Zayo's bottomless shopping cart

June 3rd, 2008 by · 1 Comment

Just when you think that Zayo can't possibly keep buying stuff, they go out and buy assets I've never even heard of before (and that does take some doing).  Today they announced the purchase of Northwest Telephone, which apparently owns a network built out of IRUs in the Pacific Northwest connecting places most competitive network operators would never dare tread like Walla Walla and Wenatchee Washington.  So many W's, it makes the head spin.

It seems to me that Zayo is spending alot of resources acquiring regional fiber, the middle child between metro and longhaul that so often gets overlooked.  Onvoy had lots of it, Citynet Wholesale did too, and so did PPL Telcom and Indiana Fiberworks.  The industry pays attention to metro loops in big markets because those tend to hook up the largest companies, and they pay attention to metro loops in smaller markets too because, well, they understand the concept already and a metro loop is a metro loop, right?.  Longhaul routes and Tier 1 cities are the backbone, and of course unignorable, Tier 2 cities add depth and get noticed.  But who really understands the financials of serving the kind of markets that Zayo is focusing on, where you have no metro loops in most markets, just fiber in one side of town and then out the other in a what is neither a giant metro loop nor a small backbone loop?  Seems as if they are rewriting the book on this subject, which might be a very smart thing because the book needs updating.

One has to ask though, what is Zayo's next target?  NTI seems like more of a stepping stone into the Pacific Northwest than anything else.  If I were them I'd be looking to buy what's left of 360Networks - the old Touch America assets which have been showing life lately in the VoIP space but have been in need of a new home since the crash.  Their fiber and conduit goes through Walla Walla and Wenatchee, in fact they share many locations with NTI, I'd venture some of those IRUs of NTI might be on 360Networks fiber?  They also manage to hook all the way back up to Minnesota and Chicago along a northern route, and would make Zayo suddenly a truly national player.  Just a guess... 🙂

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Categories: CLEC · Mergers and Acquisitions · Metro fiber

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  • Dan Caruso says:

    hmmm. 360 Networks? I didn’t realize they were still around. I’ll need to include them in an upcoming Texas Hold’em post. Thanks for suggestion.

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