single biggest cost is the installation of the fiber itself. On fiber trunks the cost of the installation is shared amongst the owners of the individual fiber strands and so on a large cable trunk of 864 fibers the installation cost per strand can be quite small. On laterals there is generally no other users, so the customer must pick up 100% of the cost.

There are 4 types of fiber installation:

(a) Aerial on existing poles ($3 - $6/meter);(b) Buried in existing conduit ($7 - $10/meter);(c) Jet fiber in micro conduit ($3 - $15/meter); and(d) New trenching and laying of conduit ($35 - $200/meter).

Installation charges are almost entirely made up of labour costs, so the numbers quoted above are pretty well the same whether they are stated in Canadian or US dollars.

Aerial installation on existing poles is by and far the cheapest installation method and the most reliable. Most regulatory bodies have well established rules and procedures for licensed carriers and fiber installers to access existing utility and telephone poles. The variation in the cost of aerial installation is largely dependent on how accessible the poles are from the street. If the poles are in the backyards and only accessible by foot then the installation costs are at the higher end of the range stated above. If the poles run right along the roadside then installation can be done directly from the truck on the roadside.

Installation in existing conduit is the next best option. Many municipalities and regulators require carriers to install extra conduit accessible by any other licensed carrier or fiber installer. As with poles regulators have set prices for the cost of access to this conduit.

Jet fiber is a new approach to fiber deployment. In this case the fiber provider only installs “micro conduit” instead of fiber. When a customer requires a fiber pair it is blown into the micro conduit on demand. The advantage of this approach is that far fewer splices are required and the fiber can be blown all the way into the customer premises. Currently the capital cost of jet fiber is higher than for traditional approaches but it is expected that the on-going systems costs are lower.

If there are no existing conduit or poles, commonly referred to as support structures then a fiber trench must be dug and new conduit installed. This is by and far the most expensive approach. In the downtown core trenching costs can be prohibitive because of the obvious disruption of traffic and the complex existing ductwork that already lies beneath most of our downtown streets.

A new approach which is coming onto the market is installing fiber in sewer lines. This technology appears to be 1/3 to ½ the cost of new trenching.

There are a number of different approaches if you are forced to deploy new fiber where there are no existing support structure such as poles and conduits:

(a) Traditional trenching and conduit deployment with a backhoe;(b) Direct bury with a “fiber plough” where no conduit is deployed;(c) “In the groove” technology where a very narrow grove is cut into the existing roadbed;(d) “Sewer” systems where robotic systems install fiber in storm or sanitary sewers using either

specialized cable or stainless steel tubing; (e) “Gas” pipeline systems where the fiber is installed in active gas pipelines; and(f) “Directional boring” where for short distances a tunnel can be bored laterally underneath the

ground.

In any event trenching of any kind should be avoided as much as possible. As you will see in later sections fiber on poles in most situations results in the most reliable installation, even over buried fiber.

If you are planning to build a condominium fiber network then you may have to add an additional $1 - $3/meter for engineering, design, supervision and installation. In addition condominium cables are priced on a section by section basis, with the price varying depending on how many users are in a section and the specific costs of each section.

The cost of fiber cable itself varies depending on the number of strands in the fiber cable and whether it is a standard single mode fiber or a specialized low attenuation type of fiber.

The following costs are typical costs of SMF-28 fiber cable in US dollars:

(a) $.15 per strand per meter for 36 strands or less(b) $.12 per strand per meter for 96 strands or less(c) $.10 per strand per meter for 192 strands or less(d) $.05 per strand per meter for more than 192 strands

The standard minimum cable size is 12 strands. So the lowest cost for a lateral cable is $1.80 per meter for the cable plus $3 - $6 per meter for the installation. As a rule of thumb then laterals are priced at $5 per meter aerial, $10 per meter in existing conduit and $35 per meter if new trenching is required.

On large cable fiber trunks a budgetary number of $.50 per meter per strand (i.e.. $1 per meter per pair) is reasonable. The cost of installation is negligible on a per strand basis.

17. What are the ongoing yearly costs for customer owned dark fiber?

As a rule of thumb the annual maintenance and right of way charges for dark fiber amount to 5% of the capital cost.

In some cases fiber installation companies waive all annual maintenance costs for schools and hospitals if other strands of fiber in the cable bundle are used to carry commercial services.

There are two components to the annual charges:

(a) Right of way charges; and(b) Annual maintenance charges.

Both charges are assessed against the fiber cable and not the individual strands. So once again the per strand cost of these charges can be very small for large strand cables.

Government regulators such as the FCC in the United States and the CRTC in Canada have established set prices for the costs of right of ways on public land, or for regulated telecommunication facilities. In the United States the situation can become more complex because Public Utility Commissions may have a different set of rules then the FCC.

The regulated telecommunication facilities are called support structures and are devices that are currently used to carry regulated telecommunication services. So generally existing telephone poles, utility poles and telephone company conduit is covered under these regulations. However utility poles that do not carry any existing telecommunication facilities, railroad bridges and road bridges are generally not covered by these regulations. The owners of these facilities do not have to provide access to other carriers to their facilities, and if they do, they can charge any price the market will bear.

As a rule of thumb the following are the typical right of way costs:

(a) $1 per pole per month(b) $.50 per strand of support wire between poles per month(c) $1 per meter of existing conduit

Right of way costs therefore work out to be typically $.50 per meter per year on poles and $1 per meter per year in an existing conduit. Many cities are also assessing right of way charges in the downtown core to reflect increased costs to the city for traffic disruption etc. These costs typically average $20 per meter per year.

It is important to note these costs are assessed against the fiber cable. The more fibers in the cable, the less cost per strand.

Maintenance charges vary between $150 to $250 per kilometre (or mile) per year.

18. How reliable is dark fiber?

Customer owned dark fiber can be more reliable than traditional telecommunication services particularly if the customer deploys a diverse or redundant dark fiber route.

Dark fiber is a very simple technology. It is often referred to as being technologically neutral. Sections of dark fiber can be fused together so that one continuous strand exists between the customer and the ultimate destination. As such the big advantage of customer owned dark fiber is that no active devices are required in the fiber path. Since there are no active devices customer owned dark fiber in many cases can be more reliable than a traditional managed service. Traditional managed services usually have a myriad of devices in the network path such as SONET multiplexers, Add/Drop multiplexers, ATM switches, routers, etc etc. Each one of these devices is susceptible to failure and that is why traditional carriers have to deploy complex networks and systems to insure reliability and redundancy.

Many customers assume that because the carriers deploy SONET rings that they have a reliable network. In fact SONET rings are generally only deployed between carrier central office. Most customers today, except in exceptional circumstances only have one unprotected link to their nearest central office and this is their single weakest link in their network.

For the greatest reliability many customers will install 2 separate dark fiber links to 2 separate service providers. Even with the additional fiber for redundancy, customer owned dark fiber networks are cheaper than managed services from a carrier.

With dark fiber customers have a number of choices in terms of reliability and redundancy:

(a) They can have single unprotected fiber link and have the same reliability as it exists today with their current carrier;

(b) They can use alternative technology, such as a wireless link for backup in case of a fiber break; or

(c) They can install a second geographically diverse dark fiber link whose total cost is still cheaper than a managed service from a carrier.

Because fiber has a greater tensile strength than copper or even steel, it is less susceptible breaks from wind or snow loads.

19. Does dark fiber increase my network management costs and complexity?

Network cost and complexity is significantly reduced with customer owned dark fiber in a number of ways:

(c) Dark fiber has no active devices in the path as in a typical carrier network, therefore are fewer devices to mange and less thing that are likely to go wrong;

(d) Repair and maintenance of the fiber is usually contracted out to 3rd party fiber maintenance companies. These companies are in many cases the same companies that carriers use to maintain their fiber;

(e) Dark fiber allows organization to centralize servers and/or out source many different functions such as web hosting, server management, etc

Many school boards, for example, who have deployed dark fiber have been able to dramatically reduce the number of servers required at each school and the associated management and travel costs. Dark fiber allows large enterprise customers, universities and schools to essentially extend their in house LANs across the wide area. Because there is no effective cost to bandwidth with dark fiber the long distance LAN can be still run at native speeds with no performance degradation to the end user. It is therefore very simple to relocate a server to a distant location where previously it required close proximity because of LAN performance issues.

20. Won’t dark fiber become obsolete like other telecommunication technologies?

Fiber is technology neutral. It is a transparent medium similar to the “air” through which radio signals travel. Similar to wireless networks it is the equipment at the ends that will change but the “transmission medium” remains largely unchanged over time. The equipment at the end of the fiber, as in wireless systems will have to be upgraded from time to time. But the cost of the equipment at the end of the fiber is trivial compared to the cost of the fiber itself.

Fiber that was installed 20 years ago is still good today as when it was installed.

The big change that is occurring with fiber is the cost of installation as calculated on a per strand basis. The single biggest expense of dark fiber networks is the installation of the fiber cable itself. A few years ago most fiber cable systems were only 12 or 48 strand cables. Today many cable systems that are being installed may incorporate up to 864 strands of fiber.

Since the cost of installation is almost the same regardless of whether it is a 12 or 864 strand system, the economies of scale are significantly driving down the per strand cost.

However, to be on the safe side, a general rule of thumb is dark fiber should pay for itself in 5 years or less compared to the purchase of a managed service. If you cannot obtain a 5 year payback then dark fiber may not be the right solution for your organization.

