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Tuesday, May 17, 2022

FCC Vote Boosts Plan by DWP to Sell Fiber Service

FCC Vote Boosts Plan by DWP to Sell Fiber Service


Staff Reporter

The Los Angeles Department of Water & Power could be one of the biggest beneficiaries of a recent Federal Communications Commission ruling that dealt a blow to broadband service providers in Los Angeles.

DWP, which recently began selling access to its fiber optic network, is in discussions with several Internet service providers to deliver high-speed connections to local businesses. Residential service could also be in the offing.

The FCC ruling threatens ISPs with expulsion from networks run by from networks run locally by Verizon Communications and SBC Communications, formerly PacBell.

“This ruling will allow those companies that are impacted by the FCC ruling to stay in business and that’s our target market,” said Bruce Hamer, director of DWP’s Fiber Optic Enterprise, a 300-mile network of fiber optic cable that is now wired into approximately 200 office buildings.

DWP has been laying fiber optic cable throughout its service area for the past 12 years. Until recently, it leased the “dark” fiber lines to third parties such as building owners or large companies, which bore responsibility for “lighting” the lines, or making them operational.

More recently, DWP has lit some of the lines itself, and begun selling access to them to ISPs.

The Feb. 20 ruling by a split FCC would allow regional Bell companies to stop sharing their lines with competitors that now sell data services to business and residential customers. It also leaves numerous questions in the hands of state regulators and is likely to face legal challenges.

Mike Jackman, executive director of the California ISP Association, which represents more than 110 Internet service providers, said the decision means that local ISPs leasing copper wires for DSL lines will have to search for a broadband alternative to the monopoly Bell companies.

Like other local utilities, the DWP has been building its own high-speed fiber-optic network throughout its service area. But there is skepticism about how the utilities will deliver the so-called last mile, or whether it can be delivered through wireless technology. The DWP network, for example, hasn’t been able to attract a sizable share of the data services market.

Part of the problem is that fiber optic lines are substantially more powerful than what is necessary for an average business, which purchases DSL service or leases T-1 lines that run on copper wires purchased through the local phone companies or through a reseller.

In the long run, fiber networks are cheaper to operate and maintain. But they’re more expensive to install. As a result, DWP has been appealing to larger customers.

“It’s such a fast connection that it’s almost out of the league of what most people need,” said Tony Cappelli, vice president of L.A. Bridge, an Internet service provider that now uses SBC and Verizon lines. He said the DWP network could be an alternative to the phone companies, although DSL is still less expensive.

DWP is selling its smallest circuits at a wholesale rate of $500 a month. Each can support up to 100 ISP customers, Hamer said. In addition, ISPs would have to bear the expense of a so-called “last mile” connection from the DWP switch to the customer’s premises.

The most efficient way to do that is through a fixed wireless connection that wouldn’t require digging any trenches or climbing telephone poles. But it can also be done using coaxial cable or, for high-demand users, more fiber.

Anticipating growing demand, DWP recently established a 24-hour support center. It also is working on a project that would provide fiber to city departments and agencies by laying the last mile of fiber to hook up libraries and fire departments, Hamer said. The DWP is being reimbursed for these build-outs with funds from the Community Redevelopment Agency and through other grants.

In addition, the utility installed 10 miles of fiber in Watts to wire non-profit agencies, including libraries, schools and medical clinics, that will be running by the end of the year. A fiber cable circuit installed in a building in Little Tokyo will be redeployed to several nearby buildings through wireless connections.

Besides DWP, a potential local winner from the FCC ruling is Allegiance Telecom, one of the largest facilities-based carriers in Los Angeles, with more than 15,000 customers in the area. It has its own networks and doesn’t need Baby Bells’ lines.

Chris Copper, vice president of Allegiance’s Los Angeles branch, said the company is competing successfully against SBC and Verizon by selling integrated access and other T-1 products to small and medium-sized businesses.

Allegiance, based in Dallas, has other competitors in Los Angeles including MPower Communications of Pittsford, N.Y., and XO Communications, of Reston, Va.

Copper said the FCC ruling kept some competition, including those with advanced products or their own networks, intact.

“The idea is that if DWP or any company has the wherewithal to build their own network and create new products, it will increase competition in the market,” said Copper. “When DWP is able to offer their big business tool at a small business prices, we’ll get concerned.”

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