Late last week, ground was apparently broken on a new intercity fiber project between New York City metro area and Ashburn, VA. They’ve got all the planning and rights of way in place, and were set to break ground on Friday. The company behind the project, United Fiber & Data, has some rather unusual backers.
The UFD network will take the high road to Ashburn, eschewing the popular and crowded I-95 corridor. Instead it will swing west through the Pennsylvanian cities of Allentown, Reading, Lancaster, York, and then pass through Frederick MD before swinging into Ashburn through the back door. The 300 mile route is a bit longer of course, although it will be designed to minimize latency as much as possible in all other ways. But it’s the diversity and the stops along the way that will be the real selling points.
And the unusual backers? Three members from the rock band +LIVE+, Chad Taylor, Patrick Dahlheimer and Chad Gracey, who hail from York PA. Many of the cities along this route have historically been relative bandwidth backwaters, York especially, and these guys have decided to turn a few of their platinum records into fiberoptic cable for their home turf. Likewise, the management team is led by industry veterans of USLEC and PPL Telcom (and others of course), companies that served the same region before being overtaken by consolidation a few years back.
Sounds like quite a project, and there are still many questions, such as just how the funding is really going to work. Remember that Allied Fiber and its vocal CEO Hunter Newby have been trying to put a similar route in place for some time now (also going out to Chicago of course) that also focused more on the in between destinations, but that project has yet to materialize. There is also Sidera’s existing alternative that also takes a more westerly route, just not this westerly, thus competing for the same diversity-seeking customers.
The NYC to Ashburn/DC route is one of the most competitive wholesale routes on the planet, and building a new longhaul fiber route like this is hard to justify on paper. Even with a huge low latency advantage, Spread Networks’ effort between NYC and Chicago has had some difficulty with the realities of the bandwidth markets. It’s hard to see what UFD brings to the table beyond the good intentions of deep-pocketed locals in the region, but perhaps that’s all they need if they’re starting with enough funding and build smart. We shall see.
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I have some of the same thoughts mentioned in your last paragraph as well, and this topic brings about soemthing ive been thinking on lately. Lets call in metro vs longhaul, and some quick bullet points.
Longhaul:
Large upfront investment (mostly)
Limited customer base
Most major routes established for a long time already
Metro:
Continious investment
Large customer base
Most cities could always use more metro fiber
If you where an investor, where would you see the largest expansion over the next 10 years? Id have a hard time understanding why anyone wouldnt say Metro? The increase for high bandwidth need (cloud, replication, DIA access, etc) is only going to increase, and those that have the fiber in the ground will get the business, and most of the longhaul routes to get that traffic from place to place is already there.
Now dont get me wrong, there will always be a place for some longhaul, or regional expansion (See zayo’s map for example), but i cant see it being anything close to what metro will do. For example how many customers really need another NYC-Ashburn route? Obviously they will pick up some on the stops along the way, but really whats the count? Several hundred? In a large city, how many possible customers would you have ? NYC jumps out with lightpath having 5500 buildings on net.
I do have some first hand expierence with this as the company i work for has ~120 remote locations, and we have metro fiber in over 80 of them (comcast, time warner cable, TWTelecom, Charter, SouthernLight, etc) and we only have 1 longhaul route of around ~130 miles. Obviously the metro all spend a little capex for continious build outs, but when customers such as us are signing 3 or 5 year deals with contract values between $30k to $70k, most time the payback is easily under ~12-15 months or less, then there is a lot of profit to be had after that. You can also get a little dominio affect of building out to a customer gets you closer or lets you pass another customer, and so on and so forth.
Whats everyone’s opinion on this?
My perspective summarized in a blog I posted recently. Especially relevant is the section that begins with:
“With robust bandwidth demand curve, increasingly healthy industry structure, and high barrier to entry, Bandwidth Production will prove to be lucrative. However, the path toward this answer is likely to be bouncy. Not all of the potholes have yet been avoided.”
http://bearonbusiness.com/is-bandwidth-production-lucrative
Sidera’s Transcom Route runs Northwest of route 95 connecting Ashburn, VA and NY as a high-performance diverse route from I-95. It has already been done.
http://www.sidera.net/network-solutions/cloud-data-center-connectivity/ashburn-va/
Allied hasn’t done anything yet?
As far as I know, they’ve blown fiber down in Georgia but on this route they’re still waiting for something.