21. Does this mean that governments are becoming telecommunication service providers?

No. But governments are starting to recognize that customer owned dark fiber is a powerful economic enabler of new commercial services and will be as fundamental to the economic and social well being of the community as publicly owned roads and bridges have been in the past.

In recognition of that fact some municipal, state and provincial governments are offering their telecommunication business and offering access to municipal ducts and sewers as an incentive for the construction of open access conduit and customer owned dark fiber networks by the private sector. The Peel County fiber build http://www.canarie.ca/advnet/workshop_2000/presentations/wiseman.pptand the City of Chicago fiber build http://www.cityofchicago.org/CivicNet/civicnetRFI.pdf are examples of this approach.

A number of new next generation fiber companies are now willing to work with municipalities to deploy open access dark networks under terms set by the municipality. These companies do not offer any services. All they do is install and manage dark fiber networks.

22. What role do regulators and government play with respect to condominium fiber?

Regulators and governments at all levels, but particularly municipal governments play a critical role in the deployment of customer owned dark fiber. An excellent document on this subject is http://www4.nationalacademies.org/cpsma/cstb.nsf/web/pub_broadband?OpenDocument

It is a generally accepted belief that facilities based competition is the best way of introducing competition and producing a level playing field. Currently most governments and regulators are concerned about access to existing facilities (e.g. unbundled copper, cable modem access) in terms of producing a competitive level playing field.

In addition municipalities increasingly do not want to see their roads torn up by competitive carriers who are private deploying fiber optic systems. If the public roads are being torn up so that a small number of telecommunications can make profits, municipalities feel that they should be properly compensated, not only for the cost of the repair of the roadway, but also its intrinsic value. However, if the fiber is owned by a much wider representation of the community including businesses, schools, libraries, hospitals, etc then there is a much greater incentive by the municipality to promote its deployment at the lowest possible cost.

One of the great urban myths is that satellite and wireless technologies are equal competitors to fiber. These technologies are complementary but not competitive to fiber. There are many exciting new applications for mobile wireless and short range wireless in the last hundred meters. But it is important to note that one single strand of fiber has more bandwidth capability than all of the satellite and wireless systems combined in Canada.

Once fiber is installed into a neighbourhood or home, there is no business case left for any kind of long haul wireless solution. And therefore given the huge capital costs, the company that first installs fiber to the home will almost certainly have a significant advantage over all other competitors. The “last 100 meter wireless systems” also need fiber deep into neighbourhoods to be any where near competitive with wireline solutions. But there is unlikely to be a business case for 2 or more companies to install separate fiber systems to the home or the neighbourhood. And even if there were a business case for 2 or more fiber providers, municipalities are not going to idly standby and watch their telephone poles be turned into spaghetti trees or their streets turned into war trenches.

The other important thing to understand what cable companies and telephone companies mean when they claim they have 75-95% broadband coverage with their DSL or cable modem services. This is like putting up on mobile telephone tower in a large city and claming that the city is 100% covered for cellular telephone

service. Yes that is true for the first 100 subscribers, but as more customers subscribe to the service additional cellular towers have to be constructed. The same is true for DSL and cable modem services. As more subscribed are added the telephone and cable companies have to build out fiber deeper into the neighbourhood. The same is true for wireless companies.

Cable systems on average have fiber serving every 2000-5000 homes. But they know that as the take up increases for cable modems they have to build fiber deeper and deeper into neighbourhood with an ultimate goal of fiber to every 500 homes.

If you look at the business plans for DSL providers, cable companies, and wireless companies you quickly realize they all have the same objective in the next 5 years - to deploy fiber deep into the neighbourhood to approximately every 250-500 homes. If you also look at school boards and municipalities you quickly realize that they also have pressing needs to get broadband to all schools and libraries. Coincidentally schools on average server approximately 200-500 homes.

A similar process occurred with cellular towers - many cellular companies were building towers in close proximity at key locations. Governments got fed up and insisted that cellular companies use one common tower. And now there are companies that specialize in the installation and management of cellular towers that can be used by competitive service providers.

Some municipalities and governments are realizing that the same model should be applied to municipal fiber. Because schools and hospitals already have a pressing need for broadband services forward looking governments can take a bold leap forward and significantly accelerate the next generation of broadband services by contracting with the private sector condominium fiber to every school. Fiber strands can the be purchased by a number of competing service providers to offer services in that neighbourhood. This will dramatically reduce the capital expenditures of all service providers and allow wireless as well as next generation cable and DSL services to be rapidly deployed in the neighbourhood.

Governments at all levels, but particularly municipal governments can play a critical role to insure the rapid role out of customer owned dark fiber and equitable access to all citizens. Management of municipal right of ways is a key part for the rapid deployment of customer owned dark fiber.

With a competitive market it is not practical for a multitude of carriers to build physical networks. Besides only those carriers with huge capital budgets can afford such undertakings. Because condominium dark fiber networks allow access to may competitive services providers it level the playing field and increases competition.

This does not mean that governments should own or build fiber networks. But governments can help facilitate the rapid deployment of facilities based competition through condominium fiber and other techniques. There are a number of approaches of achieving this goal:

(a) Use municipal GIS systems to identify condominium fiber facilities. This allows businesses and other organizations to identify what parts of the city are serviced by condominium fiber;

(b) Build open access conduit through out city; and(c) Contract with private sector to build condominium fiber networks throughout the city, for which in

turn the city directs its telecommunication business and provides access to city owned ducts.

23. Who manages and repairs the dark fiber in case of breaks or other problems?

In most cases management of the fiber is contracted out to a 3rd party who specialize in the repair and maintenance of fiber networks. In many cases these are the same companies who maintain and repair for the major carriers. They offer the same terms and conditions to dark fiber customers as they do for the major carriers.

In many cases the companies that installed the fiber are also the ones who maintain the fiber. These companies will also look after any on-going moves, adds and changes as well as relocating the fiber in case of road construction and so forth.

24. Isn’t the big trend toward outsourcing all telecommunication and data services?

Customer owned dark fiber makes it significantly easier to out source all telecommunications and data services. In fact several systems integrator companies now specialize in arranging dark fiber for customers so that they can acquire their out souring business. With dark fiber there is no artificial bandwidth constraints so even those servers that required close proximity to the user to maintain LAN network performance can now be relocated to an out sourcing company.

However if a customer out sources all of their telecommunications and data services, it is important that maintain ownership and title to the dark fiber. The out sourcing company or service provider can manage the fiber on their behalf. But when the contract expires with the out sourcing the customer the user can easily connect to an alternate out sourcing company with a minimum of disruption. If a carrier, or out sourcing company owns the fiber, then customers will have a much more limited choice of out source companies and it may take several months to arrange to connect to a new out source company given the restrictions by many municipalities on new fiber builds.

25. How do I find out where to buy dark fiber in my area?

As the dark fiber industry is still a very immature industry can it be very difficult to find companies who are willing to install, sell or lease customer owned dark fiber. Unfortunately most fiber installation companies still think that the major carriers are the only who would be interested in their services. A lot of market education still has to occur to make these companies understand that there is significantly larger market opportunity with customer owned fiber than the traditional carrier market.

Finding and purchasing dark is usually a process of considerable research and inquiry. One good source of information is the right of way permit office in your municipality. They should have a list of all companies who applied for Municipal Access Agreements (MAAs) to deploy fiber in your area. They will also maintain a list of companies planning to deploy fiber in your area. They are the ones you should contact immediately, as the time to get the best price for fiber strands is before constructions begins. In addition most municipalities insist that the fiber supplier donate a number of strands to the municipality as part of the right of way fee. Public sector institutions like schools and hospitals may be able to avail themselves of this fiber.

The state PUC (Public Utility Commission) in the United States and national regulators such as the CRTC in Canada and the FCC in the United States can also be good sources for information on service providers.

Another way to find out about dark fiber is to look for fiber markers on poles in the ground. Usually the markers have telephone numbers for the maintenance company. From there you can out if they are selling dark fiber.

It is useful to find a new carrier that is about to enter your marketplace. As they have no existing infrastructure they are usually the ones most receptive to creative business deals in terms of condominium fiber. Just like condominium apartment buildings, condominium fiber can be usually purchased a lot cheaper before construction than afterwards.

A new resource that has just become available is company called Fiberloop. www.fiberloops.com. The site allows and end user to search geographically for fiber and colo space. Currently the site features over 500 colo centers and metro fiber in 25 markets.

26. How do I go about starting a condominium fiber network?

To build a condominium network you either have to form a consortium or find a contractor who will build a condominium network on spec. The later situation was unheard of a year ago, but is becoming increasingly common in some jurisdictions. In fact there are now companies will build condominium fiber networks on spec including extra fibers for future growth. These companies will also make arrangements to make payments to the original condominium owners as any additional overbuild fibers are sold to other users outside or inside the consortium. Members inside the consortium usually have preferential pricing for any spare fibers.

If you decide to form a consortium it is critical that you have an anchor tenant for the fiber build. An anchor tenant is a lead organization that has the financial resources and mandate to build the fiber network for its own exclusive purposes. Other members of the consortium may participate in the condominium fiber build which will reduce the cost for all. But the anchor tenant sets the agenda, the network topology and the speed of negotiations.

A good anchor tenant is a school board. School boards generally have wide geographic reach and their network topology for the fiber trunk can be used by other institutions. These other institutions would have their own dedicated strands in the fiber trunk and their own lateral. In some cases a lateral can be shared.

Once you have formed a consortium it is sometimes useful to retain the service of an independent engineering firm to complete a preliminary engineering survey. A preliminary survey will cost in the order of $10,000- $20,000. The preliminary engineering survey should give you a project estimate with 15% of the final cost. This will give you a good reference point to evaluate proposals from fiber suppliers.

