Muni network ownership and the Fourth

Owen DeLong owen at
Wed Jan 30 03:46:06 UTC 2013

On Jan 29, 2013, at 7:03 PM, Leo Bicknell <bicknell at> wrote:

> In a message written on Tue, Jan 29, 2013 at 02:14:46PM -0800, Owen DeLong wrote:
>> The MMR should, IMHO be a colo facility where service providers can
>> lease racks if they choose. The colo should also be operated on a cost
>> recovery basis and should only be open to installation of equipment
>> directly related to providing service to customers reached via the MMR.
> I'm not sure I agree with your point.
> The _muni_ should not run any equipment colo of any kind.  The muni
> MMR should be fiber only, and not even require so much as a generator
> to work.  It should not need to be staffed 24x7, have anything that
> requires PM, etc.

> I fully support the muni MMR being inside of a colocation facility
> run by some other company (Equinix/DLR/CoreSite, whatever) so folks
> can colo "on site".  I think it is also important someone be able
> to set up a colo down the street and just drop in a 1000 strand
> fiber cable to the actual MMR.

There's a problem with this. You've now granted an effective monopoly to
said colo facility and they can engage in uneven and/or egregious pricing
schemes to block competition for local access services in much the way
that the current utility owned HFC and twisted pair infrastructures do.

> Why is this important?  Well, look at one of the failure modes of
> the CO system.  When DSL was in its hayday, CO's would become full,
> and no new DSL providers would be able to get colo space.  Plus the
> CO's could use space/power/hands time/etc as profit centers.
> Muni-fiber should stay as far away from these problems as possible.

Full is full. In reality, no matter what mechanism you choose, this will
be a potential issue, even with the MMR architecture.

However, let's look at the real problems with COs… First, the COs were
run by the incumbent monopoly carrier and said carrier was allowed
to compete for services on the lines, not just manage the lines. Since
the operator in this case isn't allowed to operate services on the lines and
is neutral to all service providers, you don't have this issue. If the colo is
operated on a cost-recovery basis, then it also isn't a "profit center" by

> I think it's also important to consider the spectrum of deployments
> here.  A small town of 1000 homes may have MuniMMRREIT come in and
> build a 5,000 sq foot building with 1,000 of that leased to the
> muni for fiber patch panels, and the other 4,000 sold to ISP's by
> the rack to provide service.  On the other side consider a space
> like New York City, where MuniFiberCo builds out 50,000 square feet
> for fiber racks somewhere, and ISP #1 drops in 10,000 strands from
> 111 8th Ave, and ISP #2 drops in 10,000 strands from 25 Broadway,
> and so on.  In the middle may be a mid-sized town, where the build the
> MMR in a business park, and 3 ISP's erect their own colos, and a colo
> provider builds the fourth a houses a dozen smaller players.

Yes, let's consider these…

Case 1 everything mostly works out OK, but the 4000 feet of colo space
grants a form of monopoly to MuniMMRREIT which basically allows them
to print money on the backs of local consumers. To make matters worse,
nothing prevents them from crawling into bed with "favored" providers and
producing policies, procedures, and costs which inhibit competition against
those favored providers.

Case 2, you move the CO Full problem from the CO to the adjacent
cable vaults. Even with fiber, a 10,000 strand bundle is not small.

It's also a lot more expensive to pull in 10,000 strands from a few
blocks away than it is to drop a router in the building with the MMR
and aggregate those cross-connects into a much smaller number
of fibers leaving the MMR building.

Case 3 actually seems closer to ideal to me, but you're depending on
a lot of things happening exactly the right way in a situation where markets
have proven to be significantly subject to manipulation by incumbents.

More likely, $TELCO buys the business park and…

> In the small town case, MuniMMRREIT may agree to a regulated price
> structure for colo space.  In the New York City case, it would make
> no sense for one colo to try and house all the equipment now and
> forever, and there would actually (on a per strand basis) be very
> minimal cost to pull 10,000 strands down the street.  I'll argue
> that running 10,000 strands (which is as few as 12 860 strand fiber
> cables) a block or two down the street is far less cost than trying
> to shoehorn more colo into an existing building where it is hard
> to add generators/chillers/etc.

In the NY case, it depends. If the colo is a 90+ story building, then it
might well be practical. If you're talking about using existing buildings,
then you might have to get creative. However,  if you're starting
with a vacant lot, then there are lot of possibilities.

> Basically, running fiber a block or two down the street opens up a
> host of cheaper realestate/colo opportunities, and it doesn't cost
> significanly more than running the fiber from one end of a colo to
> another relative to all the other costs.

But what happens when you fill the cable vaults?

If we're talking a block or two, then in high-density areas, this might make sense.

However, most of the US is nowhere near such density and in those cases,
it may make a lot more sense to put whatever would have to be a block or
two away in a high-density area in to the same brand-new building
for a lot less cost and much easier expansion.


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