This page will discuss in detail how to buy dark fiber. Specifically, fiber optic cable to enable high speed broadband to your school location.
Lets imagine your local telecommunications provider is building a fiber network in your community, and they are building fiber right outside your school premises. You decide that you want to buy fiber from your local telecommunications provider. Where do you start?
The first question is where does the fiber that is near your school location go to? What is the fiber path? This will be answered by a call to the telecom provider. You should ask what is the path of the fiber and if they are willing to sell you dark fiber. Dark fiber means you will purchase fiber strands that are not yet lit via optronics (a short hand for a device combining both optical technology and electronics). A good method to receive the fiber path is a ‘google earth file’ or sometimes called ‘kml’ file or ‘kmz’ file. Kml and kmz are the file types for google earth. Google earth is a great tool that you should download if you haven’t already done so. With google earth, you can create a path that represents the fiber optic path. So, if the telecom provider has already created a google earth file of their fiber path they may be willing to email that to you. Or, they may require you to sign a Non Disclosure Agreement (NDA) where you agree to keep the fiber path confidential before they send you the fiber path.
Now, lets assume you have received the fiber path and you see that it goes next to the middle school from the high school, where you are located. Lets assume for both the middle school and high school, the fiber runs along the side walk right outside the school entrance.
You think Great ! I would like to connect the middle school and high school via a fiber connection. So now you call back the telecom provider and tell them you’re interested in buying a fiber connection from the high school to the middle school. The next question to the provider will be where you can access the fiber. You would typically access the fiber via a hand hole or man hole you see in the side walk. The telecom provider, when they constructed the network would have placed hand holes or man holes periodically along the fiber path. For example every mile and at major intersections. They may also have been kind enough to place a hand hole outside a school anticipating connecting the school at a later date. A man hole or hand hole is an enclosure under the side walk that contains a loop of fiber, typically about fifty to a hundred feet of fiber cable. A man hole is the same as a hand hole just with a larger enclosure.
So lets say, in discussion with the telecom provider, you have established that there is a hand hole outside your high school and also a hand hole outside the middle school. You now ask the telecom provider for a quote for the fiber between the two hand holes. The telecom provider will then ask how many strands would you like. You would say 2 strands. (Or 1 strand based on the telecom equipment). When you purchase 2 strands, you will use one strand for the transmit path and another strand for the receive path. Most telecom equipment require you to have a transmit port and a separate receive port. There is some telecom equipment that will work with just one fiber strand, this equipment places the transmit path and receive path on the same fiber strand. For short distances, it may be more cost effective to purchase one strand versus two.
Anyway, lets assume you do what most fiber buyers do, and you request two strands. Therefore, you ask the telecom provider for a quote to purchase 2 fiber strands from the hand hole outside the high school to the hand hole outside the middle school. The telecom provider may then ask you a question, “Do you want to buy the fiber on a monthly lease basis or on a longer term IRU basis?” This is a key question and we’re going to spend some time on this question.
Fiber Indefeasible Right of Use (IRU)
If you’ve researched dark fiber or spoken with people regarding dark fiber and purchasing dark fiber, you may have heard the term IRU. IRU means Indefeasible Right of Use. IRU refers to a type of contract that gives the buyer a strong form of ownership, stronger than a lease. When fiber is bought via an IRU agreement, it is commonly bought for a period of 20 years. You would pay the telecom provider a one time payment at the start of the twenty years, then you have the right to use the fiber optic strands for twenty years. The other typical payment would be a yearly maintenance payment. This is where you pay the telecom provider to maintain the fiber optic network. This is an amount usually based on the route miles between the two hand holes. So, lets say you tell the telecom provider you want a quote based on a 20 year IRU, the provider gets back with you 2 weeks later and gives you the quote. You could expect to see it in the following form. For the 20 year IRU, for two dark fiber strands the cost is $30,000 and the maintenance is $1,500 per year.
How did the provider arrive at these costs ? Dark fiber IRU pricing is typically per strand per mile. If we assume the fiber path is 5 miles between the hand hole at the high school and the hand hole at the middle school the price for a 20 year IRU could be $3000 per fiber strand per mile. Hence 5 miles x 2 strands x $3000 = $30,000.
For the maintenance, this is priced typically on a ‘route mile’ basis. What does route mile mean ? Route mile means it doesn’t matter how many strands you have. For example, if the provider charges $300/route mile for the maintenance of the fiber, this would equate to 5 miles x $300 = $1,500 for the maintenance of the 5 miles of fiber. Route mile means you don’t multiply by 2 for the 2 strands. If the maintenance cost was based on “strand mile” then it would be 5 miles x 2 x $300. However, maintenance is typically just based on the route mileage.