At that point your consortium may want to issue a Request for Proposal (RFP) to invite potential fiber suppliers to bid on the project. Potential bidders could be companies with existing fiber or new entrants in the market. Again it is better that the anchor tenant issue the RFP rather than the consortium itself.

It is important that all respondents to the RFP have the appropriate licenses so that they can enter into Municipal Access Agreements (MAAs) with the city and Support Structure Agreements (SSAs) with the owners of the utility poles and conduit. There are a number of fiber sub-contractors who install fiber but are not involved in negotiating MAAs or SSAs. These companies are normally not eligible to respond to a condominium fiber RFP.

Electric utility, telephone and cable companies are generally obligated by law to allow any registered carrier to attach to their support structures provided they have entered into a SSA. The telephone or cable company cannot unreasonably uphold applications for SSAs and regulators have set specific guidelines on the when and how an incumbent carrier must respond to a request for a SSA. The fiber contractor will also have to have liability insurance and may be required to post performance bonds with the owners of the support structures.

When evaluating the responses the key thing to look for in addition to the bottom line is a contractor who will provide the following services:

(a) Undertake to do an overbuild and make the additional strands available in the trunk for some agreed upon amount of time at an agreed upon price;

(b) Undertake to provide individualized prices for installation and maintenance for each member of the organization in accordance with each member’s network architecture and fiber count; and

(c) Enter into one on one contracts with each member of the consortium.

The RFP is in fact and umbrella document which sets out the general terms and conditions for all the members, but each member will enter into a one on one contract with the fiber contractor.

Upon award of the umbrella agreement with the fiber contractor, the fiber contractor will then carry out a detailed engineering study. In the detailed engineering study the fiber contractor has to prepare detailed engineering diagrams for every support structure, negotiate SSAs and MAAs, and negotiate with the Support Structure Owner any required upgrades or replacement of the support structures.

The detailed engineering may take 2 to 4 months depending on the size of the condominium network.

At the same time the detailed engineering is underway, the fiber contractor will order the fiber. Currently there is a severe world wide shortage of fiber and it may take several months to have the fiber delivered.

Upon acceptance of the fiber, the customer is provided with the data from an end to end Optical Time Domain Reflectometer (OTDR) test. This test will document the fiber and splice losses as well as the average attenuation of the customer’s individual strands of fiber.

The fiber is terminated in a patch panel on the customer’s premises. The customer can then connect to the finer with standard fiber connectors.

An example of a condominium fiber contract can be found at http://www.canet3.net/library/papers/OttawaDarkFiberRFI.html

27. Can customer owned dark fiber be used for long haul?

Customer owned fiber can be purchased for any distance across the state or province or across the country. But after 40 or 60 km access to repeater huts are essential. The customer can then locate repeater equipment in each hut to re-amplify the signal for the next 40 to 60 km hop.

If you are using Gigabit Ethernet as your transport protocol there are a number of companies that provide Gigabit Ethernet repeaters. These repeaters can be remotely managed by anyone who maintains a LAN network. The capital equipment cost for repeaters and related equipment is about $US 200 - $US 500 per kilometre.

Many companies that provide long hail dark fiber systems will also install and maintain repeater huts and equipment on behalf of the customer.

For additional capacity Coarse Wave Division Multiplexing (CWDM) systems can be deployed on the fiber network by the customer. The current systems are usually 4 wavelength systems, but 8 and 16 wavelength systems will be available shortly. The next generation of these systems will also support the new 10Gigabit

Ethernet standard which will give the customer owned fiber bandwidth capacity up to 160 Gbps – something unheard of even from the telcos a few short years ago.

The average price for a 4 channel CWDM system is in the range of $US 500 - $US 1000 per kilometre.

28. Is there any business case analysis on the benefits of dark fiber?

Yes. CANARIE and Industry Canada have contracted with an independent consultant to document the business case for a dark fiber network for a school board. This document details the significant cost savings and does a business case comparison of customer owned dark fiber versus other telecommunication technologies. You can see the business case at http://www.canarie.ca/advnet/workshop_2000/presentations/waldron.pdf

A comprehensive analysis of over 6 school boards was also recently complete by Groupe Secor. A copy of this report can be found at www.canet3.net/library/papers.html “Canadian School Board Investments in Private Fiber Optic Networks - Group Secor Study, March 2001”

29. What about moves, adds, changes and fiber relocation services?

Moves, adds, changes are generally quite trivial and be carried out by the fiber maintenance company on a routine basis. Most moves, adds and changes only require breaking and fusing together existing fiber pairs. The work can be done on an hourly rate, or priced on a per move, add change basis. The cost, terms and conditions for moves, add, changes are usually included in your fiber maintenance agreement.

On very rare occasions fiber has to be relocated because of road construction or repair. Usually the city that had undertaken the road work will pay for the majority of the fiber relocation costs. However, if this not case, minor relocations of several hundred meters are usually included as part of the maintenance contract.

If a major relocation is required most contracts give the customer the option paying their share of the relocation expenses in portion to the number of fibers they own in the cable or cancelling the fiber ownership contract.

Although uncompensated fiber relocations are very rare, it is a factor they should be taken into account when purchasing dark fiber.

30. Is customer owned fiber the same fiber used by the carriers?

Yes. In most cases for metropolitan and long haul fiber the most common of fiber by carriers is Single Mode Fiber (SMF-28). This is usually adequate for most fiber installations. For particular long spans or long distances speciality Non-Zero Dispersion Shifted Fibers (NZDSF) are used. But given the cost difference single mode fiber is generally the fiber of choice for most customer owned fiber installations.

All splices are performed with an industry-accepted fusion splicing machine and the customer is provided with testing documentation reflecting bi-directional losses by fiber and installed span loss by fiber.

31. What is an IRU?

An IRU is an Indefeasible Right to Use of the fiber. Most companies who offer customer owned dark fiber sell IRUs to the fiber. For regulatory reasons generally only licensed carriers are allowed access to support structures and municipal right of ways. Rather than selling title to the fiber the fiber contractors grant a 20 year IRU. In some cases IRUs of shorter or longer term available. But as opposed to a lease an IRU can be used as collateral, can sold or traded and otherwise treated like a physically owned asset.

Increasingly some fiber operators also lease the fiber for shorter time periods from 3 to 10 years.

32. What is “jet fiber” or “micro conduit”?

Jet fiber is a new technology that uses small plastic tubes called micro conduit instead of fiber. The actual fiber is not installed until requested by a customer. Instead the condominium fiber company installs the micro conduit to all required locations. When a customer wants to purchase dark fiber, the fiber is blown through the micro conduit using high pressure air. Each micro conduit can hold a small number of strands. The

micro conduit provides all the necessary protection for the fiber and so only raw fiber without a sheath can be blown into the micro conduit.

The advantage of jet fiber or micro conduit is that it significantly minimizes the number of fiber splices in the fiber run. It also reduces the possibility of cross connecting the wrong fibers at splice points along the cable run. Fiber can also be replaced if the customer wants to upgrade or change the quality of the fiber.

Micro conduit tubes are blown into existing duct network or directly buried thereby creating a new network of small bore tubes, interconnected either direct from a carrier neutral facility to the customer or from the local Optical Distribution Point to the customer. A micro conduit that can hold 2, 4, 8 or 12 fibres, encapsulated in an acrylic coating is then installed with the aid of Compressed Air through a small installation unit known as the “Blowing Head”. These fibre units can be installed up to 2 Kilometres in a single blow dependant on route topography.

The system allows for the better use of resources permitting the network owner to pass as many potential subscribers as possible, installing the basis of a network but not laying out the fibre on day one. The fibre is only introduced on demand – when the potential subscriber is signed. There is no need to break into the existing fibres as the fiber runs are truly point to point. There is no disturbance to existing circuits or fibres and the equipment is small, readily portable and easy to use. Because the fibre is placed on demand the cost is deferred until the demand is real. Cost savings up to 40% are possible with micro conduit versus traditional fiber cables.

Also due to the possibility of point to point fibre the most common cause of fibre redundancy with traditional fibre cable is eliminated. But most importantly with the introduction of point to point fibre the need for splices is almost eliminated.

33. What is the typical span loss for optical fiber?

As a rule of thumb for design purposed .5 db per km is the typical loss budget for SMF-28 fiber. The end-to-end loss value as measured with an industry-accepted laser source and power meter generally will an attenuation rating of less than or equal to the following: @1310nm: (0.40dB/km x km of cable) + (number of connectors x 0.50db per connector) + (0.10 x number of splices); @ 1550nm: (0.30dB/km x km of cable) + (number of connectors x 0.50) + (0.10 x number of splices).

Equipment vendors will provide you with a power budget in order to calculate the distances that you can drive the fiber.

34. What happens in case of fiber break?

Fiber breaks are very rare and typically any given span of 10 km of fiber will suffer an average of less than 5 minutes of outage due to breaks in a year.

If there is a fiber break, the maintenance company will specify an average repair interval. The repair interval for aerial fiber is usually much shorter than buried fiber. A normal fiber break outage for aerial is 4 hours and 6 hours or longer for buried fiber. However these are average repair intervals. With buried fiber, in particular, where there may be water and mud the repair time can be considerably longer.

