FierceTelecom 2010 Prediction: Middle mile march

In bridging the so-called broadband divide, service providers in underserved areas will need competitively priced interconnection and backhaul facilities to major network interconnection points. Enter the middle mile. Like our other predictions this week, the middle mile really is a reinvention of a concept that has already existed--with many telephone cooperatives (Iowa Network Services and Syringa Networks) who pooled resources to provide their members with everything from long-distance voice transport, optical and even video transmission. Now the middle mile has become the center of attention in the Obama administration's broadband stimulus funding grant award process.

Thus far, the NTIA and RUS have awarded four states (Georgia, Maine, New York and South Dakota) funding grants for their middle mile projects. Of course, these projects came with the usual protests from the large cable MSOs and ILECs. Case in point is New York's ION. ION Holding's (formerly the Empire State Network) proposal to build a middle mile network to connect 70 rural communities in upstate New York and parts of Pennsylvania and Vermont, was protested by local cable company Time Warner Cable who claimed the area ION was targeting is already well-served. Regardless, ION prevailed and won a $39.7 million grant to build a middle mile network.

In addition to the states, wholesale carriers (360 Networks and Level 3), while having facilities in rural and remote regions, have also poised themselves as middle mile providers by applying for broadband stimulus grants. Traditionally, these carriers never extended services to rural carriers because they could not economically justify building facilities to reach remote providers. But instead of building whole new networks, 360 Networks and Level 3 want to use the funding to leverage and extend their existing long-haul network facilities (optical regeneration huts) that reside along the path of their long-haul networks. However, 360 Networks, Level 3 and other proposed state-run middle mile projects such as Massachusetts' Open Cape and Microelectronics Center of North Carolina weren't part of the initial funding cut. Regardless of the approach, or who wins in the second round of stimulus awards, the proof in these projects will really be seen when local providers and other entities can tap into these networks.

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