October 2009 Vol. 64 No. 10
Editor's Log
Just Say ‘No’ To Utility Poles
It’s no surprise that utilities in new subdivisions typically are placed underground. But what’s really encouraging is that a growing number of cities and states are suggesting or, in some cases, actually stipulating that older lines should be moved underground when feasible.
At the recent FTTH Conference in Houston, various discussions frequently cited the advantage of underground construction. One speaker went so far as to preface his presentation by pointing out that overhead is not necessarily cheaper than underground. “There are just too many variables to nail down general costs,” said Patrick Sims of ADC. Rather, projects have to be considered on a case-by-case basis, he stressed.
Sims also pointed out the case of St. Peter, MN. In 1999, a tornado struck the town and, as so often happens, splintered utility poles netting in loss of utility services for some time. Resolving to not be so vulnerable in the future, the city placed a moratorium on the practice of hanging utility lines on poles, effectively forcing the utilities to rebuild underground. A short while later, the city went so far as to order all utilities to go underground within three years. Granted, St. Peter is a small town, but their actions were trendsetting – and for the right reasons.
Pole costs may also be changing. Federal rules allow cable television and telephone lines to be attached to poles of investor-owned electric utilities. In the early years of cable television systems, cities were very anxious to bring cable into their communities for a litany of business and quality of life reasons. Subsequently, cities often helped to influence sweetheart deals on pole fees for cable systems, often two – three times cheaper than what telephone companies were paying. Now, it looks like federal rules will be changed to uniform fee requirements, most likely rising cable fees to the telephone rates. Just one more factor bringing the perceived “cheaper” costs of overhead more in line with underground.
Obviously, such movement to the underground is good for our market, but the real winner is the rate-paying consumer who no longer has to worry about losing their phone, cable or electricity every time a storm is brewing or an auto accident knocks a poll down.
Stimulus awards – maybe
Nov. 7 is the target date for stimulus rural broadband construction monies to be awarded. However, nobody is holding their breath that this date is set in stone. There have been too many stumbles, negotiations and rewriting of definitions generating numerous delays already. Most expect another delay though indications are that the awards will be released before the end of 2009. That’s keeping on par with most of the other “fast-action” stimulus awards for construction – even shovel-ready projects are taking six months to a year before work actually starts.
Once the rural stimulus projects are awarded, there is a 30 to 60-day contract period. All projects must be 67 percent completed within two years of the award and fully completed within three years of the award. The $7.2 billion being spent on rural or under served areas (I recently saw how those two terms are defined within the stimulus program – very bureaucratically complicated), spread over three years will probably make only a moderate impact on the underground telecom, electric and cable construction markets. However, the projects will finally work toward achieving the elusive goal of bringing broadband to rural areas. Major carriers are in no hurry to serve those markets – in fact, most didn’t bother submitting stimulus proposals. Their business plans are still focused on high density areas.
Another FTTH Conference speaker from an independent carrier said that they expect to bring their home connection rates down to less than $900 in the near future. That’s a far cry from traditional cost-thinking of $2,000.
I know there are many cost factors and strategies involved when it comes to deploying fiber to the premises. But when the price starts dropping below $1,000, it makes one wonder why major carriers don’t finally bite the financial bullet and implement a comprehensive roll-out of fiber to mass consumer market, rather than using transition technology or cherry-picking areas to connect with fiber. The time is right: consumers’ digital appetites are ravenous, the economy is gaining steam and fiber capabilities are growing at almost geometric rates. What’s the hold-up?
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