The fiber maintenance company will splice fibers tube by tube or ribbon by ribbon or fiber bundle by fiber bundle, rotating between tubes or ribbons operated by the separate users of the Cable, including the customer, in accordance with a priority and rotation provided for in the maintenance contract. In general, priority among users of the fiber cable affected by a cut shall be determined on a rotating restoration-by-restoration and segment-by-segment basis, to provide fair and equitable restoration priority to all users of the cable, subject only to such restoration priority to which is contractually obligated by the maintenance company.

35. Won’t the new wireless technologies eliminate the need for fiber?

Wireless technologies will undoubtedly play a significant role in the last mile. But the bandwidth of wireless technologies over longer distances is extremely limited compared with fiber. For example the intrinsic capacity of a single fiber strand is greater than all the bandwidth combined on existing satellite or wireless systems.

Once fiber is installed into a neighbourhood or home, wireless or satellite systems cannot compete in terms of bandwidth. On a twenty year amortization the cost of fiber can also be significantly less than most wireless systems.

Last mile wireless systems are a prefect match for municipal condominium fiber systems that extend to schools and other public systems. Municipalities that contract for condominium fiber to all public sector buildings can rapidly enable the delivery of extreme high speed wireless services.

The typical school in North America serves on average between 250 – 500 homes. This is the ideal service delivery area for low power, high bandwidth wireless systems. It is also the ideal geographic size for other last mile technologies proposed by the telephone and cable companies.

There are a number of small innovative companies that are developing LAN based wireless RF and optical solutions. These technologies can deliver up to 50 Mbps per home using very simple low cost components. But in most cases their operating range is only a few hundred meters. Fiber to the neighbourhood is essential for these technologies to be successful.

36. Don’t governments have a poor track record in picking technology winners?

There is no question that governments in general have not had a good track record in picking technology winners.

But they do know today that schools, libraries, hospitals and other public sector buildings are in desperate need of bandwidth. Most schools need a minimum of 10 Mbps Internet bandwidth, many need 100 Mbps and a few even require Gigabit Ethernet capacity. This demand for increased bandwidth is only going to increase over time.

The only way to deliver this bandwidth with scalable capacity for future growth is through optical fiber.

Generally the minimum fiber cable size is 6 strands to an individual school. The cost to double the number of strands to a school will typically only increase the overall network cost by 10%. Therefore the incremental cost to build a condominium network with 10 strands available to competitive service providers is very, very small. The attendant risk for governments and municipalities to contract for open access condominium fiber is negligible. And remember that typical payback for a school to install fiber is typically 12-18 months. So even in the extremely unlikely event that some revolutionary new technology did appear in the marketplace that obviated the need for fiber into the neighbourhood or the school, the risk to governments is extremely small. By the time that revolutionary technology became commercially available, school boards and governments would have already recovered their investment in the municipal condominium fiber project.

37. What are some of the disadvantages of dark fiber?

Customer owned dark fiber is not suitable for every organization. Fiber is not portable. If you lease or rent office space then there is a high probability that your organization will move within the next few years. Customer owned fiber makes the most sense if the organization is a fixed institution like a school, hospital, library or large business.

Fiber networks also take a long time to build. If a condominium fiber network does not already exist in your neighbourhood it can take up to 2 years to have one designed and deployed. The process to deploy fiber is very tedious and time consuming. Detailed engineering studies have to be completed, municipal access agreements negotiated, support structure agreements negotiated and so on before the actual installation of the fiber begins.

Finally customer owned fiber generally does not make sense if your data requirements are less than 1 Mbps and you have no expectation of any significant growth over the coming years.

38. What are some of the future trends with dark fiber?

Here at CANARIE we are working on a number of developments that are natural extension to customer owned fiber under a theme we call “Customer Empowered Networking”.

Customer owned dark fiber is the first step in this vision. In addition to customer owned dark fiber we are working on a program that will allow customer to control and route their own wavelengths on a dark fiber network.

We see customer owned wavelengths as a natural extension to customer owned fiber. With a new proposed concepts in Object Oriented Network (OON) customers can not only own wavelengths they can also route them and control them over a carrier’s cloud optical domain. The customer actually owns and controls ports on a carrier’s optical switch – so the customer can route the wavelength independent of the carrier.

Other areas of research include using wavelengths for guaranteed end-to-end bandwidth. One of the biggest challenges for research networking is to provide guaranteed bandwidth from a specific researcher's desktop to a network backbone. We generally don't need QoS in the backbone because as it is easier to over provision. One approach to solving campus QoS is through the Internet2 end2end program. Anotherapproach is to use campus CWDM.

Campus CWDM in many ways is similar to campus ATM networks - but without the inherent complexity and multiplexing of ATM. With CWDM there are only 2 classes of service - a dedicated CWDM channel to the backbone network, or the normal best efforts LAN.

Most campus networks have all traffic routed through a border router. This allows the campus administrator maintain a consistent routing policy. Now the biggest challenge with providing a dedicated CWDM path to a backbone network is maintaining routing policy at the border router. How do you do that and yet maintain a dedicated path? This is one of the reasons why we developed OBGP - to allow the network administrator to maintain routing policy yet allow the researcher to have a direct optical connection through the border router to the backbone network.

Once researchers or institutions acquire dark fiber or campus CWDM, they love the freedom and flexibility that these technologies offer. The next logical step is to extend this type of "ownership" of the network outside of the local metro area. We are proposing to do this in CA*net 4 by assigning ownership of cross country wavelengths and switch ports to end users. We believe the WAN network of the future will enable the direct peering and interconnection of hundreds of campus LAN networks through a mesh of customer owned and controlled wavelengths and/or STS channels. Wavelengths will radiate out from the campus LAN in massive multi-homing or peering configurations rather than being hidden within a carrier cloud.

We are working with STS/wavelength switch vendors that will allow us to assign control and ownership of switch ports to end users. These switch ports then become part of the user's management domain and in fact can be part of the user's OSPF or ISIS cloud.

These concepts are being developed under a larger program called Object Oriented Networking. Once users are given ownership and control of STS channels or wavelengths then these wavelengths can be directlymanipulated by software programs. In fact they can be treated as "software objects" with inheritance, classes, polymorphism, etc. Rather than a researcher invoking the setup of a wavelength as in the above example thiscan be done automatically as part of a grid middleware application for large FTP file transfers.

Another area of research is to extend the concept of customer owned wavelength and fiber to FTTH applications. Although a number of FTTH technologies have been proposed such as APON, EPON, etc they all require some entity to manage a common control and distribution layer and therefore act as a choke point in terms of delivery competitive services. One of the challenges for FTTH networks is to maintain facilities based competition all the way to individual homes. However it is highly unlikely that different carriers will independently build fiber networks to each home.

What we have proposed is that the homeowner instead be given ownership or control of a dedicated point to point strand to a neighbourhood or community based carrier neutral collocation facility. The home owner can then connect to the service provider of their choice at that facility. However, one of the problems with this model is that to switch service providers someone has to physically change fibers in a patch panel or a common control switch plane is again required to allow the automatic switching from one service provider to another.

What we have proposed instead is to use Reverse PON (RPON) technology where the passive optical splitter is located in the neighbourhood carrier neutral facility. The homeowner's point to point fiber is then passively split simultaneously amongst the various service providers at the carrier neutral facility. The customer can then subscribe to one or more service providers at any time without requiring the switching of their fiber. For the return signal to the home owner the service providers use separate designated time slots or individual wavelengths.

Other aspects of RPON are developing the new upper layer protocols to allow direct peering of wavelengths and fiber between homeowners which can signaled directly by their favorite P2P application e.g. Morpheus, Freenet, Gnutella, etc. This research also include developing self organizing servers like Fasttrack and public domain DDNS - dynamic DNS and naming services to minimize or eliminate dependence on numeric addressing mechanisms such as IPv4 or IPv6. Path and routing discoveries are invoked as part of namelookups and use of agents rather than configured independently as is done today. Again this is related work to our research into OBGP, WDD and CMP -Content Message Protocol.

For more information please see the CA*net 4 Network Design Document at www.canet3.net/library/papers.html

39. Should I buy fiber or wavelengths?

Fiber is generally much more economical than fiber in metro areas. But wavelengths tend to be more economical on longer distances. For example on a cross country network a 10 year IRU for OC192 wavelengths (10 Gbps) can be purchased for an equivalent annualized cots of $US 50 per kilometre (i.e. $500 per kilometer IRU purchase price). This is substantially below the cost of the fiber itself. As well there are a number of wavelength trading exchanges where customers can purchase one year contracts for wavelengths throughout North America and across the Atlantic and the Pacific.

Here are a few examples of bandwidth trading sites:

www.band-x.comwww.telecomscapacity.com www.ratexchange.com

Most wavelength services are quoted on a DS0/mile/month price. There are 32256 DS0s in an OC48.Currently prices as low as $5 per mile per month per OC48 are being quoted on these exchanges.

Unfortunately wavelength networks with such competitive pricing are usually only available between major metro centers. As you move away from major metro centers the availability of wavelength networks becomes increasingly limited. Some carriers are starting to use metro optical networks for regional deployments, but to date there have been very limited deployments of these networks as well.

In the metro area, the cost of fiber is generally always cheaper than wavelengths, particularly if no repeaters are necessary. The biggest cost of either a wavelength service or dark fiber is the lateral and the building entrance. These costs can be substantially greater than the cost of a strand of fiber in a major trunk condominium fiber cable.

As a minimum dark fiber will always make economic sense to reach the closest carrier neutral collocation facility. At the collocation facility you will presumably have a choice of wavelength suppliers which will help drive down the costs of the service. But from the collocation facility to your premises there are unlikely to be a number of competing wavelength suppliers and therefore customer owned fiber makes the most sense.

