Underline Infrastructure’s plan to bring open access networks to the U.S. is chugging along, with the company announcing service is now live in its initial market of Colorado Springs. It also revealed it has secured new backing from private equity firm Ares Management, adding cash to its expansion warchest.
The company first announced its plans for Colorado Springs in October 2021. At the time, CEO Robert Thompson told Fierce Underline’s business model is a bit different from other open access providers in the country since it provides not only fiber to the home but also a unified billing system and cybersecurity protections. Customers simply hop on the network and choose their ISP from a range of options. He noted the company had just initiated construction and was planning to offer speeds of up to 10 Gbps for residential customers and 100 Gbps for enterprise subscribers.
Thompson told Fierce in an update its network in the city is now up and running. Residential customers currently have their choice of three different ISPs offering symmetric gigabit service for $65 per month. Underline has also onboarded the Catalyst Campus for Technology & Innovation as its first 100 Gbps customer and added Altia and the Colorado Springs Airport Peak Innovation Park to its roster of enterprise clients.
The CEO said the early response to its service has been extremely positive. “People have been blown away,” he stated. “Residential customers [are] using the word transformative, not us, about the change. The notion of being able to choose at your desktop who fulfills the internet access piece, it’s almost so revolutionary people have to think about it, like ‘wait, you mean I can change them?’”
Additionally, Thompson touted a fresh influx of funding from Underline’s newest private equity partner, Ares Management. While he did not specify how much funding it is getting, he stated “It’s more capital than I can spend in the next period.” Underline is Ares Management's first digital infrastrucutre investment.
As to how exactly it plans to spend that money, Thompson noted it already has signed agreements with the cities of Fountain, Colorado and Salinas, California for expansion projects and is having “active conversations” with a number of other communities across the country. He said it expects to make announcements about its plans for 2023 later this year.
“What the country doesn’t need is more fiber superhighway capacity. We actually have a ton of that,” Thompson said. “What we do need is somebody that can use technology and private capital to actually partner with communities to build out the many regional and local community infrastructure to then attach to that national fiber superhighway system. So that’s where we’re focused.”
That said, Thompson said Underline knows it won’t be able to reach its entire 2,500-community target alone. So, in addition to building, owning and operating infrastructure in certain markets, it also plans to license out its technology to “the right community partners.”
“There is a very substantial appetite, including in the capital markets, to build, own and operate these assets, but it’s also not my place to tell a given city’s leadership what they have to believe on the right way for the physical fiber to be owned,” he said. “Some communities will actually have bonding capacity to build and own the fiber themselves and they want to do that.”
He continued: “I suspect for the next several years most of our community builds will be owned and operated by Underline. But to solve the problem in our country, mainly getting those communities the intelligent infrastructure that they need, we’ll absolutely serve the right communities with partners with technology and operational expertise if that’s what they need.”