Google Fiber's move to delay certain FTTH builds may have sparked concern from industry pundits that the service provider is turning its back on fiber, but these moves actually allow it to consider a new strategy: sharing dark fiber networks.
Besides using millimeter wave wireless as a way to scale its network reach, leasing dark fiber from a host of other providers or even local municipalities that have laid fiber for their own internal use, is a palatable solution to scale its network.
“Given the large capital requirements and above outlined challenges of fiber network builds, we believe that companies are increasingly utilizing shared dark fiber as a way to achieve better economics on planned expansions,” said Barlays in a research report.
Google Fiber indicated its desire to seek out alternatives after a recent report emerged that the service provider’s planned buildouts of 1 Gbps in San Jose, Mountain View, and Palo Alto, California are on hold.
While leveraging millimeter wireless is a less expensive alternative to wireline internet service, the service provider can also tap into a bevy of dark fiber networks being built in a number of U.S. cities.
Google Fiber purchased Webpass, a competitive provider that provides Ethernet-based services to businesses using a mix of fiber and broadband wireless technologies to deliver broadband services to businesses and residential customers.
Already, Google Fiber is taking this tack in markets like Huntsville, Alabama. The provider previously entered in an agreement with Huntsville Utilities to rent dark fiber assets to deliver its 1 Gbps service to the city's residential customers. Thus far, no other large service providers have signed on to take advantage of the utility’s dark fiber network.
Under the terms of the agreement it has with Huntsville Utilities, Google Fiber will lease access on the network, which in turn will connect customers to a FTTH internet service. When Huntsville Utility completes the network in mid-2017, Google Fiber will provide its 1 Gbps service to residents and small- to medium-sized businesses, and plans to cover the entire city within four years.
Huntsville Utilities has begun installation of the distribution network, which will include hubs and colocation points where Google Fiber can connect to get network access.
Outside of Huntsville, a report emerged in February that Google Fiber is working with San Francisco to use existing fiber the city installed to serve "some apartments, condos and affordable housing properties."
Google Fiber, or other service providers that want to scale their fiber reach, are not the only entities that can benefit from newly available dark fiber facilities. Service providers that sell dark fiber like Fatbeam, WANRack, Zayo Group, ZenFi, and others will also benefit as they’d have another customer target.
Zayo, for instance, has 110,000 fiber route miles and derives over 38 percent of its non-Canadian revenue from dark fiber.
“The challenges facing Google Fiber’s rollout emphasize the value of existing fiber assets, and illustrate the long term economic benefit of a shared infrastructure model,” Barclays said. “Within our coverage universe, we continue to view Zayo as well positioned to capitalize on the growing demand for dark fiber.”
- read this report (reg. req.)
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