The following are rule of thumb of costs for deploying DWDM systems.

Depending on distance the following WDM systems can be deployed:

8 Channel CWDM equipment costs - $400 per km for distances up to 500 km ($50 per km per Gigabit Ethernet wavelength);

32 channel metro DWDM equipment costs - $1000 per km for distances up to 1000 km ($30 per km per Gigabit wavelength)

40 –160 channel long haul DWDM equipment costs over 1000km- $4000 per km ($100 per km per OC48 wavelength)

To purchase wavelength IRUs the amortization of the cost of the fiber and DWDM equipment must be taken into consideration.

CWDM systems and metro DWDM systems are clearly more cost effective for distances less than 1000 km. CWDM systems are ideal for “festoon” applications where many small sites have to be connected along the fiber path and therefore optical repeaters are not required for long spans (e.g over 50-80km). Gigabit Ethernet is generally the only protocol available with CWDM systems. Add/drop is done with small Gigabit Ethernet switches or transceivers.

Metro DWDM systems converted to long haul use are generally protocol transparent. Optical amplifiers can be used with these systems significantly extending their reach. As well most metro DWDM systems use passive optical add/drop muxes.

Most long haul DWDM systems are designed for the traditional carrier/telco market and therefore are significantly more expensive than metro DWDM and CWDM systems. As well mots long haul DWDM systems use SONET or SDH framing on their wavelengths. Therefore much more expensive SONET/SDH add/drop muxes must be used at intermediate sites. But because long haul DWDM systems use SONET/SDH framing they have significantly better alarm and error reporting systems.

40. Where can I get sample documents for dark fiber RFPs, IRUs, etc?

The City of Chicago has produced a very comprehensive RFP for the deployment open access dark fiber throughout the city:

http://www.cityofchicago.org/CivicNet/civicnetRFI.pdf

Sample agreements are in the Appendix at the end of this document. Also see http://www.fhwa.dot.gov/resourcecenters/southern/gz_1.pdf

41. Where can I get additional information on customer owned dark fiber?

A number of related articles and news items can be found under CA*net 3 news archives at: www.canet3.net

For a good primer on optical networks see: http://cc.uoregon.edu/cnews/summer2000/

For general technical information on optical networking:www.light-wave.comwww.lightreading.com

For information on the Stockholm municipal fiber network:www.stokab.se

For companies that build customer owned and condominium fiber builds in Canada and the US:

New Paradigm Resources Group, Inc. has produced an excellent report listing over 50 condo fiber builders in the US. “Competitive Telecom Issues” Vol 10 No 2, February 2002http://www.nprg.com

IMS Engineering r.proulx@muni-ims.qc.ca

SAIC – Science Applications International CorporationLee BryantLeroy.j.Bryant@saic.com

Dixon Cable svsanders@dixoncable.comrvigier@dixoncable.comwww.dixoncable.com

Dark Fiber Solutions Incwww.darkfibersolutions.com

Urban Networks Incrdewhurst@dome-inc.comwww.bvd.ca

Expertech Incwww.expertech.net

VDN Cable pgale@vdn.ca

Universe2u www.universe2u.com

Hollands Consultinghollands@internet.look.ca

GT Telecom rwatson@gt.ca

QuebecTelgrouss1@quebectel.qc.ca

Dessau-SprinMichael.famery@dessausoprin.comwww.dessausoprin.com

360networkswww.360networks.com

American Fiber Sytemswww.americanfibersystems.com

Tylite Inc./Ptera Wireless Inc.509 255 1174 home office509 294 1174 celljwilson@tylite.comwww.tylite.com    

For information on Gigabit Etherent to the Home

World Wide Packets Incwww.worldwidepackets.com

Vialight Incwww.vialight.ca

CSTBhttp://www4.nationalacademies.org/cpsma/cstb.nsf/44bf87db309563a0852566f2006d63bb/e320a22d8c1191e78525692600776ccb?OpenDocument

For information on carrier neutral collocation facilities

A good web site on carrier neutral hotelshttp://www.carrierhotels.com/

http://www.ovum.com/scripts/campaign.asp?cam=hou&red=sample/hou.htm&spc=tel&id=2264

Fiberloops colo dark fiber and brokering servicewww.fiberloops.com

For information on optical fiber cabling, condominium networks and supplies see:

www.cablingsystems.com

http://www.angelfire.com/bc2/bbindon/condonetpage.html

For companies that make Gigabit Ethernet transceivers and CWDM systems for dark fiber networks:

Fiber Networks Engineeringwww.fn-eng.com

Metrobilityhttp://www.metrobility.com

Luminenthttp://www.luminentinc.com/

Radiant Communications www.rccfiber.com

Luxn

www.luxn.com

Canoga-Perkinshttp://www.canoga-perkins.com

Tsunami Opticshttp://www.tsunamioptics.com

Nbase-Xyplexhttp://www.nbase-xyplex.com

Canary Communicationswww.canarycom.comTC Communicationswww.tccomm.com

Controlware Canadawww.controlware.ca

Fibercom Opticswww.fibercom.com.tw

ExceLightwww.excelight.com

For information on jet fiber and micro conduit:

Emtelle IncWWW.Emtelle.com

Nederlandse Kabel Fabriekenwww.nkf.nl

Twentse Kabel Fabrieken www.tkf.nl

Sumitomo Electrichttp://www.sel-rtp.com/

Erricsonwww.erricson.se

For information on fiber trenching and sewers see

Corning Micro Cablinghttp://www.corning-cable-systems.de/en/products/mcs/

Trenchless Magazinehttp://www.trenchlessonline.com/magazine.html

Examples of community and school fiber networks

1. The Spokane E-MAN is a dark fibre-based Gigabit Ethernet educational metropolitan area network or E-MAN designed to serve 13 education agencies within the Spokane area. The first to join is Spokane Public Schools, the state’s second-largest school system with 54 buildings and 32,000 students. Dennis Schweikhardt, Manager, Technology Infrastructure, Spokane Public Schools; denniss@sd81.k12.wa.us

2. The Public Sector Network (PSN) comprises 200 km of municipally owned dark fibre that services only public sector organizations and operating since 1993. Schools and Colleges are close to settling the terms of their connection into the PSN. Roy Wiseman, Director, Information Technology Services, Finance, Regional Municipality of Peel; wisemanr@region.peel.on.ca and Jim Smith, Controller, Information Technology Services, Peel District School Board; jim.smith@peelsb.com

3. Based upon a municipally owned dark fibre initially to provide the Institutional Network (I-Net), the Tacoma Public School District is just about to commission a Gigabit Ethernet wide area network, funded mainly through E-Rate. Larry Gow, Director Computer Services & Telecommunications, Tacoma Public Schools; lgow@tacoma.k12.wa.us and Brian Wilson, Communications Supervisor, Institutional Network & Franchise Oversight, General Services Department, City of Tacoma; bwilson@ci.tacoma.wa.us

4. Iowa Communications Network (ICN) is a state-managed and operated fibre optic network that connects government, education and medical facilities with high bandwidth transmission services (including full motion video). The fibre network extends over 4,800 km. Iowa is a substantially rural state. Harold Thompson, Executive Director, ICNTami Fujinaka, Public Affairs Division Manager, ICN; tami.fujinaka@icn.state.ia.us

5. The City, through its municipal utility (Austin Energy) granted rights-of-way to AISD and in lieu of payment, 12 optical fibre strands were given to the City. Subsequently 10 fibre rings eventuated, separately owned by various public bodies and all interconnected to create the Greater Austin Area Telecommunications Network, GAATN. Patrick Jordan, Assistant Director, Information Systems & Vice Chair, GAATN, City of Austin; patrick.jordan@ci.austin.tx.us andLon Berquist, Research Associate, Telecommunications and Information Policy Institute, University of Texas at Austin; berquist@uts.cc.utexas.edu

6. Stokab has created a unique municipally owned common access fibre optic network which all carriers are now to utilize within Stockholm and the surrounding region. SSNf is the Swedish Urban Network Association: a non-profit group of organizations and companies who cooperate in the development of Sweden’s IT infrastructure. Anders Comstedt, President, AB Stokab; anders.comstedt@stokab.se and Lars Hedberg, Vice-President, Head of Sales & Marketing, AB Stokab, also President of SSNf; lars.hedberg@stokab.se

Example Fiber Agreement

Fibre-Optics Sale and MaintenanceAgreement (the “Agreement”)

BETWEEN: (the “FIBERCO”)

AND:(the “Customer”)

WHEREAS FIBERCO operates a telecommunications common carrier within the meaning of the Act and falls under the jurisdiction of the Canadian Radio-Television and Telecommunications Commission (CRTC);

1.1.1.1 WHEREAS FIBERCO undertakes to construct, or have constructed, and maintain a fibre-optic link during the Service Period consisting of a cladding and optical fibres contained in the cladding on a network described in Schedule A attached hereto and forming an integral part hereof (the “Fibre-Optics Link”);

WHEREAS FIBERCO within the meaning of the Canada Business Corporations Act, remains owner of the Fibre-Optics Link and, for purposes of this Agreement, FIBERCO declares that, subject to this Agreement, it holds all the rights of FIBERCO enabling it to conclude and abide by this Agreement in accordance with its rights and obligations;

WHEREAS FIBERCO consents to purchase from FIBERCO and resell forthwith to the Customer, who accepts, a certain number of optical fibres inside the Fibre-Optics Link in accordance with this Agreement.

