As readers of this blog know, I’ve always preferred service providers that own their fiber rather than lease all their connectivity. Dave Rusin over on Telecom Straight Shooter goes perhaps one step further, referring to himself as a “fiber bigot”. Now there are all sorts of justifications and reasons for our common obsession, but the jargon can get kind of thick and make the eyes glaze over. So here is a simplified and maybe light-hearted way to look at things:
1. Independence from regulation – Leasing from the ILEC is like being at the rodeo and sitting on a bull in the chute. For now he can’t move, but the guy keeping the gate closed likes to play with the button so we don’t forget about him. Owning fiber is like eating steak in the press booth watching the other guy.
2. Limited competition – Did someone just say “fiber glut”? Over there on that route there are piles of it certainly, over here it’s just little ol’ us. Fiber is only a commodity where it is geographically concentrated, everywhere else it is buried treasure.
3. Stickiness – If you are fiber free, you work really hard to keep your clients very happy at all times because they usually have many alternatives. If you supply the fiber to their building, you are the alternative.
4. Service quality – If you own the fiber and something breaks, you fix it. If you don’t own the fiber, someone else will fix it for you. Soon, he says… Soon!
5. Higher margins – When your customers can’t threaten to leave every time they want a better price, you don’t have to live on razor thin profit margins. Unless you want to of course, it is still allowed.
6. Asset Ownership – Fiber in the ground stays in the ground for decades, it can’t get up and walk away when times get tough. If your principle asset is a customer list, its value can change on a much shorter timescale.
7. Bandwidth growth – Of all the ways to satisify the potential explosion in traffic that will eventually come from the next wave of video, telepresence, holograms or whatever, nothing scales like fiber. You can always add more fiber on a route, 10 time, 100 times, whatever. You can’t add more spectrum, physics frowns on that. And if you bury that much copper, metal detectors won’t be able to find pennies anymore, and we can’t have that.
8. Flexibility – A business built on fiber can always move vertically, from dark fiber to transport to IP to managed services and all the way to consumer services. The other direction is much more difficult, like building a pyramid upside down.
9. Coolness – If you are fiber free, you get to spend all your time using and teaching your employees to use one of these:But if you build your own laterals and loops, you sometimes get to play with use one of these:
10. Fame – you might even get to be on the metro fiber and lit buildings update on Telecom Ramblings! And who doesn’t want that?
Got any other reasons to add to the list? Leave a comment below!
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