In a transaction that has been submitted to the Maryland Public Service Commission but which doesn't seem to have made it into the news yet, a national tower company is making a relatively small but very interesting move into the fiber business. Crown Castle has apparently agreed to purchase 24/7 Mid-Atlantic Network.
24/7 Mid-Atlantic operates some 800 route miles of fiber infrastructure across the Maryland, Delaware, and northern Virginia region. 24/7 has been in the hands of Baltimore-based GRI Fund for a little over two years, in which time they've added a few hundred miles of that fiber to the asset base.
This transaction will be, assuming it closes in the next few weeks or months, the first case of a tower company moving directly into the fiber business. Crown Castle's main business is of course leasing space on its towers, but a significant and growing portion of their business comes from DAS/small cell network services. The addition of fiber infrastructure will let them sell backhaul right alongside the tower space of course, but it may also help them further develop their small cell operations as well.
Of course, the obvious followup is whether Crown Castle may have more fiber acquisitions in mind, given their national footprint. If it works in the MidAtlantic, surely the same kind of deal could work elsewhere. There's been a lot of consolidation in the metro and regional fiber space in recent years and the target list is shorter than it used to be, but there are still possibilities. And from there, one wonders if other tower companies are thinking along the same lines.
In another interesting detail, Crown Castle just got a favorable private letter ruling from the IRS confirming it's ability operate its small cell networks as a REIT. Given Windstream's recent move to put its fiber into a REIT, it seems likely that Crown Castle might be planning to do the same with the 24/7 Mid-Atlantic Network fiber assets.