Connect with us

Open Access

CEO Greg Mesch Recounts How CityFibre, UK’s Third Major Telecom Provider, Grew With Wholesale Network

Published

on

September 22, 2020 — Open access and wholesale networks have been slow in coming to the United States. Yet in the United Kingdom a network utilizing a wholesale model, CityFibre Networks, is taking the country by storm.

CityFibre, led by CEO Greg Mesch, is simultaneously improving internet reliability and accessibility for users, while simultaneously allowing existing internet service providers to extend their reach. With £4 billion in investment, it is building fiber networks to eight million premises, or 30 percent of the UK market.

Fiber buildouts in the United Kingdom were lagging

UK’s fiber coverage ranked 35th in the world in 2010UK. The country’s advanced broadband market was dominated by two major players: British Telecom’s Openreach and Virgin Mobile.

Consumers had limited options, poor service, and high prices.

“When the opportunity to build a fiber network arose, we decided that instead of building it vertically-integrated, we would do it all open-access, or all wholesale,” Mesch said during the Digital Infrastructure Investment event at the Broadband Communities Summit.

“Why put a fiber network in that’s just only used by one ISP,” he questioned. He called for operators to “open it up to everyone” and attempt to “attract all ISPs to the network.”

CityFibre is nowhere near Mesch’s first fiber endeavor, as he worked with a variety of fiber and other telecom ventures in Europe before founding the UK company.

While CityFibre designs, builds, operates and owns the network, it allows existing internet service providers to operate on the platform, making no effort to compete with them.

In order to break ground on the project, Mesch raised £1.6 billion and completed multiple fiber acquisitions.

Vodafone and Goldman Sachs partners join in with CityFibre

CityFibre’s last-mile deployments began in late 2018, supported by Vodafone, a UK-based internet service provider and a substantial investment from individuals associated with Goldman Sachs.

Since the latter end of 2019, the broadband provider has embarked on aggressive plans to roll fiber out across the UK, seeing itself as the leading independent supplier of fiber networks after BT and Virgin Mobile.

The networks initial two-phase plan was to spend £2.5bn to deploy a 1 Gigabit per second (Gbps) fiber-to-the-home network to 20 percent of the current UK broadband market.

Phase One aimed to extend the network to a minimum of one million homes and businesses across 12 cities by the end of 2021. Phase Two promised to reach 5 million premises in 37 cities by 2025.

Current construction plans for CityFibre

Mesch updated Digital Infrastructure Investment attendees on CityFibre’s current construction plans: Above and beyond the prior Phase Two goal, the company is aiming to utilize a £4 billion investment to extend their fiber network to 8 million premises, 30 percent of the UK market.

Mesch detailed critical steps the company made in deploying the full fiber network and what it took to attract existing service providers to use the system. He said CityFibre had been able to attract some of the UK’s best-known telecom brands as clients.

To get its start, the company developed a strategic partnership with the biggest mobile operator in the UK in 2017, Vodafone. The company then moved to acquire TalkTalk, another fiber operator, which it bought from FiberNation. With the purchase, the company nearly double in size, effectively becoming the UK’s third largest national digital infrastructure platform.

Mesch said that key to attracting incumbent providers to use the network was providing 1 Gbps speeds and pricing the product less than existing operators.

In an attempt to advise up-and-coming entrepreneurs, Mesch said it is crucial to “aggregate demand across cities” and then build a wholesale, open unit.

“Once you have scale, incumbent providers will use you,” he detailed.

From publicly-traded to privately-held company

Attorney and Broadband Breakfast Editor and Publisher Drew Clark asked Mesch whether he preferred operating under a publicly-traded or a privately-traded company model. Mesch replied with a laugh, saying he loved both models and hated both models.

Ultimately, Mesch said that he personally believes “the best place for fiber ownership is in private hands.”

While CityFibre was initially a public company, it moved to become classified as a private infrastructure class ownership structure in 2018.

“We think it’s a perfect time to shift from public ownership and public scrutiny to private long-term patient capital while we go through this mass period of construction,” Mesch said in a 2018 interview with Reuters.

In order to amass scale, it is crucial that fiber assets remain in private hands, urging that while “one city isn’t scale, 50 cities is,” he said.

“It’s much easier for a big operator to consume from us,” than from cities, Mesch argued, claiming it is impossible for incumbents “to deal with 25 or 50 different municipalities.”

“We’re building across 100 cities in the UK,” said Mesch, and “being in private hands allows for the standardization of access rules and terms of service and is altogether easier to finance.”

“All pension funds have started to classify fiber as an investible asset,” he noted, “therefore, if you’re a pure fiber asset you’re deemed investible by an infrastructure fund,” while municipalities are not.

Mesch concluded saying “it behooves a city to help a private company build, but I don’t think a city should do it on their own.”

