FairPoint changes its dark fiber tune as E-Rate, small cell backhaul opportunities emerge
Incumbent carrier FairPoint Communications is changing its tune on dark fiber services, advocating the technology as the changing E-Rate program for schools and opportunities around small cell technologies are too good to pass up.
"The E-Rate program changed this year to now offer funding to schools that want dark fiber, which was never included before," said Chris Alberding, VP of product management at FairPoint Communications, in an interview with FierceTelecom. "A lot of schools this year when they put out their 470s asked for not only lit services, but also dark fiber services to complement that."
As part of the FCC's E-Rate order that was issued in 2015, the regulator amended the eligible services list to support the equal treatment of lit and dark fiber services. What this means is that local school districts will be able to purchase either kind of service depending on their specific needs via an FCC Form 470 application.
However, the FCC noted that any applicant that issues RFPs for dark fiber will be required to seek bids for lit services like wavelengths over the same time period. Additionally, applicants have to include network equipment and maintenance costs associated with lighting dark fiber in the same application with the dark fiber lease.
Alberding said that despite the allure that dark fiber has for school districts in terms of being able to control bandwidth, the technology is not without its challenges. A growing number of school districts have seen their budgets cut in recent years, so the question is whether they have the IT resources to carry out the deployment.
"It becomes a question of what's the most efficient path for them, what's more scalable and, more importantly, do they have the expertise to do that because the wireless carriers are much more equipped to do dark fiber than the local high school," Alberding said. "If I think about the last five years in education, the theme has been reduce, reduce, reduce and IT departments have gone from five people running a small school district to one guy being the IT guy. Now you have those same schools saying we want dark fiber to connect our campuses."
Unlike a lit service like wavelength or Ethernet, a school that purchases dark fiber has to go and buy its own optical gear. Also, the school district will have to monitor the services that run over dark fiber by themselves.
"When I look at it there's a significant capital expense on their part to light that dark fiber and all of the monitoring and management tools and none of that comes with dark fiber," Alberding said. "There's no such thing as managed dark fiber so it puts you in a place where you want that level of comfort and we're giving them the option, which is a different stance for FairPoint and most ILECs."
Being a traditional ILEC, FairPoint's formal entry into the dark fiber space is a bit of an anomaly.
However, the service provider realized that it needed to have a product that would enable it to stay ahead of emerging competitive threats from cable operators like Comcast Business (NASDAQ: CMCSA) and FirstLight Fiber.
FirstLight has been rapidly expanding its presence throughout Northern New England states like New Hampshire. In 2014, the service provider purchased G4 Communications' assets, including its customer base and its Manchester, N.H., data center. The service provider also offers 100G connectivity services at any of its on-net building locations in upstate New York and northern New England.
Alberding said that while it wants to be a provider of dark fiber, the service provider still sees a healthy demand for lit services.
"We're pretty early into the dark fiber approach and it's a competitive market up in Northern New England so we can be picked apart, one fiber strand at a time, or we can jump on board early and partner with our customers," Alberding said. "There's no doubt that over the coming years we'll see more migration to dark fiber, I would not call it the end of lit services because not everyone is going to want that responsibility."
Alberding said that FairPoint sees various rollout scenarios for dark fiber, meaning that it has to be creative with customers.
"If we have the available fiber, we'll give that over to a customer under a leased dark fiber arrangement," Alberding said. "If not, we'll build it and we'll either split the cost with the customer from a build perspective or build a business case where we would absorb the costs in the monthly occurring lease."
Alberding added that "with the pricing approach you have to be flexible because you'll have some customers that would rather pay much higher fee up front and some customers that want to have the costs spread over their lease."
What drove FairPoint to finally enter the dark fiber race was the emergence of wireless operators rolling out small cells in their networks to increase coverage for current 4G and upcoming 5G network services.
Given that it operates in Tier 2 and Tier 3 markets, FairPoint has not seen a large amount of small cell networks in Northern New England yet, but the provider wants to be prepared.
Sprint said during its fourth quarter earnings call that it would be using a mix of 2.5 GHz spectrum and dark fiber for small cell backhaul. While the wireless operator has not revealed exactly where it will deploy small cells, FairPoint could eventually become a dark fiber benefactor as the wireless operator looks to enhance coverage in Northern New England.
"Lit services were fine for the wireless operators' macro towers, but now with C-RAN and what C-RAN's latency requirements are you can't logically deliver that over a lit circuit," Alberding said. "In order to deliver the speed, the throughput, and low latency those guys require dark fiber so that was the first step for us and let's build a proactive product offering to get into the wireless space."
Complementing its dark fiber capabilities, FairPoint also offers a set of construction and network services to wireless operators that are building out small cells.
Joining Zayo and other providers, the service provider launched a Construction Solutions set for wholesale customers.
FairPoint can deliver a set of turnkey small cell solutions, including macro tower site preparations and small cell C-RAN site builds. The service provider can also provide a series of complementary services such as pole attachment and licensing, fiber construction, custom BBU locations, connectivity and ongoing maintenance of small cells.
"I can come to a provider and we can offer them small cell as a service," Alberding said. "Instead of saying I am your network connectivity provider, I can deliver all of it or whatever pieces you want and that's resonated really well with the bigger wireless carriers."
Although the large wireless operators will likely focus on building out small cells in larger markets like Boston and Chicago, FairPoint has been working with these operators on how small cell backhaul would work in the Northern New England market.
"We're not in Tier 1 markets and they're starting with the NFL cities in building out their small cell strategies there, but they are testing scenarios in some of the small markets up here," Alberding said. "We have had the opportunity to do a couple of C-RAN deployments, run some dark fiber and learn from some of our early deployments with customers and it's helped shape our small cell as a service offering."
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