Fiber Internet Is Changing The Way Business Gets Done
For years, Middlesex Savings Bank has connected its 30 branches to its Natick headquarters with what was not long ago the gold standard in telecommunications — a T1 line.
But times have changed, and so have the bank's need to move information from one place to another.
These days, says Sean Burke, senior vice president and IT director for Middlesex Savings, opening a new account for a customer at any branch means using three different Internet-based applications for things like background checks. Instead of sending couriers to bring checks from the branches to a central location each night, the branches make digital images of the checks and send them electronically. And in place of posters and flyers announcing new products, lobbies have plasma televisions and electronic banners that can be swapped out at the push of a button at the main office.
The bank also pulls all of its surveillance video together electronically so it can respond faster to security issues, and it's planning to use video conferencing to teach branch managers about new products so they don't have to drive to Natick for training.
"We're trying to improve operational efficiencies," Burke said. "We're trying to improve customer services."
So, in December, the bank signed a contract with Boxborough-based Lightower Fiber Networks to replace the T1 line with much faster fiber lines.
Fiber Internet, according to Fiberforall.org, is able to send data faster and over greater distances than cable Internet and is also immune from interference because glass cannot conduct electricity. The only downside is that, for now, fiber is only available in limited areas. But that is changing.
Boxborough Merger Reflects Fiber's Rise
Lightower, which is in the process of merging with former competitor Sidera Networks in a $2 billion deal led by Boston investment firm Berkshire Partners, is just one of a range of businesses, from traditional telephone and cable companies to data center operators to IT providers, that are changing the things people can do with information. Their interconnected and sometimes competing structures enable everything from video conferencing to working from smartphones to moving major parts of companies' IT structures to the cloud.
"We essentially enable the cloud," said Lightower CEO Rob Shanahan. "To connect the world to the cloud, our network is required."
Shanahan, who will lead the combined company, said both Sidera and Lightower have made a number of their own acquisitions in recent years, bringing their combined network to more than 30,000 miles of fiber lines. The merger makes particular sense, he said, because the two companies provide similar services with Lightower's network concentrated in Massachusetts and New York's Hudson Valley while Sidera's is mainly in New York, Chicago and the Mid-Atlantic region.
"Although we operate in the same markets there isn't a tremendous amount of physical network overlap," he said.
Shanahan said about half of Lightower's customer revenue comes from carriers like AT&T and Verizon, which use its network to carry its customers' voices and data for parts of their trips from one part of the world to another.
With the huge amount of data coming from smartphones and tablets, fiber networks help bring data from cell towers to carriers' main networks.
Lightower fiber serves purposes as diverse as sending television signals from Gillette Stadium to ESPN, moving medical records between hospitals, clinics and data centers, and letting college students tap into the Human Genome Project, Shanahan said.
The emphasis many financial firms now put on lightning-fast trades also gives Lightower a market, Shanahan said.
"Probably every trade on the various stock exchanges touches our network at some point," he said.
For small to mid-size companies, one of the major benefits of a high-speed fiber network is the ability to move their IT structures into the cloud.
Cbeyond, a Georgia-based company that has been operating in the Boston area and beyond for the past two years, sells cloud services, including letting companies run their entire networks from its Kentucky data center. Of course, that demands a consistent — and very fast — connection to Kentucky, so Cbeyond also works with fiber carriers to connect office buildings to fast networks.
The company, which markets its services throughout MetroWest and in the Worcester area, works with property managers who may not even realize their building is located along a high-speed fiber line, said Steve Thompson, a market director for Cbeyond.
He said the firm can supply the internal wiring to connect the suites within a building to that main line, and that offers building owners something they can sell to potential tenants.
"It's nice to have a drycleaner in your lobby but it's even better to have high-speed Internet," he said.
Knowing What To Ask For
Katie Keefe, a property manager with Capital Group Properties, which manages about 20 properties, in MetroWest, said she's in the process of getting high-speed Verizon service in her buildings. She said Verizon is particularly popular with companies that have offices closer to Boston, or are moving from that area, because many of them have existing contracts with the company.
Keefe said major companies like Olympus and Goldman Sachs are particularly eager for fast connections because they need to communicate with far-flung corporate offices.
"Smaller companies are more apt to take on whatever is existing in the building," she said.
Of course, "high speed" is a relative term. Cbeyond provides 100 megabytes per second, both downloading and uploading. Verizon's fiber Internet product, FiOS, lists speeds ranging from 15 to 300 Mbps downloads and 5 to 65 Mbps uploads, and Comcast offers about the same. In some cases, cable or telecom companies keep their speeds high by moving their data traffic through lines owned by Lightower or a similar company.
Unlike the consumer-focused Verizons and Comcasts of the world, and unlike big international fiber companies that focus mostly on moving data over thousands of miles, Lightower is particularly focused on connecting metro areas with fiber. With its home base in MetroWest, it has a strong network in the area. While some customers are looking for quick service to Boston, and from there to the rest of the world, Shanahan said, others use Lightower to connect offices a few cities apart. Manufacturers may need a fast connection between a plant and a nearby headquarters, and pharmaceutical and biotech companies want to tie their laboratories with their offices.
Lightower also operates data centers that allow customers to bring their own servers and connect them to their offices, so clients can avoid worrying about security.
Fiber Landlord
About 40 percent of Lightower's business involves "dark fiber," letting companies simply lease two strands of fiber — about the thickness of a human hair — that run for miles. Lightower cables running along utility poles contain 430 of these strands, Shanahan said. In contrast, "lit fiber" includes electronics to manage the bandwidth and provide specific services, and companies can share space on the fiber.
One of Lightower's dark fiber customers is the Massachusetts Broadband Institute (MBI), a division of the Massachusetts Technology Collaborative. The group is in the middle of a $45 million federally funded-effort to build nearly 1,000 miles of new fiber in Western and North Central Massachusetts. MBI leases fibers from Lightower that stretch between those regions and Boston, connecting them to the wider Internet.
MBI director Judy Dumont said the new network is filling a crucial need. It's increasingly difficult for a business of any shape to operate without a high-speed Internet connection, she said.
"If you think about the importance of fiber networks to businesses, think about it as the equivalent of electricity to businesses," she said. "An enterprise cannot do anything without having that bandwidth that they need."
Dumont said businesses are finding new reasons every day to use fast connections. A few years ago, she said, the main need was communication between a company's various offices, but an expanding part of broadband is now used to access their stored data in the cloud.
"You'll see that grow in importance as time goes on," she said. "We don't really see an end in sight."
The capacity of fiber is impressive — one strand could handle all the voice traffic in Massachusetts today, Dumont said—yet demand is growing all the time. Beyond cloud computing, she said, more companies are focusing on analytics and big data, collecting huge volumes of raw information and using it to drive their businesses.
Michael Bisaha, a research analyst with Washington, D.C.-based telecom market research firm TeleGeography, said each year the bandwidth for information traveling between major Northeastern cities grows by 15 to 20 percent. With that growth, the prices customers pay to move their data around have been falling.
"As long as they keep in some balance I think the industry's going to continue this way." Bisaha said. n
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