Allied Fiber Splashes into the Fiber Pool

May 24th, 2010 by · 14 Comments

For much of this year, a new company called Allied Fiber has been making waves in the bandwidth sector, promising to do what many have said couldn’t or shouldn’t be done:  build new longhaul dark fiber routes in the USA.  Today Allied Fiber has gone public with its plans, with the first phase already under construction between New York, Chicago and Washington DC (Ashburn).  Here are a few quick highlights and a route map of the NY-Chicago leg:

  • Route: 1300 miles, primarily along railroad rights of way, including Norfolk-Southern
  • Cost: $140M for phase 1.
  • Conduits: Multiple
  • Fiber Count: 432 longhaul, plus 216 short-haul for frequent on-ramps
  • Fiber: a composite of SMF and NZDSF fibers
  • Colocation: huts and larger facilities every 60 miles
  • Towers: 300 of them on-net along the way

The business model is very simple and yet to some, outrageous: sell longhaul dark fiber to wholesale customers and the colo space to operate it with.  It’s been 10 years since I’ve seen anyone suggest that wholesale longhaul dark fiber was a great idea.  What has changed?  Obviously, Allied Fiber is banking on a sustained surge in raw bandwidth demand.  But they also have had a bit of luck in terms of timing.

This new build has spawned various rumors in the low latency crowd about a new blazingly fast NY-Chicago route.  I had a brief chat with CEO Hunter Newby a few weeks ago.  While he confirmed that the route will be shorter than other modern routes between the two cities, he reminded me that Allied Fiber itself won’t play in the low latency market.  They intend to sell dark fiber, and the actual latency on the route depends on what its customers do with that fiber in terms of equipment, etc.  That said, the demand from customers interested in low latency has surely been helpful in the early stages of funding this buildout.

And that brings me to the number 432, which is more than four times as many fiber strands as the entire original longhaul builds of either Level 3 or Qwest.  Sheesh, that’s a lot of fiber.  At 80x100G, it would carry a theoretical maximum capacity of over 3.4 Petabits per second, which means this network is built for the long term.  Even Level 3 and Qwest have barely touched their fiber reserves thus far.

Where to after the heavily trafficked between NY/Chi/DC?  The plan overall is for some 11,548 route miles and 6 rings going coast to coast, but first things first.  Phase 2 is from Ashburn down to Atlanta and then to Miami.  But it will apparently be on a less traveled road, following the Appalachians down through Tennessee and not the Carolinas.

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Categories: Fiber optic cable · Internet Backbones

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14 Comments So Far

  • carlk says:

    They sure do make this sound easy, especially the ROW issues tied to just jumping along side of someone else’s railroad tracks. Will they immediately be brought into the property rights lawsuits surrounding imminent domain, or has some railroad baron already blessed them to be exempt from liability unlike the rest of the telecoms who preceded them while passing through and around America’s heartland?

    If $140M is not a low number for final construction costs, I guess for starters-excluding the electronics portion while somehow factoring for the four times fiber capacity you allude to-that would value (3)’s 54K intercity mile routes at $5.8B by itself.

    This sure doesn’t sound like the version of Level 4 that Crowe has concerned himself with from DAY 1, since there is no new technology other than the fiber capacity, a capacity one would think (3) could sink anytime that it wanted to, assuming it wanted to.

    Why must there always be some “NEWBY” that comes along thinking he or she can do things better? 🙂

    • carlk says:

      In the spirit of the verbose, intelligent life force, Mr. Frank Coluccio on this board, I believe I meant “eminent domain” which notwithstanding Mr. Rusin’s N/S explanation for skirting ROW liability, I see long E/W runs on their five phase completed construction plans.

      Why shouldn’t they be sued again?

      • carlk says:

        The author of this article mistakenly calls Sprint and 3 plaintiffs versus the defendants that they are, but you’ll get the point. Of course, this type of litigation is not new to those companies. What has always struck me funny is the fact that, legal liability in my mind should rest more on the railroads than the telecom companies who they’ve entered into contract withs.

        I don’t see Mr. Rusin’s Allied Fiber being mentioned in a lawsuit like this yet. If I were one looking to DISRUPT their shady plans, I’d sue link with property owners where they’re attempting to use ROW’s and sue their a**** right now! Kill the baby in its CRIB. imo

        Sprint Communications Co. of Overland Park, Kan., and Level 3 Communications of Broomfield, Colo., are named as plaintiffs. The companies didn’t respond to requests for comment.

