Could a fiber conduit interstate boost U.S. broadband competition?

fiber optic strands
Analysts from LightCounting Market Research and Dell'Oro Group weren't convinced a proposed open access conduit system would be successful. (planet_fox from Pixabay)

Shrihari Pandit, CEO of New York City-area fiber ISP Stealth Communications, argued the creation of an open access conduit system across the U.S. could help spur broadband competition by lowering barriers to entry for new players, but analysts weren’t sold on the idea.

In an interview with Fierce, Pandit pitched the construction of a conduit highway akin to the Interstate, which would allow fiber to be more easily run between cities and towns. The CEO stressed the government should only be responsible for building the conduits and not for running fiber or other lines, leaving decisions about what technology to use up to providers.

In the long term, he argued such infrastructure would be more effective than government subsidies in spreading broadband across the U.S. and increasing choice for consumers by allowing “independent ISPs to come back.”

“I’d love to see the entire USF [Universal Service Fund] funds recycled to build this, and perhaps this could also come out of [President Joe] Biden’s infrastructure plan,” Pandit said. “Right now we’ve been funding a handful of providers billions of dollars annually to build out to rural parts of America and the problem is it’s not really in the public’s benefit…when we hand out these billions of dollars we’re only guaranteeing the success of one provider and we’re not really investing in the marketplace.”

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He added construction of the proposed system would likely take a decade or two to complete, but could be rolled into planned upgrades to roadways and bridges.

Pandit acknowledged a lot of work would need to hammer out the details for the creation of such a conduit system, but said there is interest among some government officials in creating neutral broadband infrastructure.

In the real world

Indeed, New York City (NYC) in March issued a request for proposals (RFP) for its Universal Solicitation for Broadband project. The RFP included three workstreams, with one specifically dedicated to the creation of open access broadband infrastructure “which the City intends to make available on a non-exclusive basis to all appropriately authorized franchisees and broadband network operators,” a copy of the document showed.

Aaron Meyerson, deputy CTO for Broadband in the NYC Mayor's Office of the CTO, told Fierce the city decided to issue the RFP after running a “pilot version” of its solicitation last year, aiming to bring broadband to more citizens in public housing. In a request for expression of interest (RFEI), ISPs were offered open access to New York City Housing Authority (NYCHA) assets –rooftops, light poles and other physical structures – to mount the necessary infrastructure to provide low or no-cost service to residents. Results of that effort were announced in May, with five ISPs signing on to offer broadband to more than 30,000 people.

“It really was a proof of concept that there’s appetite from the internet provider landscape and that residents are willing to have new providers come and provide new service that hasn’t been available to them previously,” Meyerson said.

“The open access piece is about ensuring that infrastructure gets built in underserved areas,” he continued. “We are trying to change the ecosystem of broadband in New York City  by bringing in new providers, encouraging investment in underserved areas, and we are looking for low and no cost options available that aren’t just subsidizing incumbents that are there.”

While the pilot only granted providers access to NYCHA assets, Meyerson noted the RFP makes available 100,000 assets from 18 different city agencies. “This is really the first time we have a coordinated, city-wide effort across all the different agencies, so I think that’s pretty unique,” he said.

The RFP closed in April. Meyerson said a review of submissions is underway, adding the city is hoping to “see progress by this summer.”

Analysts' take 

John Lively, principal analyst at LightCounting Market Research, told Fierce Pandit’s idea isn’t new, noting a “fiber conduit today is analogous to telephone poles back when AT&T was a government monopoly. An ‘open access’ regulation has been talked about for many years.” But he said such a conduit system would “disenfranchise a number of corporations that have invested in fiber assets, conduits, and poles” and concluded the likes of Verizon, AT&T and Comcast would “surely fight it in court.”

He also pointed out that the idea “implicitly assumes that the only broadband competitors will also be using fiber” in a world where mobile and satellite options are becoming viable.

Jeff Heynen, Dell’Oro Group VP of broadband access and home networking, told Fierce “if you’re going to propose a model like this, now would be the time to do so,” noting “the concept is at least on the table” as part of several different infrastructure and broadband bills under consideration.

But another Dell’Oro Group VP, Jimmy Yu, said “the U.S. has already gone through a cycle of intense competition among telecom operators.” He noted “at one point in time before the dot com bubble bust in 2000/2001 there were over 1,000 CLECs (competitive local exchange carriers) all vying to dislodge the hold of the few ILECS (Incumbent Local Exchange Carriers) such as AT&T. Most of those CLECs closed or were bought up into a bigger carrier.”