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TELECOMS AND SOFTWARE NEWS
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Allied Fiber to wholesale long-haul dark fiber network
Paris Burstyn
Allied Fiber to wholesale long-haul dark fiber network
Having linked up financial partners, several railroads, and rights-of-way owners, Allied Fiber's new dark fiber network will provide key carrier-neutral resources for a wide range of wholesale customers across the US. Allied Fiber begins building the first phase of a dark fiber network along railroad rights-of-way
Leveraging the resources of its financial and railroad partners, Allied Fiber recently began installing high-capacity (432 fiber strand) optical cable in ducts running along the Norfolk Southern Railroad right-of-way from New York to Chicago, through Pennsylvania, Ohio, Indiana, New Jersey, Maryland, West Virginia and Virginia. Future phases will deploy the fiber in Georgia, Tennessee, and Florida. The company expects to reach Seattle and Vancouver by leveraging the assets of other railroads. It will also build facilities that connect to international cable landing points in New Jersey, the Caribbean, and Southern California, where sub-sea carriers can meet it at a neutral point.Allied Fiber sees demand for access to physical layer services including dark fiber, co-location facilities and fiber-fed wireless towers on a network-neutral, open-access basis throughout the US. Customers for the services include submarine cable systems, large international and domestic wireline and wireless carriers and operators to small rural carriers, cooperatives, and cable television companies. It also expects Web 2.0, data center companies, and other enterprises that rely on vast amounts of network facility to become customers or to sign on with its carrier customers.At 60-mile intervals, Allied Fiber plans to build and operate regeneration huts and “meet me” facilities on its long-haul network. In parallel ducts it will build short-haul fiber facilities to provide intermediate access points for customers located between these sites. Along the short-haul ducts it will construct and sell access to splicing structures where telcos, MSOs, tower operators, and wireless carriers can connect. The short-haul fiber then provides a route to the co-location facilities along the long-haul network. Customers might also buy wavelengths or other bandwidth services from other carriers already in the co-location facility.Carrier-neutral facilities provide competitive differentiation
Ovum believes Allied Fiber made the right decision to build dark facilities that bring infrastructure to rural and suburban areas where customers can take advantage of low costs for utilities, land, and personnel. These areas are particularly attractive to data center companies that cannot find affordable resources in more developed metropolitan areas.Allied plans to put the fiber within reach of power facilities, real estate that can support office parks, data centers, and college campuses. Its partner, Norfolk Southern, owns huge amounts of land and that will encourage data center development along the route. With the mix of short-and long-haul fiber, Allied's customers can locate in cost-effective areas, link into this dark fiber system which can connect them to other resources, and avoid the cost and congestion of over-developed urban sites. This real-estate business will stabilize infrastructure costs
Essentially Allied Fiber is more of a real-estate venture than a wholesale telecoms play. Telecoms providers will sign 20-year leases for access to the dark fiber, then light and manage it. These customers will compete to supply other intermediaries and customer types. The 20-year lease provides a stable cost basis to the customers. Allied Fiber will charge $45 per pair, per mile, per month for the short-haul portion of its network no matter who the customer is. For its customers, it replaces a complex, time-consuming, and expensive capital expenditure item with a simple and predictable operating expense.With these facilities at their disposal, wholesale intermediaries can light the dark fiber and use local access points to enable a wide range of customers to serve other established and emerging companies (such as other carriers, data center facilities, Web 2.0 firms), to locate where resources are least expensive, and where talent can enjoy the wide range of activities that these communities provide.Other companies have followed a similar railroad-based build-out strategy in Europe. We will follow Allied Fiber's network rollout with interest as it seeks to break the stranglehold of the existing US long-distance carriers and LECs.
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