THE PARTIES AGREE AS FOLLOWS:

1. Sale : In consideration for the purchase price provided for in this Agreement, FIBERCO resells to the Customer and the Customer purchases from FIBERCO, upon the date of signature of this Agreement, all the rights, titles and interests of FIBERCO to x (x) fibres contained in the Fibre-Optics Link on a network of approximately x km (the “Exclusive Fibres”), which Fibre-Optics Link may contain such number of optical fibres as FIBERCO may determine from time to time at its entire discretion.

2. Service : The Service includes the maintenance and repairs of the Fibre-Optics Link in accordance with this Agreement. The monitoring of the Exclusive Fibres is not included in the Service.

3. Equipment Included : Patch panel (1 per site), single-mode fibre-optics cable.4. Rates and charges according to Service Period :1

SERVICE PERIOD: Twenty (20) years

Non-recurring charges Annual charges

4.1 Purchase price of Exclusive Fibres2

a) Inter-facilityb) Intra-facility

x$ per facility

4.2 Rights of Way3,4

(indexed annually at the market rate)5

4.3 Maintenance and repair of the Fibre-Optics Link due to normal wear and tear4

(indexed annually at the market rate)5

4.4 Repair of the Fibre-Optics Link due to an unforeseeable event outside the control of FIBERCO

Rate then in effect at the time of the repair

(based on the proportion of the Exclusive Fibres to the total number of

fibres in the Fibre-Optics Link)6

1. None of the rates or charges indicated in this Agreement includes taxes, which will be billed to the Customer as extra charges, where applicable. All amounts and charges contemplated in this Agreement are payable by the Customer to FIBERCO upon receipt of the invoice.

2. The invoices for the purchase price of the Exclusive Fibres shall be issued in the following manner: 30% of the total price upon the signature of this Agreement, 30% of the total price three (3) months after the signature and 40% of the total price following completion of the installation of the Exclusive Fibres.

3. FIBERCO reserves the right, at any time, to increase the annual charges for the Rights of Way in proportion to the increase in the charges for the preservation of the said Rights of Way.

4. The Customer may benefit from a reduction of charges based on the proportion of the length of the Fibre-Optics Link that FIBERCO may use , without any obligations from FIBERCO, to provide any telecommunications service which amount to a monthly charge of at least 10000$ (indexed annually at CPI) for the Backbone portion and to a monthly charge of at least 1000$ (indexed annually at CPI) for the Local Loop portion of the network. For example: if the Fibre-Optics Link is 100 meters long and FIBERCO uses 40 meters of fibres over the same Link to deliver a commercial service meeting the above conditions, then the Customer is entitled to receive a 40% reduction of its annual monthly charge for the next annual payment as determined in paragraphs 4.2 and 4.3.

5. The market rate is fixed at CPI.6. The Customer may benefit from a gratuity of charges if the Customer is under contract with FIBERCO during the occurrence of a break due to an

unforeseeable event for any new telecommunications service which amount to a monthly charge of at least 300$ (indexed annually at CPI). Unless the

minor or major breakage is due to the fault or negligence of the Customer, its subcontractor or other representative. In such a case, the Customer undertakes to pay all of the costs incurred for such repairs to the Fibre-Optics Link.

5. Rates and charges according to additional Fibres during the next year following the signature of the Agreement 1 :

Non-recurring charges Annual charges for new link or route

diversity5.1 Purchase price for additional

Fibres2

a) Local Loop portion b) Backbone portionc) Intra-facilityd) Splicing (per local loop)e) Splicing equipment

Existing Fibre-Optics

Link3

New link or route diversity

x$/meter/fibrex$/meter/fibre

includedx$x$

x$/meter/6 fibres

x$/meter/6 fibres

x$/new sitex$x$

5.2 Rights of Way 0,66$ per meter(indexed annually at the

market rate)4

5.3 Maintenance and repair of the Fibre-Optics Link due to normal wear and tear4

0,15$ per meter(indexed annually at the

market rate)4

1. None of the rates or charges indicated in this Agreement includes taxes, which will be billed to the Customer as extra charges, where applicable. All amounts and charges contemplated in this Agreement are payable by the Customer to FIBERCO upon receipt of the invoice.

2. The invoices for the purchase price of the Exclusive Fibres shall be issued in the following manner: 100% of the total price upon the signature of this Agreement.

3. FIBERCO does not guarantee the availability of additional fibres that FIBERCO may have built, at its entire discretion, within the Fibre-Optics Link at the time of the request.

4. The market rate is fixed at CPI.

6. Projected Date for Establishing Service : no later than six (6) months following receipt by FIBERCO at its place of business, as designated from time to time by FIBERCO, of this Agreement duly signed by the parties. Notwithstanding the foregoing and without limiting the generality of paragraph 2.1 of the Terms and Conditions in Schedule C attached hereto, forming an integral part hereof, the Projected Date for Establishing Service may be postponed if FIBERCO is unable to supply itself with optical fibres on the North American market in accordance with FIBERCO’s standards. In the latter case, the Projected Date for Establishing Service will be no later than 3 months following the receipt of the optical fibres required to establish the Service

7. Term of Agreement : this Agreement shall go into effect as of the receipt by FIBERCO at its place of business, as designated from time to time by FIBERCO, of this Agreement duly signed by the parties and shall terminate upon the expiry of the Service Period, which is calculated from the Date for Establishing Service.The Service Period is automatically renewable for subsequent periods of twelve (12) months on the basis of the same terms and conditions, unless one of the parties gives the other party notice of non-renewal at least ninety (90) days before the end of the initial Service Period, or one of the periods covered by a renewal.

8. Validity of this Offer 9.1 This Offer is valid on condition that this Agreement, duly signed by the parties, is received by

FIBERCO at its place of business, as designated from time to time by FIBERCO, no later than thirty (30) days following the date of signature of this Agreement by FIBERCO.

9.2 Any addition, deletion, crossing out, or other amendments to the provisions hereof, to be legally binding on the parties hereto, must be duly initialled by one or the other of these parties failing which the said provisions shall remain in effect as if they had never been amended.

9. Special Conditions 9.1 FIBERCO undertakes to obtain, on behalf and for the sole benefit of FIBERCO, prior to the Date for

Establishing Service, all authorizations, rights of way, perpetual and real servitudes or other rights (the “Rights of Way”) necessary to allow FIBERCO to construct and put into operation the Fibre-Optics Link, during and after the Service Period, in accordance with this Agreement, which Rights of Way shall be obtained at the Customer’s expense in accordance with paragraph 4.2 of this Agreement.Notwithstanding the foregoing, in the event that FIBERCO, after having exhausted all reasonable effort, is unable to obtain the Rights of Way, in whole or in part, in accordance herewith, prior to the Date for Establishing Service and/or in accordance with the estimated costs, regardless of the grounds therefor, FIBERCO may terminate this Agreement upon simple written notice to the Customer, the whole without compensation or indemnity in favour of the Customer.

9.2 Since FIBERCO Télécom ltée remains the sole owner of the Fibre-Optics Link (except for the Exclusive Fibres), FIBERCO may, on behalf of FIBERCO Télécom ltée, during the Service Period, at its entire discretion, upon simple prior written notice of thirty (30) days to the Customer, modify, alter and/or develop the Fibre-Optics Link at the expense of FIBERCO. Notwithstanding the

foregoing, if, during the Service Period, a competent authority orders FIBERCO and/or the Customer to make modifications or move, in whole or in part, the Fibre-Optics Link and its equipment, the cost of the modifications or move less any possible contribution made by a competent authority shall be borne based on the proportion of the Exclusive Fibres to the total number of fibres in the

Fibre-Optics Link The Customer accepts any interruption of Service pursuant to this paragraph, the whole without compensation or credit in favour of the Customer.

9.3 FIBERCO shall provide the maintenance for the Fibre-Optics Link and its equipment, during the Service Period, at the Customer’s expense, and in accordance with the annual charges indicated in paragraph 4.3 of this Agreement, with the care required by the maintenance standards recognized in Canada for similar telecommunications networks. FIBERCO shall maintain the Fibre-Optics Link in good operating condition so that it provides performance meeting the specifications set out in this Agreement.FIBERCO shall also effect such repairs to the Fibre-Optics Link and its equipment, during the Service Period, at the Customer’s expense, and in accordance with the aforementioned annual charges, which have become necessary, in the judgment of FIBERCO, due to the normal wear and tear of the Fibre-Optics Link and its equipment according to their age, location and use, and so that the transmission quality of the Fibre-Optics Link remains in compliance with the specifications described in this Agreement, the whole in accordance with the maintenance and repair criteria set out in Schedule B entitled “FIBERCO Maintenance and Repair Criteria,” attached to this Agreement and forming an integral part hereof.

9.4 In the event that the Fibre-Optics Link and its equipment sustains a minor or major breakage, in whole or in part, during the Service Period, caused by an unforeseeable event outside the control of FIBERCO, such as Force Majeure (Act of God), an accident, the act of a third party or any minor or major breakage not caused by the normal wear and tear of the Fibre-Optics Link and its equipment, regardless of the cause thereof, FIBERCO shall carry out all the repairs that FIBERCO judges to be useful at the Customer’s expense, in accordance with the charges indicated in paragraph 4.4 of this Agreement, the whole on the basis of the repair criteria set out in Schedule B entitled “FIBERCO Maintenance and Repair Criteria,” attached to this Agreement and forming an integral part hereof.

9.5 The Customer undertakes not to use the Exclusive Fibres in an improper or inappropriate manner, or otherwise than for the purposes provided for in this Agreement, or contrary to law or the regulations in force, or in a manner which could cause any prejudice whatsoever to FIBERCO or third parties.The Customer also undertakes, at all times, not to repair, maintain or otherwise handle, move or relocate, directly or indirectly, the Fibre-Optics Link and its equipment, whether in whole or in part.