It may be becoming clearer to you, why you need to have a strong form of ownership. If you are good with the quote from the telecom provider, and you hand over $30,000 for the 20 year use of the fiber, and also hand over $1500 to pay in advance the first year of maintenance you obviously want to be sure that you actually do get to use the fiber for the full 20 years. You want there to be no chance the fiber is taken away from you right ? Since you have paid in advance for use for 20 years. Lets talk about what could happen (and indeed has happened in the industry). Lets say that the local telecom provider decided to expand their business and borrowed heavily to expand hoping to get more subscribers. Unfortunately, the boss of the telecom provider was not good at marketing and failed to attract enough subscribers to pay to operate the network and to pay the debt service on the borrowed money. The provider, 5 years after selling the fiber to you, declares bankruptcy. You are shocked to hear this and you start to worry about the fiber you purchased. You are right to worry ! What could happen to you, if you did not make sure when you first signed the agreement that you had the right language in the agreement to protect you. The worst thing that could happen is the fiber you purchased 5 years ago is transferred to the bankruptcy court and is considered an asset to make whole the creditors. You definitely do not want this to happen. You do not want anybody touching your fiber, or restricting your right to use the fiber, even if the telecom provider is in bankruptcy. How do you guard against this, and how do you protect yourself. You have to make sure that you have an IRU contract when you first purchase the agreement, and it should be called an Indefeasible Right to Use agreement. In addition and more importantly than the name of the agreement, you should have it spelled out in the agreement the type of ownership you obtain, and have it spelled out what will happen if the seller goes into bankruptcy – based on the type of ownership you have. This is absolutely critical, and I see many IRU agreements that do not spell this out. You cannot just assume that because the name of the agreement is an IRU agreement, that you automatically have protections. What the courts will look at is the written wording of the agreement – the plain language of the agreement. Thus, if you see any ambiguity in the agreement around the type of ownership you have, ensure that the agreement is updated so it is not ambiguous. And ensure that the form of ownership is such that you keep the assets, even if the provider that sold you the fiber goes into bankruptcy.
TERM – SOME LANGUAGE AROUND THE TERM GOES HERE
Part 2 – Fiber Leases
A less common, but still valid approach to obtaining dark fiber is via a fiber lease. You lease fiber instead of purchasing the fiber via an indefeasible right of use. You would typically lease dark fiber for a shorter time period than the 20 years in the IRU example above, for example, you may enter into a 5 year lease agreement. Also, rather than paying for the fiber in one lump sum payment at the beginning of the twenty years, in a fiber lease you typically pay for fiber on a monthly basis. This monthly payment would cover the fiber lease and the ongoing maintenance of the fiber. After the five years expires, you would typically be able to renew the term or walk away. Please note, that if you want to ensure you have renewal rights at the end of the 5 year term, you should ensure the agreement states this. You shouldn’t just assume the service provider leasing the fiber will continue leasing to you. If in a 5 year term, you decide 2 years in that you no longer want to lease the fiber, you will typically need to pay early termination fees to get out of the lease agreement. Some agreements may state that you have to pay 100% of the remaining term. Again, before you sign your lease agreement you should read and understand exactly what you’re signing up to. Quite often, the service provider leasing the fiber will allow you to “redline” the agreement, in other words, make changes that are more palatable to you. A lease type of agreement is a much less strong form of ownership than an IRU. If the service provider leasing the fiber goes into bankruptcy, the fiber will likely be handed back to the creditors, as an asset of the company, to be used to make creditors whole. Although you will of course stop your lease payments to the provider, there may well be severe disruption to your network if the dark fiber gets taken over by another party.
A dark fiber lease may be a good option if you want to start paying a monthly amount then later, switch to an IRU. Please note that if this is your intention, to first start on a fiber lease then switch to an IRU you should get agreement in writing with your service provider stating this is possible. You don’t want to be dinged for early termination charges if you do switch to an IRU from a dark fiber lease.
Part 3 – Connecting the Fiber you have Purchased
Lets assume you have now purchased fiber, whether via an IRU or a lease agreement. You are now the proud owner of two fiber strands from the manhole just outside the middle school to the manhole just outside the high school. Now what ? Well, the next step is to connect the fiber you have purchased to your school network at each end.
Within each school, you likely have a network of cat6 (or older cat5) cabling, fiber optic cabling, switches, routers and wireless Access Points. Or perhaps you just have a very rudimentary wired network, that you are looking to upgrade to a high speed wireless network. You want to connect your school network at each end to the fiber optic cable you have just purchased. You will need to bury (or hang on aerial poles) fiber optic cable from the school network to the man hole outside the school. A good practice is to install high strand count fiber cable from the school network to the man hole outside the school so that you have fiber for different purposes if needed. The man hole outside your school lets assume is a man hole that the school has constructed (note that this man hole is not the same as the service provider man hole). This school man hole, constructed by the school, is called the zero man hole in industry parlance – in other words, it’s the first man hole outside the school location. Now the fiber you have purchased is in the service provider man hole, that may be a few feet away (or further) from your man hole. You will need to either lay fiber from your zero man hole to the providers man hole, or have the provider bring fiber to your zero man hole. Once you have both your fiber pair and the fiber pair that you have purchased in the same man hole then you can “splice” the fiber together.
What is meant by splicing ?
Splicing is where you fuse two fiber optic cables together, by melting glass and making a glass bond between the two cables to create one continuous fiber optic cable from two distinct segments. It’s a very precise operation, since the glass has to be joined perfectly, for the light to pass unimpeded down the fiber cable.
There will be a splice operation at both the high school and the middle school, to now have the high school connected to the middle school via fiber optic cable.
The following diagram shows what we’ve talked about thus far. In this example, the connectivity and operations at the High School are the same as those at the Middle School. Both schools bring their fiber to the service provider manhole, to then use the fiber strands that the school has purchased or leased.
Drop me an email if you have any questions ! If there’s a particular topic you would like me to expand upon here, don’t hesitate to let me know.