Wednesday, November 29, 2006

Jump-Starting the New Economy with Fiber

By Masha Zager
Oct 23, 2006, 12:26

Once a country of coal mines and steel mills, Wales is now a high-tech hub. Fiber optic connectivity is key to the country’s transformation.

Two generations ago, Wales was famous for its coal mines and its steel mills – an economy dominated by heavy industry and a history of labor unrest. Today, this region of the United Kingdom is a high-tech hub, with companies in the vanguard of software design, digital media, opto-electronics, telematics, automotive design, bioscience and many other advanced technologies.

How did the country make the transition from the old economy to the new one? By leveraging assets left from the old economy, creating new ones, and bringing them all together in new ways. Fiber optic networks are an important piece of the puzzle.

Old Assets, New Purposes

One legacy of the old heavy-industry economy – because steel mills use a lot of energy – was a high-capacity electrical grid in South Wales. The abundant supply of electricity made the area attractive for large data centers, which also have enormous requirements for electricity. The existence of data centers then became a driver for further investment.

Another legacy was the fiber optic infrastructure that had been built by the British military. Much of this fiber infrastructure was eventually decommissioned by the military, and the dark fiber became available for civilian use.

A final important asset was the educational system. Wales is home to a major national university and a number of smaller educational institutions, some of which have outstanding scientific research facilities. Currently about a quarter of the students graduate in high-tech disciplines.

A digital media industry sprang up around Cardiff, the Welsh capital, in part because the area’s low rents were attractive to startup companies and in part because the Welsh-language television station located there had trained a pool of workers skilled at developing content that could be easily dubbed, like animation. (English-language television stations have never had to worry about exporting their content.) Web designers and facilities companies followed on the heels of the film and television producers.

Promoting Business Investment

The Welsh government has successully courted foreign investment with grants and other incentives, along with information about the country’s fiber optic lines, data centers, skilled workers and university research facilities. More than 200 North American companies, including Ford, General Electric and Dow Corning now operate in Wales.

But the government also focuses on developing homegrown high-tech companies. The 18 Centres of Excellence, or university-industry partnerships, have benefited local companies as well as multinationals, leading to breakthroughs in fields ranging from machine communications to radio wireless communications to bio-informatics.

Yet another strategy has been the creation of high-tech incubators where startups share access to advanced computing equipment, research facilities, high-speed networks and other infrastructure. The Technium incubator – the result of a partnership between the Welsh government, the University of Wales, the European Union, and private-sector companies – began with a single installation in 2001 and now includes nine facilities throughout Wales, with a dozen more planned. Each Technium focuses on a different sector – sustainable technologies or performance engineering, for example.

Early-stage digital media companies that aren't ready for the Technium environment benefit from the @Wales Digital Media Initiative, funded by the Welsh Assembly Government and the European Regional Development Fund. Entrepreneurs can set up shop in an @Wales facility with nothing except their entrepreneurial vision. They rent space, services and equipment – everything down to a desktop computer – at commercial discount rates, sometimes by piggybacking on government contracts. Specialists are available to give them advice about financing, marketing and other aspects of starting up a business.

Bringing Broadband to Business

To supply these high-tech companies with broadband, @Wales’ Intelligent Cities program bought up fiber connectivity that the military was decommissioning, aggregated it and made it available to companies in Southeast Wales at affordable prices.

“Media industry use is very peaky,” explains Evan Jones, the head of digital and incubation for @Wales. A film company might upload a huge video file for a news segment, and then not make any significant demands on the network for the next 24 hours. Because the companies aren't all using the network at the same time, they can share 100 Mbps of bandwidth without interfering with each other’s use.

One typical Intelligent Cities client is an animation company that sends successive drafts of animated videos to clients for review. Another client is Cardiff’s Millennium Stadium, an arena for soccer games that is blanketed with wireless access, particularly in the press area. Press photographers and cameramen can send photos and video footage to their news organizations during and after soccer games, using the Intelligent Cities fiber for backhaul. “The amount of bandwidth needed is awesomely large,” Jones says. “Then the next day it’s near zero.”

Though the digital media industry uses by far the largest share of Intelligent Cities bandwidth, there are other clients that have similar needs for “bursty bandwidth” – for example, a radiologist who works remotely for a hospital in the United States, an arts organization that streams live performances to widely dispersed audiences and a plastics manufacturer that has to send and receive large CAD files.

To keep costs down, Intelligent Cities configured its fiber network with a central media server, as if it were an office LAN. With this setup, sending a file between two users of the network doesn’t require actually moving the file, only changing the permissions associated with it. This enables local users to “download” huge files instantaneously.

The success of Intelligent Cities led to a new project that began this year – FibreSpeed Wales. Because no private operators would bring broadband to industrial parks in less-populated North Wales, the Welsh government started the project itself, with partial funding from the European Union.

FibreSpeed Wales follows the public-private model that many U.S. municipalities have used successfully. Based on an RFP issued this spring, a vendor was selected to design and build high-speed fiber optic networks at North Wales’ 14 business parks. The government will then select a company to administer the networks on an open-access model, allowing any provider to offer Internet service with 10 Mbps symmetrical speeds or higher. The Welsh government is hoping that FibreSpeed Wales will provide the same economic benefits in the north of the country that the Intelligent Cities program has provided in the south.

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