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ILVER SPRING, Md. — The founder of a two-year-old company near the nation’s capital says he’s discovered a way to solve the so-called “last mile” barrier to fiber optic connectivity. The solution, he says, is to get down and dirty.
Using a device called a SAM — sewer access module — CityNet Telecommunications Inc. deploys last-mile fiber optic networks through a city’s sewer system. CityNet installs these fiber networks and then leases them wholesale to telecommunications firms, Internet companies and other network service providers, including companies that provide high-speed communications services to end-user tenants.
Because CityNet deploys its last-mile networks through existing infrastructure under ground, it is able to connect buildings to broadband networks in a non-invasive, non-intrusive manner. Best of all, the company’s founder says, a robot does the dirty work so that humans don’t have to.
“In any city, you are facing an asphalt jungle,” says Bob Berger, CEO of Silver Spring, Md.-based CityNet. “There are physical constraints to installing fiber because you have to rip up city streets. And even if you do that, you still can’t lay fiber under ground to every single building. The answer has always been to find a clear pathway that already exists and that is common to virtually every city and community in the world — a pathway that takes you directly to every building. The only clear pathway as a literal physical matter is the water and sewer system.”
Since most sewer lines are too small for people, CityNet deploys a 2-foot-long, 6-inch-wide, 141-pound robot to clear the way and lay down the fiber directly to buildings. Using a digital camera, the robot examines and maps the city’s sewer system. Rings made of titanium steel alloy are then installed flush against the sewer walls. Specially designed tubes, or conduit, are pushed into clips attached to these rings. The final step comes when fiber optic cable is threaded through the conduit.
It sounds simple, but it’s big business. Since April 2000, CityNet has raised a total of US$375 million in equity and debt funding. Its strategic partners include Ka-Te System AG, Alcatel, CableRunner North America LLC and Carter & Burgess.
CityNet’s business model calls for the company to share 2.5 percent of revenues with cities that sign licensing agreements with the firm. In the case of Omaha, Neb. — the first city in America to sign an agreement with CityNet — the deal could provide as much as $1 million a year in revenue to the city.
“We have signed seven cities — six in the U.S. and one in Europe,” says Berger. “They are Indianapolis (Ind.), Albuquerque (N.M.), Omaha, St. Paul (Minn.), Fort Worth (Texas), Scottsdale (Ariz.) and Vienna, Austria. In addition, we are in last-stage negotiations with another 20 cities and are talking to another dozen cities beyond that. The deals we expect to close in the third quarter will be among the larger markets in the U.S.”
SAM the robot first went to work beneath the streets of Omaha on May 4. But it’s not as easy as it sounds. Human beings must be taught how to guide little SAM. That’s why the company opened the In-Sewer Broadband Deployment Training Center in Boca Raton, Fla. At the center, CityNet trains employees how to use the robots without getting them stuck in the muck.
Berger says that once the fiber is placed under ground in the sewers, it will have a functional lifespan of about 25 years. The conduits and mounting rings should last 30 to 40 years. “Our agreements are a series of short agreements,” he says. “We lease the fiber on a 20-year basis, because we project a business-useful life of 20 years.”
Berger says that constructing last-mile networks is critical if municipalities want to remain competitive in the digital age. “Companies like Metromedia build the fiber rings around the city, but those rings rarely if ever touch the buildings,” he says. “Rather, the buildings are forced to connect to nodes at aggregation points such as data co-location centers and telecom hotels. Meanwhile, the building local exchange carriers have been fibering up buildings internally. What’s literally missing everywhere in the world is the middle road that connects the fiber inside the buildings with the fiber rings and aggregation nodes.”
For corporate real estate managers, the connectivity made possible by SAM can be a lifesaver, Berger notes. “Whether you’re making automobiles or Coca-Cola, broadband capability is critical to your competitiveness,” he says. “And for real estate owners and building managers, it enables them to offer something of value to their tenants. There has been an explosive realization that, to the extent you can have a neutral fiber optic platform for your entire building, it provides a huge upgrade to everyone in your facility.”
For more details on CityNet, go to www.citynettelecom.com.
