States pay the bills with fiber-optic highways
States pay the bills with fiber-optic highways
By Robert Pease
The need for advanced communications infrastructures has led the department of transportation of another U.S. state to sign up for a fiber-optic network along its major thoroughfares. Like its predecessors, New Jersey`s department of transportation hopes to lease network capacity to generate the revenues to build, operate, and maintain its infrastructure.
New Jersey authorities have signed a contract with mfs Network Technologies (mfsnt--Omaha, NE--recently acquired by Able Telecom. See Industry Update, page 3) for a 415-mi singlemode- and multimode-fiber network along the New Jersey Turnpike, Garden State Parkway, and 15 mi in Delaware (see figure). The state authority is the third such customer for mfsnt, which recently completed a project in New York and is currently constructing a similar network in Illinois.
The New York project involved construction of a 524-mi singlemode fiber-optic network along the New York State Thruway. By the summer of 1999, Illinois will be operating a 276-mi singlemode fiber network along major portions of its interstate system (see Lightwave, February 1998, page 1).
The three systems have similar characteristics. However, according to Bob Eide, senior vice president of Network System Sales for mfsnt, there are differences in the motivations behind the networks.
"Illinois and New Jersey are similar in that their intention was to build the project and commit the money up front because they were convinced of the absolute necessity of such a communications system," says Eide. "New York, on the other hand, was much more concerned with developing additional sources of revenue." All three systems appear quite capable of handling both needs, he says.
Each project incorporates excess fiber-optic capacity that will be leased to telecommunications and information service providers, with the aim of generating millions of dollars in additional revenue. However, electronic toll collection (etc), along with related systems, will make up the bulk of collectable revenue. In New Jersey alone, revenue from toll violations over the contract period (10 years) is expected to reach approximately $450 million, while fiber-optics leases are estimated at $205 million during the 20-year life of the fiber-optic contract.
The networks allow options for leasing unused fiber capacity, duct capacity, and rights-of-way. In all three cases, says Eide, no communications carrier was allowed longitudinal access along state roadways for installation of communications facilities. But there`s a first time for everything, and rights-of-way will present significant advantages for the buyers.
"Buyers will get new routes constructed through some very valuable customer territory," says Eide. "In all cases, connectivity will be aided because of the length of the routes. The other thing is that because a very limited and controlled amount of construction activity is allowed along these roadways, once a facility is up and running, it`s relatively secure from possible cable cuts."
Eide is also enthusiastic about the role fiber optics is playing in communications technology. "These projects could not have been done any other way than by the use of fiber optics," says Eide. "Fiber was absolutely necessary to handle the telecommunications applications each system requires. There are a lot of high-bandwidth and video applications in the future that will require a backbone of fiber. Without fiber, there would be no need for these routes to exist."
Although the similarities in these three network systems may suggest a trend among states, Eide is skeptical about other states hurrying into similar projects. Many states, particularly those out west, have huge rural and sparsely settled regions where, he says, there would be little need for such systems. However, selective states, he concedes, may do similar projects if the demand and markets exist. q