- The business case for building rural fiber, especially middle mile, isn’t great
- 10-15% of the cost to deploy fiber-to-the-home needs to go towards the middle mile, according to Zayo
- It can also be costly for last-mile providers to access middle mile infrastructure
The federal government has set aside $42 billion to connect last-mile communities and just under $1 billion for the middle mile networks that will provide the backbone to reach those unserved homes. But that’s not enough money to cover the cost of building middle mile infrastructure, panelists noted last week at Broadband Nation Expo.
There’s only so much middle-mile funding to go around, said Nate Walowitz, regional broadband program director at the Northwest Colorado Council of Governments. The business case for building rural fiber, especially middle mile, “is not fantastic.” The problem is that in order for last-mile deployments to be successful, you need that reliable middle-mile backbone plus the additional circuits and fiber paths that come with it, he added.
Regional governments could lend a helping hand in making the middle-mile more affordable, he went on to say. Say two companies want to build a middle-mile network in the same region, “why can’t they work together?”
“We can get double the number of paths for that cost and we get everybody into the same trench,” Walowitz said.
That way, these middle-mile providers “each have a fair shot” and can gain access to each of the markets on the network’s path, thus being able to connect more unserved folks.
The cost of a middle-mile network impacts not only the service providers building that backbone but also the end-users, according to Laurel Leverrier, assistant administrator of the USDA’s Rural Utilities Service and Telecommunications Programs.
“I don’t think there’s so much understanding, at least in government [that] it is so interconnected. Not just with the cost of the initial build for a last-mile provider, but those ongoing costs that they have for access to that middle mile,” she said. “And that has a direct impact in that affordability piece for the end user.”
Joel Daly, SVP of government affairs and product strategy at Zayo, noted 85% of the fiber-to-the-home implementation cost goes to connecting homes, leaving around 10-15% that needs to be allocated for the middle-mile.
Zayo’s been working with states like Nevada to build statewide middle-mile networks. The states want to make sure they’re not wasting money as each individual provider signed onto the network tries to “figure out their own middle-mile solution.”
People are nervous about running out of budget for middle-mile, Daly said. For Zayo’s part, it’s encouraged revenue shares between public and private entities so that if they want to expand their networks, they don’t have to “move further budget” to do it.
Accessing the middle mile is another hassle that can ramp up the deployment cost, Walowitz noted. In some of Colorado’s more rural communities, there’s middle mile that exists but is privately owned.
It’s one thing for the incumbent provider who owns that middle mile to say, “yeah sure, we can sell you a circuit” on a monthly basis. It’s another to lease dark fiber to a network that “really needs [it] to provide for the needs of capacity now and in the future,” he concluded.
