This Industry Viewpoint comes from Allied Fiber’s Hunter Newby via Jaymie Scotto & Associates.
Allied Fiber is the company actively deploying a nationwide system that connects subsea cables and communities with its own dark fiber and integrated network-neutral colocation facilities along its route every 60 miles. Allied’s CEO Hunter Newby sat down with Jaymie Scotto Cutaia of JSA after reading the new Wall Street Journal article entitled “Tech Firms Push to Control Web’s Pipes” to give us his take on the coverage.
JSC: This new article illustrates how Internet giants like Google and Facebook are becoming their own global carriers, taking over their own Internet pipes, to reduce costs, improve performance and guarantee enough capacity to support their growing traffic for online video, photos, games, and services. So how did writers Drew Fitzgerald and Spencer E. Ante do with their coverage?
HN: I applaud the accuracy of their coverage, particularly highlighting the reality of the need for and justification of new dark fiber builds for a variety of network operators that all seek control.
JSC: With Allied Fiber’s unique business model, you are both colocation providers as well as dark fiber provider. From this unique perspective, do you agree with the article’s position that the telecom industry is “grappling with the concern that it will be reduced to ‘dumb pipes’—simple conduits for valuable traffic” as these Internet giants turn into their own network operators?
HN: Allied Fiber is in the network real estate business. You can consider our colocation services as allowing us to be a neutral landlord to these network operators, whether they are traditional telecom service providers, or content companies like those mentioned in the article. Additionally, our clients lease or buy our dark fiber that literally connects and enables the security and communications of communities. We are not a ‘construction company’; instead we are enablers of communities, of growing economies, of information and we generate monthly recurring revenue from leasing real estate. We are not concerned about being reduced to a “dumb pipe” landlord. We actually look forward to it. The neutral colocation business has been very good to me and my partners and investors in the past and we are seeing those patterns repeating.
JSC: The article starts off by quoting an unnamed source that Google has spent years piecing together a network of private fiber and now controls more than 100,000 miles of routes around the world. In comparison, Sprint’s US network covers less than 40,000 miles. Does this stat shock you?
HN: Not at all. The network build-outs by these tech giants have been in the works for a long time and for good reason. Owning or leasing dark fiber gives companies better control over their networks offering provisioning, monitoring, security and quality of service advantages, but most importantly control over costs.
JSC: And the tech companies’ investment into pipes couldn’t come at a better time, right? As capacity demands continue to rise an investment in new dark fiber infrastructure will help support their need for more data in their core as well as help to reach new and more remote users, correct?
HN: Yes, most telecom companies are not spending money on building their own new long haul routes as it is a huge upfront expense that cuts immediately from their profits. The web companies like those mentioned in the article have the desire and financial means to invest and, or purchase their own dark fiber and want the certainty that comes from owning their own network.
JSC: So I noticed you said ‘most telecom companies’ are not building….
HN: That’s right. Most but not us. Allied Fiber is actively rolling out a nationwide dark fiber network. We just launched our Florida segment which is a part of our superstructure route we are constructing across America. We believe our integrated dark fiber and neutral colocation infrastructure will serve as a catalyst for economic growth and development throughout the country.