Middle mile, dark fiber networks are needed to drive more rural broadband

NEW YORK--Whether it's the broadband stimulus program or the Connect America Fund, there has been no shortage of efforts in recent years to drive broadband into rural areas. However, a growing number of service providers say that there should be more focus on providing middle mile fiber-based networks that can backhaul traffic and connect with major Internet peering points.

Speaking during the JSA Telecom Exchange event, a group of panelists that operate in rural areas agreed that new government programs should mandate that applicants build out dark fiber networks where they sell wholesale to other service providers.

One of the key challenges any service provider has is making a business case to serve a rural market because the return on investment is harder to justify because there aren't as many customers to address than it is in a major metro area.

Peter Aquino, chairman, president and CEO of Broad Valley Micro Fiber Networks, said that in order to effectively make a business case to invest in bringing fiber to rural markets, service providers need a three-pronged approach that includes: an anchor tenant, customer demand, and some way to supplement the business case with government programs. These programs could include the USDA's Community Connect grants and the FCC's Connect America Fund I and II.

"No doubt, the rural broadband business case as our colleagues here would admit is a tough business case," Aquino said. "The fact is there is demand there and the USDA through their rural utility service group is really focused on trying to help enable companies like ours to fix that business case."

Not all government programs that tried to tackle the unserved and underserved broadband problem were a smashing success, however.

The earlier Broadband Technology Opportunity Program (BTOP) had its share of challenges with a number of mismanaged projects and funds not being spent on their intended use.

"I think the BTOP program was somewhat of a miss because they gave out a lot of money--probably millions of dollars--but they're still looking for the results of that," Aquino said. "I think the new generation can prove we're using the money wisely."

Rich Ruben, vice chairman of PEG Bandwidth agreed, adding that there should be a growing focus on enabling more providers to serve as wholesalers focused on selling dark fiber services.

"The challenge is how do you make the broadband business case work in a rural area," said Ruben. "There have been a lot of fits and starts and the government tried a lot of different methods, but I think we need to focus more on the real issue, and the real issue is once you do you get fiber into those areas."

Ruben added that the FCC and other government organizations offering grants to expand the availability of broadband into underserved and unserved areas should require applicants to use the money to develop a wholesale business service.

"What we need to be able to do is have plans that motivate companies to build these broadband fiber networks with high strand counts that act like the roads and then I think we need to require recipients in the grants to be in the dark fiber business," Ruben said. "Too many times we give that grant out to somebody that wants to be an ISP and they build the fiber and use it for themselves."

But not everyone thinks that getting an anchor tenant is the right approach to build a business case.

Sean Mills, President and CEO of Green House Data, said the state of Wyoming implemented a strategy that made the state more attractive for data centers to be built. As a result of this strategy, they were able to drive support for 1-100 Gbps services not only in major cities, but throughout the state.

"Instead of implementing a push strategy, the state of Wyoming implemented more of a pull strategy to attract data centers and then attract customers," Mills said. "The interim strategy of ensuring the data center moved into the market brought the metro style circuits with redundancy and capabilities that we were able to spread more quickly throughout the city but as the jumping off point for the rest of the state to support 1, 10 and 100 gig circuits around the state."

Regardless of the various approaches, there's been no shortage of fiber-based middle mile networks being built in recent years to address the rural broadband problem. Some examples have been driven by pioneering efforts such as Independent Optical Networks (ION) and the Massachusetts Broadband Institute (MBI).

One of the interesting side benefits of MBI's middle mile fiber buildout in Western Massachusetts, an area which has been typically ignored by larger carriers and cable operators, is that it has helped facilitate towns like Leverett, Mass., to build their own 1 Gbps fiber-to-the-home (FTTH) service.

Additionally, a host of emerging dark fiber providers have been finding a niche in the dark fiber business--such as Fatbeam, a regional provider based in Coeur D'Alene, Idaho, which is initially building to school districts in the areas it serves.

Once it gains a school district anchor tenant customer with dark fiber, Fatbeam will then look for other wholesale opportunities with wireless operators and attract business customers that have little choice besides the local LECs' slower copper network service.

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