The United Kingdom’s push for full fiber buildout by 2025

Stakeholders in the UK are on the same page when it comes to the importance of deploying an accessible fiber network to all.

Last election, both the Labor Party and the Conservative Party, the two dominant parties in the country, campaigned on plans to deploy “full fiber” networks across the UK, within 5 years.

Mesch said that Britain’s need for a world-class digital infrastructure has never been greater, which is why he stands firmly behind the government’s plan for nationwide coverage by 2025.

“Essential to making an economy work and compete across the world today, is a world class infrastructure. Full fiber will play a critical role in levelling-up the UK and so today we are accelerating our plans to bring full fiber to more towns and cities, even faster,” he said.

The government and the people’s push for an accessible, reliable nationwide fiber network has benefited the company enormously. “The government is attracted to the model, which allows us to build at scale” with limited obstructions, said Mesch.

Mesch reported that when planning the network, the company uses a city-centric model, which accounts for public sector buildings, businesses, 5G, and consumers.

CityFibre believes that, underpinned by a full fiber infrastructure platform, these towns and cities will spur economic growth, helping to further develop the UK and make the country more competitive as a whole.

Can the wholesale model work in the U.S.?

During the event, Mesch mentioned that he would love to see what a wholesale model could do to expand fiber throughout the United States.

“I think a city fiber model could work in every city across the U.S.” said Mesch, although he noted the scale of the project would be “huge to do.”

While there is talk of what a CityFibre model could do across the U.S., how the model would operate over such a vast market remains unknown.

In an attempt to advise anyone interested in taking a stab at the pitched project, Mesch said “the first move would be to consolidate all wholesale, open access providers across the U.S., city-by-city,” noting that “as soon as you get scale, the bigger providers will use you.”

Displaying his interest in potentially trying to replicate Mesch’s model across the U.S., Ben Bawtree-Jobson, CEO of SiFi Networks, a North American open-access operator, joined to comment and ask questions of Mesch.

Bawtree-Jobson asked Mesch what the biggest obstacles were in constructing CityFibre Networks.

Mesch replied saying “today it’s the construction, but five years ago is was getting people to believe the model.”

Visit Digital Infrastructure Investment for complete information and summaries of the sessions from the Broadband Breakfast mini-conference, which is being re-broadcast at Broadband Communities Virtual Summit.

Former Assistant Editor Jericho Casper graduated from the University of Virginia studying media policy. She grew up in Newport News in an area heavily impacted by the digital divide. She has a passion for universal access and a vendetta against anyone who stands in the way of her getting better broadband. She is now Associate Broadband Researcher at the Institute for Local Self Reliance's Community Broadband Network Initiative.

Open Access

UTOPIA’s Projects Proceeding in California and Montana, CEO Says

Both the GSCA and Yellowstone Fiber are using UTOPIA’s techniques to provide open access broadband over fiber.

Published

on

Barbara Hayes (left) and Roger Timmerman (right) speaking at Broadband Communities Summit 2022 on May 4

HOUSTON, May 4, 2022 — UTOPIA Fiber’s open access model has found success in California, Montana, and Idaho as it continues to deploy across Utah, the company’s CEO said Wednesday.

“Right now, we are working with [Golden State Connect Authority] to identify various pilot areas for the project and have started preliminary engineering work to determine the initial project area,” Roger Timmerman said at the Broadband Communities Summit 2022.

During the press conference, Timmerman also pointed to UTOPIA’s expansion into Santa Clara, Utah, and its completion of its original 11 Utah cities by the end of 2022.

Timmerman was joined by partners Barbara Hayes of the Golden State Authority and Yellowstone Fiber CEO Greg Metzger as they delivered remarks on their joint ventures. The partnership will create the largest publicly owned fiber network in the US, and as it stands now, would span 38 of California’s 58 counties.

“California may be the world’s fifth-largest economy, but our state’s connectivity is decades behind,” Hayes said. “Investing in open access fiber will be transformative for California.”

Both Metzger and Hayes emphasized that their decision to partner with UTOPIA was largely informed by the company’s track record.

“We needed to have a partner who was successful and had done it before,” Metzger said. “For Montana, this is going to be a breath of fresh air.”

Yellowstone Fiber, formerly known as Bozeman Fiber, is a not-for-profit that will replicate UTOPIA’s open access model to provide broadband to the greater Bozeman region; it will own and operate the fiber but will rely on UTOPIA for assistance on the backend.

UTOPIA’s model of open access has long been a point of interest in the telecom industry. While some claim it will be a solution to the digital divide, other assert that it has merely created a “race to the bottom” where internet service providers are constantly pushed to undercut their completion. Timmerman and others have pushed back against the “race to the bottom” assertion, claiming that providers can find ways other than price to distinguish themselves from their competition, such as superior customer service. Additionally, they point to their recent track record as evidence that critics’ concerns that they can maintain a positive cash flow are unfounded.

