Happy Chinese New Year to those who celebrate it. Two bits of M&A, some dark fiber, and low latency featured in the news lately:
On Friday, MegaPath made an inorganic move in the Rockies by announcing the acquisition of IP5280. The deal adds over 1,000 customers to their rolls across the country, additional hosted voice expertise, and of course two offices and and a bundle employees in Colorado and New Mexico. IP5280’s co-founders, John Scarborough and Jeffry Perl will join the MegaPath team. MegaPath is itself the fusion of the former MegaPath, Covad, and Speakeasy entities, and there will probably be further consolidation in this corner of the industry.
Boston-based private equity firm Riverside Partners has made another investment in telecom and internet infrastructure. Yesterday they completed the purchase a majority equity position in ITC Global, announced late last year. ITC Global specializes in satellite connectivity to maritime and hard-to-reach locations around the world. Riverside also recently put money into New England, powering Tech Valley’s purchase of segTEL.
Out in the Rockies, Zayo is putting more of that longhaul fiber it recently acquired from 360Networks to work. Yesterday they unveiled a deal with EAGLE-Net Alliance for dark fiber, including 511 miles connecting Cheyenne, Wyoming with Branson, Colorado. EAGLE-Net was awarded a $100.6M BTOP grant to hook up some 234 anchor institutions, a piece of which now winds up with Zayo. EAGLE-Net intends to reach 72% of those institutions by August of this year, with the rest the following August.
And Savvis (news, filings) [a subsidiary of CenturyLink (NYSE:CTL, news, filings)] has added ultra-low latency connectivity to Eris Exchange via its NJ3 and CH4 facilities in New Jersey and Chicago. Eris is a futures exchange, with more than $34B in notional value traded since its launch. Savvis has long had a substantial presence in the financial vertical, which CenturyLink is looking to help power its move on the enterprise sector.
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Categories: CLEC · Datacenter · Internet Backbones · Mergers and Acquisitions
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Was that the original intent of ARRA funding? To allow a quasi-governmental entity to team with a private entity to deliver the network they were given the money to build in the first place. Who needs the government agency go-between, with redundant salaries, etc. Or was that the point?
ALL BTOP awards should be reviewed.
Yes, actually. That’s a good thing. Team where you can to reduce unnecessary construction and take advantage of work someone else already did.
$430k per CAI to provide a service that does what? Faster data speeds that are subsidized by the award money? Do govt. agencies have the budget to staff for One-Call locates, maintenance cuts, road moves, etc?
It just seems that the emphasis should have been to incent/mandate/force (you decide) private carriers to provide the service in lieu of government.
If you reply that they have been trying to do that without success, I would cede that point for some areas. The questions would then turn to the cost-benefit for doing it and at $430k per site subsidy plus recurring revenue, I wonder if current providers wouldn’t be happy to oblige.
These networks are required to provide wholesale services to third parties. I am a client on two BTOP funded networks. For example, Zayo could easily obtain a tube of dark fiber along that entire project and expand its services to new areas.
These weren’t built solely to provide service to the CAIs, but to make the infrastructure available for others, using the CAIs to pay for the maintenance. In many areas, a pseudo-government won the award, but farms out all construction, maintenance, management, etc. to third party commercial entities.
I will admit that the program wasn’t perfect and some projects were done that probably shouldn’t have been.