  • Dave Rusin says:

    Most previous long haul builds were on rights-of-way of railroads going east and west. Hunter is running North to South.

    Moreover, he is at an advantage understanding the meaning of perfected rights-of-way versus back in the land grab days. Lots of dumb money when into long haul back in the day.

    He also has major carriers behind Allied in this effort due to the behavior of the existing long haul players on access, service, diversity,and reliability.

  • Frank A. Coluccio says:

    The BTOP proposal executive summary (hat tip: Stephen R.) sheds more light on the subject:

  • carlk says:

    That’s interesting Dave, except I’m a stupid man who reads that map more EAST to WEST and visa versa than the other way around. Of course, I’m sure there is some N and S in between, as there has to be E and W as well (end to end points).

    What is also interesting to me is the spacing of the regeneration huts which match (3)’s spacing at 60 miles.

    Again, I’m just a stupid lay man on your telecom board less anonymous than Mr. “anonymous,” but I can’t stop thinking (3) is less of a competitor notwithstanding the article, especially while considering their more cautious and limited approach to “rural” markets, and their ultimate goal to free up those bottlenecks by last mile titans onto their long BACKBONE instead.

    This is no Level 4!!!!!!!!!!!!!!!!! IMO

  • Anonymous says:

    Timing is not on Hunter’s side, a new company is building a more direct route between NYC and CHI and will be done in Q3. The route will provide dark fiber only and will be several ms faster than Hunter’s.

  • Anonymous says:

    432 count or 864 count is often pulled when you have access to the conduit to yourself, especially today

  • T says:

    This is just what the strugglig wholesale providers in the country need. First the US government creates competition funded by taxpayers…and now everything they have is becoming commoditized…how can the Level 3’s Of the world survive??? These routes as low latency routes are quite lucrative today and the financial sector’s demand and short committments are demanding investment with short term reward…this is like XO aggressive industry pricing. Some companies really do cause major disruption…I’m not sure the industry can handle these blows.

  • The_highwayman says:

    I also like how they are doing the sales…’s from the midstream pipeline operator playbook like Kinder Morgan, who do not produce the gas/petro they lease capacity on their piplines for the producers…

    1) announce you are building a new pipline( a new network)

    2) secure funding and start construction

    3) start taking shipper commitments/new bandwidith orders now and fill the tubes with natgas/turn fiber pairs over when the new pipeline/network is completed

    what a refreshing change with Allied…and instead of GOOGling and pontificating like GOOG has….Allied is actually doing something about it…and going to deliver….

    This is going to be a very interesting and fun build to watch…

    Welecom to Level(4)!?!?

  • carlk says:

    You don’t seem to be too sure of Level 4. That’s not like you, or is it? Where’s the technology replacing FIBER as the transportation means?

    However, you do a fine job explaining a flawed business model more than ten years old now, that being, “build it and they will come.”

    It can’t be a bad thing for driving new, untapped traffic in the most rural areas of this nation that have been ignored, however.

    It seems to me that T and VZ will suffer the most with this “NEWBY” arriving on the scene. IMO

  • mhammett says:

    Companies like this are great for smaller, independent providers. Level3 will not sell Bob’s ISP dark fiber from South Bend or Fort Wayne into 350 Cermak. Allied will. There is a lot of growth potential feeding the smaller, independent ISPs with fiber from non-traditional means.

    I view working with most any national provider no differently than AT&T or Verizon. No one wants to provide the little guys with the raw fiber the need at the cost of cannibalizing transport or transit services.

  • Frank A. Coluccio says:

    The group usually holds fast to its self-preservation rules until a spoiler like this outfit comes along and ruins everything. And that’s just a bit of the too bad, IMO. It’s a generational thing. I can still recall the weeping of one Big-Three (remember that term?) sales rep during the nineties when (3) was undercutting on routes between NY and Dallas by some sixty percent, along with the other fiber barons of the era who collectively instigated a “step function” in the pricing schedule. If Allied and its ilk are successful (there are others, albeit mostly regional in nature), one might look forward to a Step Function 2.

  • Dave Rusin says:

    Allied has customers … otherwise there would be no funding … International customers ….

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