Verizon sees potential in dark fiber-based 5G backhaul

David Small, EVP of wireless operations for Verizon.

A Verizon executive said the provider is keen on adding more dark fiber to its diet, citing the potential of near ubiquitous bandwidth to support current 4G and upcoming 5G wireless deployments.

David Small, EVP of wireless operations for Verizon, told investors during the Oppenheimer 19th Annual Technology, Internet & Communications Conference that dark fiber allows Verizon to more rapidly scale bandwidth since they control the asset.

“As we’re building out this network, you do more of it with dark fiber and you light up the ends with your own electronics so you’re not going out and continuing to re-up service contracts that you’re buying from third parties,” Small said.

A typical scenario is that Verizon could light a macro cell site initially with 100 Mbps, but over time the telco could scale that to 300 Mbps or 1 Gbps as needed.

“The notion of dark fiber is that you just swap out the electronics and you can redeploy those electronics elsewhere,” Small said. “The dark fiber allows you infinite scalability.”

Overall, Verizon’s preference for dark fiber is to cut wireless backhaul costs. As Verizon migrated its wireless network from CDMA 1EVDO to 4G, the service provider found it could save money by implementing 50 Mbps or higher versus a bunch of T-1 circuits.  

“When we went from EVDO to 4G and this notion of you can light up a cell site with 4 or 5 T-1s and you get 1.5 Mbps circuit with each circuit costing a couple hundred dollar or you can light up with a 50 or 100 Mbps service and the equivalent cost is drastically lower,” Small said. “With 5G we do believe that dark fiber and lighting up ourselves is the better way to go from a cost point of view so we’re pre-positioning ourselves to do so.”

While Small would not say how many of its wireless sites have dark fiber, it’s clearly an ongoing priority.

“I don’t know if we disclosed that and I don’t think it’s half way yet, but just about every large scale infrastructure build we do we look at it, negotiate and get dark fiber,” Small said. “That’s definitely the direction we’re going in.”

Having already purchased MCI and its pending acquisition XO, two companies that had deep fiber assets, the telco’s preference is to leverage as much of its own facilities as it can.

Verizon will bolster its dark fiber holdings with the pending acquisition of XO Communications. Once complete, Verizon will immediately gain access to dark fiber and metro network assets in 40 major U.S. markets with over 4,000 on-net buildings and 1.2 million fiber miles. The service provider's intercity network also spans 20,000 route miles connecting 85 cities.

“My inclination is to use fiber assets we own,” Small said. “When you think about the fact that we bought MCI and all of the legacy-based fiber companies they had coupled with the XO acquisition we announced that really gives us a really strong foundation for most major cities from a fiber infrastructure that we’ll continue to build.”

Leveraging its own fiber makes sense for wireless backhaul, particularly in areas where Verizon has deep fiber assets. However, it can’t build out everywhere so Verizon can turn to a growing set of emerging players that want a piece of the dark fiber opportunity.

This trend is being pursued on two fronts: emerging competitors and regional ILECs.

Emerging players such as Cleareon, Cross River Fiber, Fatbeam, FiberLight summitIG and Zayo have been aggressively offering dark fiber to wireless operators, which want to use dark fiber for 4G and future C-RAN and 5G deployments.

Zayo Group has won a number of Tier 1 dark fiber deals with Tier 1 wireless operators in Texas and other markets, for example.

However, regional ILECs like FairPoint and Lumos are also getting into the game as a way to scale wholesale revenues to battle legacy voice service declines. Lumos, which is in the process of creating a company focused on fiber services, completed an 822-mile fiber network to serve a 257 unique site contract.

Despite Verizon's thirst for dark fiber, the telco has no plans to start offering dark fiber to other providers. Similar to fellow ILECs AT&T and CenturyLink, Verizon has no interest in enabling competitors with its facilities.

For more:
- listen to this webcast (reg. req.)

Related articles:
AT&T, Verizon, and competitive providers remain divided on dark fiber, but interest is rising
Verizon's 5G plans could spell dark fiber opportunities for Zayo, Level 3, others