9.6 The Customer undertakes not to assign this Agreement directly or indirectly unless it receives the written consent of FIBERCO, which may refuse at its entire discretion.The Exclusive Fibres shall, under no circumstances, be used by the Customer to offer telecommunications services to the public for a consideration unless these services are provided by a non-profit organisation for the benefice of the OCRI community

9.7 The Customer undertakes, during the Service Period, not to assign, sell, rent, give or otherwise transfer the Exclusive Fibres, whether directly or indirectly, for a consideration or free of charge, or in whole or in part, unless it receives the written consent of FIBERCO, which may refuse at its entire discretion.

9.8 The Customer undertakes not to grant security or a hypothec, in favour of a lender or any other person, over the rights of the Customer in relation to the Exclusive Fibres, or otherwise assign them as security.

9.9 The parties hereto expressly agree that FIBERCO may, for a period of five (5) years following the end of this Agreement, in accordance with its terms and conditions, and upon giving the Customer prior written notice of at least thirty (30) days, buy back the Exclusive Fibres from the Customer for a nominal value of one dollar ($1) (the “Right of Redemption”).Consequently, the Customer undertakes, during this period of five (5) years, not to do or omit to do, directly or indirectly, any thing whatsoever which could compromise FIBERCO’s Right of Redemption or cause any prejudice whatsoever to FIBERCO in this regard.

9.10 The Customer may cancel the Agreement after the Service Date but before the expiry of the Service Period upon a thirty (30) day written notice to FIBERCO. In this case, FIBERCO will exercise its Right of Redemption in accordance with this Agreement as soon as it is terminated prior to the end of the term under this paragraph and the Customer will pay any amount owing in accordance with the Contract at the time of cancellation, including all Initial Fixed Charges. Cancellation Charges of one-half of all the charges remaining at the time of cancellation, for the unexpired portion of the Service Period, shall be payable.

9.11 In the event that the Customer is in default of one or the other of its obligations under this Agreement, FIBERCO may terminate this Agreement upon the expiry of a period of sixty (60) days following receipt by the Customer of a notice of default from FIBERCO, unless the Customer remedies its default within the said period of sixty (60) days.

In addition, FIBERCO may terminate this Agreement upon giving simple written notice to the Customer in the event of the insolvency or bankruptcy of the Customer.In all cases in which this Agreement is terminated prior to the end of the term under this paragraph, the Customer shall not be entitled to any reimbursement of amounts paid nor to any indemnity of any kind, the whole subject to the rights and recourses of FIBERCO against the Customer.. In addition, FIBERCO will exercise its Right of Redemption in accordance with this Agreement as soon as it is terminated prior to the end of the term under this paragraph and the Customer will pay any amount owing in accordance with the Contract at the time of default, including all Initial Fixed Charges. Default Charges of one-half of all the charges remaining at the time of cancellation, for the unexpired portion of the Service Period, shall be payable

9.12 The Customer undertakes to take up the defence of FIBERCO and/or FIBERCO in the event of any claim, lawsuit, action or formal demand (a “Claim”), whether or not well-founded, by a third party against FIBERCO and/or FIBERCO , or any of their affiliates within the meaning of the Canada Business Corporations Act, or joining them as a third party and alleging, in particular, the infringement of any right of a third party pertaining to any element related to the Exclusive Fibres, or resulting from the operation of the Exclusive Fibres, or connected in any other manner with this Agreement, and to indemnify FIBERCO and FIBERCO , or any of their affiliates within the meaning of the Canada Business Corporations Act, for any pecuniary judgment in principal, interest, judicial and extra-judicial costs and any other damages that FIBERCO and/or FIBERCO may incur in this regard. FIBERCO reserves the right to participate in the defence of any such Claim, at its own expense, with a lawyer of its choosing.

9.13 The Customer grants FIBERCO, for a period of 1 year after the signature of the Agreement, a right of first refusal for the purchase of additional fibres that FIBERCO is prepared to offer. Also, the Customer grants FIBERCO, during the Service Period, the privilege to quote over any telecommunications service that FIBERCO is prepared to offer.To do so, the Customer shall give FIBERCO thirty (30) days prior written notice to this effect, and FIBERCO may, within the said period of thirty (30) days, match any offer for fibres or telecommunications service by a competitor for similar services with similar conditions.

9.14 Subject to the rights and obligations conferred on the Customer over the Exclusive Fibres in accordance with this Agreement, the parties expressly agree that FIBERCO or any affiliate within the meaning of the Canada Business Corporations Act, may, during and after the Service Period, operate the Fibre-Optics Link at its entire discretion and for any purposes that FIBERCO may deem useful.

9.15 FIBERCO may at any time and at its entire discretion, during the Service Period, subcontract out all or a part of the Service. FIBERCO will supply the Customer with a list of subcontractors that may have to intervene on the Customer’s premise for which the Customer reserves the right, with cause, to refuse access to its premises.

9.16 The Customer authorizes FIBERCO, during the Service Period, to use the Customer’s name to advertise and/or promote the sale and maintenance of optical fibres to a potential clientele, as FIBERCO may determine from time to time.

9.17 Schedules A, B and C are attached to this Agreement and form an integral part hereof.

Signed at _____________, Province of Quebec Signed at Montreal, Province of Quebecthis _______ day of ________________ ,1999 this _____ day of February, 2000

Customer FIBERCO

     (Signature) (Signature)

(Name and title in block letters)(Nom en lettres moulées)

(Name in block letters)

Directeur des ventes Sales Manager

Fibre-Optics Sale and Maintenance1.1.1 Agreement (the “Agreement”)

FIBERCO MAINTENANCE AND REPAIR CRITERIA

SCHEDULE B

1. Definitions:

1.1 Major failure: the cutting of a Fibre-Optics Link including the severing of one or many Exclusive Fibres.

1.2 Minor failure: any alteration of the cladding of the Fibre-Optics Link without severing one or many Exclusive Fibres.

1.3 Connection point: the optical patch panel in the Customer’s sites.1.4 Service Call: any request by an authorized representative of the Customer for the intervention of FIBERCO on the

Fibre-Optics Link.1.5 Fibre Route: the continuity of several fibres spliced end-to-end.1.6 NMC: FIBERCO Network Management Centre.

2. Service Call Procedure:The telephone numbers for contacting the Network Management Centre are:-------------------, for calls from the Montreal region, and -----------------, for calls from outside Montreal.

Before calling, the Customer must have the following information: The number of the Fibre-Optics Sale and Maintenance Agreement (the “Agreement”) A description of the problems encountered The number of the Fibre-Optic Routes and the Circuit numbers affected

Following the Service Call, FIBERCO will open a service order indicating the exact time the Service Call was received, the name of the Customer’s employee making the call, and the details of the Service Call, including the numbers of the Fibre Routes and the Circuit numbers affected. A reference number (service order) will be supplied to the Customer.

3. Response time:3.1 For a Major failure, the Mean Time To Response (MTTR) is eight (8) hours following receipt of a

Service Call from the Customer with a maximum time to repair, once on-site, of 24 hours.3.2 For a Minor failure, the Mean Time To Response is twenty-four (24) hours, excluding Saturdays,

Sundays and holidays observed locally by FIBERCO.3.3 The Customer may be refunded, upon written request to FIBERCO, for one day of FIBERCO

annual charges as detailed in paragraph 4.3 at the time of the works (the annual charges divided 365) for every hour and fraction of an hour of an interruption caused by the Exclusives Fibres exceeding the committed maximum time to repair of 24 hours. Not considered for a refund is a Major failure, in whole or in part, caused by a Force Majeure (Act of God). Any refund request must be received by FIBERCO no later than 30 days after the interruption.

3.4 The Customer will be advised of the progress of any major repair of the Fibre-Optics Link following receipt of a Service Call.

3.5 In case of an interruption of service which may involve the equipment of a third party, the Customer must be able to prove that it made the necessary verifications to confirm the source of the problem before calling FIBERCO.

4. Fibre-Optics Link Specifications:The following specifications will be maintained for the useful life of the Fibre-Optics Link (figures include the margins for ageing and maintenance).

Loss per kilometre at 1310 nm: 0.5 dBLoss per kilometre at 1550 nm: 0.4 dB

5. FIBERCO’s Procedure for Escalation:This procedure applies to a Major failure only.No later than 1 hour after receipt of the Service Call, the operator calls the Customer back to inform it of the action that will be taken to resolve the breakdown. His immediate supervisor is made aware of the problem.No later than 2 hours after receipt of the Service Call, the Customer may contact the supervisor of the Network Management Centre to obtain more details on the work being undertaken.

Supervisor Work:Network Management Centre Pager:

E-mail:

No later than 4 hours after receipt of the Service Call, if the breakdown has not been resolved, the Customer may contact the Operations Manager of the Network Management Centre to obtain more details on the repair work underway.

Operations Manager Work:Network Management Centre

Pager:

E-mail:

Fibre-Optics Sale and Maintenance1.1.1 Agreement (the “Agreement”)

FIBERCO MAINTENANCE AND REPAIR CRITERIA

SCHEDULE B

No later than 8 hours after receipt of the Service Call, if the breakdown has not been resolved, the Customer may contact the Manager, Network Operation, to obtain more details on the repair work underway.

