Monday, March 01, 2004

Don't like using the phone company for your high-speed data network?

Then just build your own fiber network. According to this article on, that's exactly what a school district in Georgia did. For out-of-pocket costs of about $2.5 million, the school district installed their own 10 gigabit per second fiber network. An when I say they "installed" it, they really did install it -- a few teachers were taught how to splice fiber, they designed their own switching and routing, apparently the only thing they outsourced was the actually stringing of the fiber along telephone polls. Annual savings for the district, according to the article, is about $320,000, meaning that they will recoup their sunk costs in less than 10 years. The additional upside, however, to having their own network is that there is too much capacity for just a school district to use, so the district is looking at selling excess capacity, which has the local providers extremely mad.

Building your own high-speed network is a new phenomenon that seems to be catching on. According to the article, even the city of Washington DC is looking at building their own fiber network to not only connect to the Internet, but also to connect all city buildings. In the case of Washington DC, the city has contracted with MCI to manage the network, which seems like a pretty good model. Although the local phone companies may get cut out of the monthly revenues from leased lines, they can still compete for management contracts. While on the surface it would seem that local providers would be happy about not having to invest in the infrastructure, the problem is that they have all spent tons of money on infrastructure that they now need to lease to recoup their investment costs and/or continue to make money.

Could this new drive of installing personal fiber networks create a new industry? Absolutely! Imagine companies that exist for the sole purpose of managing private fiber networks. If it was me, I would provide free consulting services on building the network in exchange for a long-term management contract.

Will this drive cause heartburn for the local providers? You bet. The article talks about the myriad ways that the phone companies are trying to introduce legislation to halt the growth of private networks.

Should be interesting to watch.

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