Dark Fiber

Just one year ago, when the economy was truly down and out, the idea of investing millions - and even billions - in digging up dirt and laying down dark fiber in the name of new networks seemed a bit over the top, premature.

Then, in October -- just as businesses were starting to emerge from recession-related woes -- AT&T (News - Alert) and Verizon announced that plans to spend billions to bring 'fiber to the tower" to support fiber-based Ethernet backhaul transport service for the exploding wireless data usage and their LTE rollouts in 2010. 

Now, it appears Hunter Newby (News - Alert) is having the last laugh.

"No one else was even remotely thinking about doing anything like what we have done," Newby told TMCnet earlier this year. "Most of the people in the investment community considered Allied Fiber (News - Alert) to be 'contrarian' given the financial markets and a false belief that there is "already enough fiber out there for everyone.'"

So, now that the digging has commenced in full, what's next for architect-turned-businessman Newby and his big fiber plans?

The full exchange follows.

TMCnet: In 2009, how you managed to get investment during a down year, and hang on? What made investors interested in dark fiber, and expanding networks?

HN: We managed to get investment based on a proven track record of success in knowing where the market was heading and essentially building the future the right way for the customers. The interest in carrier-neutral dark fiber, colocation and towers is very much demand-driven and we have been able to evidence that demand from the customers with executed agreements which provides a high level of comfort to the investors. If no one wanted our offerings we would not have been able to get signed agreements from the buyers.

TMCnet: You said people 'are catching on to what you are doing.' Why is now the time that people are finally starting to see the value of what Allied Fiber is doing?

HN: Necessity. We were ahead of the market with our physical layer design and concept for solving multiple problems for several customer types and this created two situations. The first was that some people automatically put us in the legacy long haul fiber model category and though it was 2001 again, but of course this is not accurate. The second was that some people that have a backhaul requirement are accustomed to buying services a certain way and we change that a bit since we only lease dark fiber, colocation space and tower space and do not provide lit service. The combination of the three components does not always apply to all buyers and has also never been done before in a system of this type, or size so it took people a little while to begin to understand it. We are finally at the point where those that have a need, or something to gain from our existence are beginning to educate the others, so we do not necessarily have to do it all by ourselves. We still have a lot of educating to do though, but it is getting easier as more understand it.

TMCnet:  You mentioned that AT&T and Verizon (News - Alert) announced that they are spending billions to bring 'fiber to the tower.' How does this pave the way for opportunities? And for whom?

HN: Clearly they are not going to build all of the fiber themselves. They look to transport providers as vendors to do a lot of that for them. We are a dark fiber provider to the transport providers in this instance so it works out very nicely for everyone. The announcements that AT&T, Verizon and others have made regarding the amount of capital they will spend on fiber infrastructure to towers is a strong message in support of new fiber builds that necessarily have to happen in order for their transport needs to be met. This is contrary to the belief that some hold that there is already enough fiber out there today and no new fiber needs to be built. Clearly that is not the case - and AT&T and Verizon are the ones saying so. It is kind of difficult to argue with them and their combined $35 billion budget for wireless backhaul.