Manager, Work:Network Operation Pager:

E-mail:

(Or any other person that FIBERCO may designate from time to time)

Fibre-Optics Sale and Maintenance1.1.2 Agreement (the “Agreement”)

FIBERCO MAINTENANCE AND REPAIR CRITERIA

SCHEDULE B

TERMS AND CONDITIONS

Section 1 - DefinitionsUnless the context provides for otherwise, the following terms and expressions shall have the following meaning.Act: The Telecommunications Act (S.C. 1993, ch. 38).Cancellation Charges: Amount payable by the Customer who cancels the Service before the expiry of the Service Period as provided for by section 7 of the present Terms and Conditions.CRTC: Canadian Radio-Television and Telecommunications Commission.Circuit : Link established by a conductor or otherwise, at FIBERCO’s choice, used for the direct transmission of signals.Connection Point: Place where the facilities and / or equipments of FIBERCO are connected to the terminal equipments or facilities of the Customer, whether or not the latter owns them , or place where the facilities and / or equipments of FIBERCO are connected to the inside wiring network serving the Customer.Contract : The present Telecommunications Service Contract.Customer: A person that buys or leases a Service from FIBERCO.Disconnection: Act by FIBERCO of discontinuing the provision of a Service to a Customer.Initial Fixed Charges: Initial charges payable by the Customer required to set-up the Service and equal to the total of the installation charges and the connection fees of the Service.Link: Continuous electrical, optical or electromagnetic circuit enabling the transport of communications by way of emission, transmission or reception of signals.Service: means a Telecommunications Service.Service Date: Date on which a FIBERCO Service may be used by the Customer, whether the latter uses it or not.Service Period: Period of time agreed to between the Customer and FIBERCO during which FIBERCO has undertaken to provide the requested Service and for which the applicable fees and charges must be paid by the Customer, whether or not the latter uses the Service during the said period.Telecommunications Service: communications transport service provided by FIBERCO at a Customer’s request for the transport of its signals through the emission, the transmission or the reception of sounds, images, signs, signals, data or messages by wire, cable, wave or any other electrical, electronic, magnetic, electromagnetic or optical mean, including the supply by sale or by lease of telecommunication facilities, equipment(s) or related service(s).FIBERCO: FIBERCO Business Network.

Section 2 - Terms of Service

2.1 Following reception by FIBERCO of the Contract duly signed by the Customer, FIBERCO will confirm in writing the Service Date. It is understood that the Service Date may, for reasonable grounds and pursuant to a prior notice, be brought forward or postponed by FIBERCO.

2.2 Unless provided otherwise, FIBERCO supplies the appropriate facilities and / or equipments in order to provide the Service up to the Connecting Point and shall remain, at all times, the sole owner of the said facilities and / or equipments.

2.3 At the end of the Service Period, the Customer must, within a reasonable delay, allow FIBERCO to remove and repossess the facilities and / or equipments required to provide the Service.

2.4 It is the Customer's responsability to provide FIBERCO, at no cost, with the conduits (internal and external) and the inside wiring network on private property, rights of way on private property, adequate space and sufficient electrical power for the installation, connection and maintenance of the facilities and / or equipments required for the set up and the maintenance of the Service.

2.5 FIBERCO reserves the right, from time to time, and at times agreed to with the Customer, to proceed, at its own expense, to tests, verifications and / or adjustments with respect to the facilities in order to maintain its continuous and proper functioning. No credit will be issued to the Customer for any Service interruption caused by this preventive maintenance.

Fibre-Optics Sale and Maintenance1.1.2 Agreement (the “Agreement”)

FIBERCO MAINTENANCE AND REPAIR CRITERIA

SCHEDULE B

2.6 FIBERCO’s facilities and / or equipments must not be tampered with except in case of emergency. In such an event, FIBERCO must be informed as soon as possible.

2.7 All terminal equipment provided by the Customer, whether it owns it or not, may be connected with FIBERCO’s equipments in accordance with this Contract.

Section 3 - Access by FIBERCO to the Customer’s Premises

3.1 FIBERCO’s representatives may, after usual business hours if so required, enter the premises on which the Service is or is to be provided to install, inspect, repair or remove its facilities and / or equipments, to perform any work related to the said facilities and / or equipments, or to perform maintenance and emergency work.

3.2 Prior to entering premises, FIBERCO must obtain permission from the Customer.

3.3 Upon request, FIBERCO’s representative must show a valid FIBERCO identification document prior to entering the premises.

3.4

Section 4 - Payments

4.1 The Customer is billed on a monthly basis by FIBERCO for the Services it provides.

4.2 The monthly rate of FIBERCO’s Service is payable in advance from the Customer and is payable the first day of the month preceding the provision of the Service. Any unpaid balance on a bill shall bear a compounded interest at the rate of one point five percent (1,5 %) per month, [nineteen point fifty-six percent (19,56 %) per year.]

4.3 Unless FIBERCO is notified in writing within forty-five (45) days following the issuance of a bill, the latter shall be presumed exact, agreed to and binding the Customer.

Section 5 - Limitation of Liability

5.1 FIBERCO, being a telecommunications common carrier, shall incur no liability with respect to the communications it transports. FIBERCO’s liability shall be limited to the provision of Services described in the present Contract during the Service Period agreed to between FIBERCO and the Customer.

5.2 FIBERCO cannot guarantee the continuous operation of its Service or its facilities and / or equipments. FIBERCO cannot be held liable towards a Customer, or any other person, of damages resulting from errors, omissions, interruptions, delays, errors or defects in transmission, failures or defects in its facilities and / or equipments, or any other cause.

5.3 Without prejudice to the provisions of paragraph 2.5 of the present Terms and Conditions, in case of Service interruption caused by FIBERCO, its liability is limited to a refund, upon written request by the Customer, of the annual rate of the Service proportionate to the length of time of the interruption calculated on an hourly basis. The refund shall be calculated from the moment FIBERCO is notified of the interruption. Any refund request must be received by FIBERCO no later than 30 days after the interruption.

5.4 Except in cases of negligence or fault, FIBERCO shall not be held liable for any mutilation or damage caused to the Customer’s premises by the equipment or facilities of FIBERCO on the said premises, or resulting from its installation, maintenance or removal. In cases where the Customer is not the owner of the said premises, the Customer will not hold FIBERCO responsible for any claim arising from said mutilation or damage.

5.5 FIBERCO cannot be held liable towards the Customer, or any other person, for any damage to an equipment, a facility, an apparatus or a device provided by or to the Customer following or resulting from the connection or use of the said equipment, facility, apparatus or device with the facilities and / or equipments of FIBERCO.

5.5 FIBERCO shall not be held liable towards a Customer, or any other person, for any damage resulting from a fire, explosion or any other event caused by the installation, use or operation of a circuit or equipment on a location where the air is or becomes flammable or explosive.

5.6 In cases where circuits or physical connections link the Customer’s network to FIBERCO’s network, the latter shall not be held liable for any damage resulting from lightning or other electrical current passing from FIBERCO’s network to the Customer’s network, or from the latter to FIBERCO's network.

5.7 FIBERCO shall not be held liable for:

Fibre-Optics Sale and Maintenance1.1.2 Agreement (the “Agreement”)

FIBERCO MAINTENANCE AND REPAIR CRITERIA

SCHEDULE B

5.8.1 any direct or indirect financial loss resulting from a Service interruption of any nature, and for any cause;

5.8.2 any circumstance or event outside of FIBERCO’s control including, without limitation, fires, accidents, wars, riots, strikes, lock-outs, labor relations problems, acts of God, acts from the civil or military authorities, or inability to obtain from its ordinary suppliers the materials or work force necessary for FIBERCO’s performance of its obligations;

5.8.3 any act or omission from another telephone or telecommunications company, business, or partnership whose facilities and / or equipments are used in establishing connections to points which FIBERCO does not directly serve;

5.8.4 defamatory or copyright infringement arising from material transmitted or received over FIBERCO’s facilities;

5.8.5 infringement of patents arising from the combination or the use of the facilities provided by the Customer together with FIBERCO’s Services;

5.8.6 copyright or trademark infringement, passing off or acts of unfair competition arising from advertising transmitted or received through Services provided by FIBERCO.

Section 6 - Limitations

6.1 Before proceeding with the installation of a Service, FIBERCO may request a deposit or a reasonable guarantee from a Customer having an unsatisfactory credit rating in FIBERCO’s opinion, refusing to provide satisfactory credit information, or presenting a high financial risk.

Section 7 - Confidentiality, Successors and Assigns

7.1 Neither party can disclose to third parties the Terms and Conditions of the Contract without having obtained the other party's written consent unless the disclosure is requested by legal authorities.

7.2 The undertakings agreed to pursuant to the Contract bind the parties as well as their successors and assigns and bind all these persons’ responsibility.

Section 8 - Transmission by fax

8.1 Should FIBERCO agree, the Contract may be signed by the Parties and transmitted by fax. If so, the Contract signed and transmitted as such will have the same effect as if the Parties had signed only one original Contract.

Section 9 - Governing law

9.1 The Contract will be governed by and construed in accordance with the laws applicable in the Province of Ontario and is subject to the jurisdiction of the courts of the judicial district of Ottawa.

Section 10 - Language

10.1 The Parties have specifically requested that this agreement be drafted in English.

Section 11 - Customer’s Service11.1 FIBERCO’s Customer Service may be reached at the following telephone numbers :

-------------

The fax number is the following : ----------

### End ###

Fibre-Optics Sale and Maintenance1.1.2 Agreement (the “Agreement”)

FIBERCO MAINTENANCE AND REPAIR CRITERIA

SCHEDULE B