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May 2010 | Volume 2/Number 3
Publisher's Outlook

Allied Fiber Addresses Wireless Backhaul Requirements

By Rich Terhani

As the economy bottomed out more than a year ago, the thought of investing millions of dollars and digging up the ground and laying down dark fiber in the name of new networks seemed frivolous, even premature.

Call it a case of bad timing. The demand was certainly there, but the funds to build simply were not. Fast forward to the fall of 2009: As companies began to pull themselves out of the doldrums, we eventually began hearing of capital outlays being made, particularly investments in fiber to the tower to support fiber-based Ethernet backhaul transport service for the exploding wireless data usage. We also heard about their LTE rollouts in 2010 and the so-called wireless tsunami to come. I recently spoke with Hunter Newby (News - Alert) in our TMC Newsroom. Newby is the CEO of Allied Fiber, a company that is putting a very large amount of dark fiber in the ground, and that is the subject of this issue's cover story.

Newby first had the idea to launch Allied Fiber (News - Alert) in May 2004, but actual implementation started in early 2008. Newby managed to get investments 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. Over the last couple of years, Newby and I have had numerous discussions at shows such as Interop, CTIA (News - Alert), and of course our own ITEXPO. It's phenomenal to see that in just two years major network operators have announced massive amounts of investment in LTE (News - Alert) technology. And those operators are going to need a tremendous amount of fiber.

When we sat down most recently, Newby explained that wireless carriers are in "desperate need" of fiber not only in metro markets but also the places in between. The underpinnings of mobile broadband – LTE and WiMAX (News - Alert) – present a situation on the backhaul side, where you need fiber, and a copper infrastructure will no longer suffice. Allied Fiber is building a new long-haul route that will ultimately lease fiber to service providers that want to bring Ethernet right to the tower.

As Newby explained, we have arrived at a place where those that have a need or something to gain from Allied Fiber's existence are beginning to educate the others. There is still a lot of educating to do, Newby said, but it is getting easier as more understand it and fiber to the tower becomes the buzz phrase of 2010.

As more 4G announcements begin to unfold, it is becoming clear that wireless carriers are not going to build all of the fiber themselves. As such, they look to transport providers to do a lot of that for them. The announcements that AT&T, Verizon (News - Alert) 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 for their transport needs to be met. Fiber to the tower is a big dimension of what Allied Fiber is doing, as it is incremental to the core long-haul business needed in the United States as an upgrade as a result of the 10-year-old-plus legacy systems that are being replaced. Most of the carriers out there today operating networks on leased fiber are finding it challenging to renew current leases, and are looking for new fiber to lease that they can match with the new equipment coming out, particularly the 100gbps wavelengths. That level of transport capacity is required to support things like wireless backhaul. Allied Fiber is currently leasing dark fiber to customers – offering neutral, open, active and vibrant meet points.

As Newby explained, we simply can't get 4G across the country without significantly upgrading the backbone transport systems, and that's going to require new fiber in many places for efficiency and economies of scale.

You can't support new wireless devices like the iPad without the backhaul network. And that bandwidth that they need is a big challenge indeed – from a physical standpoint alone considering the size of the United States. That said, this is an area that has plenty of room for players such as Allied Fiber.

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