Though UTOPIA, a sponsor of Broadband Breakfast, now has positive revenue and has served as a model for open access projects around the country, critics still point toward its more than $300 million in outstanding debt it accrued in its early days, before Timmerman was at the helm.

Continue Reading

Open Access

‘Worst Broadband City’ Brownsville Approves Open Access Fiber Project with Lit Communities

Lit Communities will operate the network, with subsidiary BTX Fiber as the last-mile provider. HMI Utilities is prime contractor.

Published

on

Photo of Elizabeth Walker and Andres Carvallo at the city council meeting.

BROWNSVILLE, Texas, April 1, 2022 — During a special city commission meeting on Wednesday, council members voted to approve a fiber project that will bring high-speed broadband to 100% of its citizens.

Elizabeth Walker, Brownsville assistant city manager, and Andres Carvallo, CEO and founder of CMG Consulting LLC, recommended that the council authorize two respondents, HMI Utilities with Lit Communities, for a combined proposal to maximize technical and financial capacity.

Brownsville, Texas, is a city of more than 182,000 people and is one of the cities with some have called the worst broadband city in the country.  The National Digital Inclusion Alliance in 2018 listed Brownsville and a neighboring community as one of the top two worst connected cities in the country with a population of more than 65,000. For Brownsville, 47.1% of households do not have broadband of any type, NDIA found

Lit Communities, a fiber-builder that partners with municipal, county and other government entities, will operate the network, with HMI Utilities as the prime contractor. Lit Communities subsidiary BTX Fiber will be the last-mile provider on the network. However, the project will be an open network with multiple internet service providers.

Standard service on the network will be at least 100 Megabits per second (Mbps) symmetrical.

The research for this project began nearly a year ago in April 2021 when Walker and Carvallo looked at different business models, like public policy only, public services, open access, infrastructure, municipal retail (business only and residential). They looked at these models in similar projects in Texas and across the country, including in places like Knoxville and Santa Cruz County. Eventually, they decided on an open access model.

Specifics of the Brownsville network

All citizens will have access to this broadband. “It is eight middle-mile fiber rings to address the full geography of Brownsville,” said Walker.

The city will own 100% of the middle mile and will be able to license it out in private-public partnerships to create revenue, as well as revenue from the last mile connectivity. To ensure affordability, there will be a cap on what providers can charge.

Affordability “is very important,” said Walker. “The crux of the consideration is just to not deliver access, but to make it affordable.”

This infrastructure will have a life expectancy of 50 to 100 years, said Walker.

Walker said that “evidence suggests that broadband services have a net positive economic and social impact to communities by enhancing key functions such as economic competitiveness, workforce development, training, educational capabilities, municipal operations, and smart city developments.”

This is part of the private-public partnership model of Lit Communities. The company recently partnered with Ohio’s Lorain-Medina Rural Electric Cooperative to install fiber on existing utility poles. In these projects, the municipality in question provides the capital necessary to build a middle mile or backbone network.

“We are not stopping with these initial groups of towns that we are looking at and working into right now,” said Rene Gonzalez, Lit Communities’ chief strategy officer. “It is just the beginning.”

Continue Reading

Open Access

Construction of Yelllowstone Fiber Network in Montana Begins Ahead of Schedule

The project will be Montana’s first open-access fiber-to-the-home network.

Published

on

Photo of Bozeman, Mont., from January 2011 by Mike Cline used with permission

WASHINGTON, March 24, 2022 ­– Montana fiber provider Yellowstone Fiber announced Wednesday that construction has begun on a $65-million network based in Bozeman, well ahead of anticipated pace.

The network, operated in partnership with large Utah-based open-access network UTOPIA Fiber (a sponsor of Broadband Breakfast), will be Montana’s first high-speed all-fiber internet network as well as its first open-access fiber-to-the-home network.

The start of construction for the privately-funded network comes only six months after initial announcement of the project.

Not only will the network connect every address in Bozeman, but it will also extend “deep into Gallatin County,” according to the developer.

Businesses are expected to receive speeds of up to 100 Gigabits per second and residential properties will experience up to 10 Gbps to create what the city of Bozeman has called “the first true gigabit city in the state of Montana.” Pricing plans are expected to be announced this spring.

The first six internet service providers to provide services on the network will be Blackfoot, Global Net, Hoplite Industries, Skynet, Tri-County Telephone Associates, and XMission.

Montana is one of the least-connected states in the U.S. About a third of residents in Gallatin County, in which Bozeman is a city, lacks internet access.

Continue Reading

Recent

Signup for Broadband Breakfast

Get twice-weekly Breakfast Media news alerts.
* = required field

Trending