Playing the long game in the fiber gold rush: Large investor owned provider overbuilding publicly owned network in small town that didn't initially pencil for private investment.

Fidium’s arrival has flummoxed local officials, partly because its parent company, Consolidated Communications, declined to build broadband infrastructure in Arrowsic years earlier, said Don Hudson, another commissioner. “It came as some surprise when all of a sudden we started seeing, essentially, a duplicated system being built on top of ours,” he said. “If it wasn’t actually happening, it would be laughable.”

Consolidated Communications, Fidium’s parent, owns many of the telephone poles in town. The local group had to pay tens of thousands of dollars to put its cables on them. That ownership has made it simple for Fidium to begin installing its own fiber without any approval from Arrowsic officials.

Machias-based internet service provider Axiom Technologies runs the town’s broadband service. Its CEO, Mark Ouellette, was also surprised to hear of Fidium’s entrance into Arrowsic. His company, which provides internet to several Maine towns, isn’t backing down.

“Typically, when another provider is in the community with fiberoptics, it’s quite a challenging business case to be made to build out fiber on top of fiber already there, especially in small places,” he said. “We are going to make a strong case that community cyber connectivity is an important asset for the community … because we return a percentage of our fees to the customer, back to the town.”

https://themainemonitor.org/arrowsic-broadband-challenge-fidium-fiber-network/?ref=broadbandbreakfast.com 

This is an interesting situation. A bigger for profit fiber ISP is overbuilding publicly owned fiber distribution infrastructure and taking advantage of its reduced barrier to entry with its ownership of the pole distribution infrastructure. 

Consolidated Communications is likely playing the long game. A premises fiber connection has long term value given the 30-50 year life of the fiber plant. Large investor owned providers enjoy greater economies of scale and ability to spread costs than publicly owned networks serving a single small town such as the case here  -- where both public and privately financed fiber desire to capture and keep end users.

This is the dynamic driving the fiber gold rush. A decade or two earlier, the business case for investor owned fiber turned on short term ROI that disfavored investment in smaller, less densely populated areas like Arrowsic, Maine. Now it recognizes the long term value of owning the fiber premise connection as well as the potential to sell it to an even larger player with a similar outlook.