While the open access fiber internet model isn’t exactly popular right now in the United States, it has been booming in Europe for nearly 20 years. For instance, Open Infra Inc., an open-access fiber network operator based in Texas, actually got its start in Sweden in 2009 and witnessed the excitement around it firsthand.
An open-access fiber network is one where a developer builds one core fiber grid to service an area and, from there, a variety of internet service providers (ISPs) can use that infrastructure to deliver service and bill a final customer.
Fiber-to-the-home (FTTH) happened very early in Sweden — around the year 2000. Open Infra’s founder Johan Sundberg launched the company in 2009 with the goal of delivering FTTH to rural communities outside of city centers, like Stockholm. Most of the network operators in the market at the time were focused on connecting dense apartment complexes in urban centers, not the homes with miles between them. The business started small for the first couple of years, but exploded as open-access networks became increasingly popular with more demand.
Carl Åhslund, CEO of Open Infra, spoke with Fierce Telecom this week. By Åhslund’s estimation, over 99% of Swedes now have access to symmetrical, gig-level internet speeds, and that’s even the homes far out in the bush, as he calls them. Once open-access networks effectively reached the majority of Sweden, it was time for the team to expand to other European markets like Norway, Germany, and the U.K. According to Åhslund, at one point Open Infra was the second-largest FTTH access provider in Scandinavia.
The team has also expanded to the U.S. market, breaking ground in Texas in early 2021. The organization currently offers services in north and east Texas, as well as Tampa, Florida where residents can access a fresh fiber grid.
Market Differences
Any transition from one market to another, even domestically, comes with slight and cosmic changes in customer preferences and the competition’s behavior. Breaking into the American fiber marketplace has come with curiosities that differ from European markets.
“Customers expect to get their connection quick, and we have to challenge rural Americans to have a certain level of interest by the time we build,” Åhslund says. “The process is longer.”
Any new domestic market for Open Infra starts with intensive research into gaps where suburban or rural communities have little to no access to quality fiber internet. From there, the team knocks on doors, hands out fliers, explains the concept of digital infrastructure to residents, arranges town hall meetings and interfaces with municipal leaders. Once enough interest is generated, future customers must sign onto a two-year contract to guarantee their service term from the service launch date.
A potential customer has to wait three to six months from breaking ground to when a network is fully built and ready to go. Open Infra funds its own construction from investors on the Nasdaq Stockholm and banking partners. Over time, it will make its investment back from the transmission fees charged to partnering ISPs.
Another cultural difference between the European telecom market and the stateside one is the industry attitude toward overbuilding. It’s uncommon to overbuild fiber networks in Sweden, whereas this practice is completely normal in the U.S. For example, one day an Open Infra team was on one side of a street working on a project. A competing ISP was directly on the other side of the road installing its own fiber.
“It’s a waste of resources more than anything,” Åhslund says. “Everyone fights, they have to build their own network if they want customers, but it doesn’t make sense. You don’t have two water lines.”
That’s why a big part of Open Infra’s work is educating communities and eventual customers about the core idea of open-access networks. It’s easier to explain how these systems work face-to-face, and once customers get over the expectation of immediate service, Åhslund has found community reception to be fantastic.
“One company builds the infrastructure, and you choose who sends your bill,” he said. “It makes sense to have shared infrastructure.”
In Tampa, the main fiber competition is Frontier. In central Texas, AT&T Fiber takes the cake. In the future Open Infra is looking at other potential states of interest like Georgia, Illinois, Oklahoma and Louisiana with hopes to expand farther.
“We don’t rush into areas and try to build the most or the fastest,” Åhslund said. “To us, we’re looking long-term. As long as we can make the capital back in the long run and build at the right cost, that’s what we do.”
Open Infra currently has eight partnering ISPs that deliver service from their grid to the final customer, including including Element8.
By the end of the year, it expects to have 30,000 homes connected, with a goal to build out and connect 50,000-100,000 homes per year.
At first, the team aimed for smaller providers that were already utilizing open-access networks across the country, like Voonami. But a good portion of partners are fixed wireless carriers who can’t afford to build-out their own fiber in new markets, but want to provide that service to their customers. The team has also been in talks with larger ISPs.
BEAD Funding
While the timing for Open Infra’s break into the American market may look like it aligns closely to the Broadband Equity, Access, and Deployment (BEAD) program’s announcement, federal funding isn’t applicable to it.
“I don’t foresee at this stage that we’ll apply for any BEAD funding,” Åhslund said. “There is so much more we can build, that we’re happy to build, that doesn’t require BEAD.”
The core motivation of the team’s break into North America has been the market size and expansion opportunities, especially since those facts intersect with the team’s experience of building out fiber in rural communities.
“They don’t have alternatives, [and if] someone builds, no one else will build there, so they’ll be stuck with one provider forever,” he said. “With open-access, they’ll be given choices of different providers.”
In the next 10 years, Åhslund is aiming for the team to sign up one million subscribers across the United States.
“I would like us to be perceived as a pioneer who drove the open-access model expansion in the U.S.,” he said. “Even if there are others, we can make it more mainstream.”