Ziply Fiber is pushing ahead rapidly with fiber network deployments in its incumbent local exchange carrier (ILEC) footprint. But the company is also broadening its scope by adding "edge-outs" and through selective use of fixed wireless access (FWA) technologies.

Ziply Fiber is also sizing up its participation in the Broadband Equity Access and Deployment (BEAD) program. And like some of its telecom peers, such as Frontier Communications and Lumen, the company is taking a pass on adding mobile to the home broadband bundle.

Those are a few of the big topics Ziply Fiber CEO Harold Zeitz recently discussed with Light Reading.

Figure 1: Ziply Fiber CEO Harold Zeitz's industry experience tracks back to Wave Broadband, AT&T Wireless and McCaw Cellular.
(Source: Ziply Fiber)

Ziply Fiber was formed via the acquisition of Frontier's former operations in Washington, Oregon, Idaho and Montana. The company's primary focus remains building and upgrading its legacy ILEC footprint to fiber-to-the-premises (FTTP) technology.

Carving out edge-out opportunities

But the operator is also starting to get more aggressive with edge-outs – fiber builds in towns and areas that are adjacent to its existing facilities and footprint. The first example is Yakima, Washington, which also happens to be the 100th town or city that Ziply Fiber is connecting to fiber.

"We're bringing fiber to towns where maybe they've been left out before," Zeitz said.

More edge-out deployments are in the works as the company engages with additional towns about obtaining permits and requisite franchising agreements, he added.

Ziply Fiber's edge-out strategy has expanded the company's buildout ambitions. Its initial goal was to bring fiber to 80% to 85% of locations within its ILEC footprint where it was financially feasible. Zeitz estimates that the company is about half way towards that goal but notes that the overall buildout plan now includes the edge-outs.

Echoing expectations of others that are active with fiber builds, such as Frontier and AT&T, Zeitz said he's "highly confident" that Ziply Fiber can achieve service penetrations north of 40% in its ILEC footprint and in the edge-out areas.

"We're building in places where there isn't fiber," he said. "It's new and fresh and it's exciting to have choice."

Fiber buildout costs down 'slightly'

Zeitz also expects some of the company's build costs to come down "slightly" this year due in part to a higher mix of aerial builds rather than underground plant. The company's general network costs are in the range of $900 to $1000 per location.

"And we're getting better at some of the other cost elements" of the builds, he said. "I realize that that may not last forever, but we're actually not seeing the impact of supply chain and resource constraint … We're finding that we're relatively stable."

Ziply Fiber, which counts Cable One as an investor, is targeting an annual fiber build cadence of a "few hundred thousand" locations, according to Zeitz. He said he has the discretion to curtail buildouts to generate more cash flow if necessary, "but we're choosing to take the opportunity to continue building."

Ziply Fiber, which offers speeds up to 5 Gbit/s in its fiber/XGS-PON service areas, is also considering how to tackle parts of its footprint that are uneconomical to upgrade on their own. In those cases, the company is exploring partnerships with local municipalities and various grants.

Ziply Fiber has already committed to build to 23,000 locations using funding it bid for and won in phase I of the Rural Digital Opportunity Fund (RDOF) auction. The company is also expected to participate in the $42.45 billion Broadband Equity, Access, and Deployment (BEAD) program. State-by-state BEAD funding allocations are set to be announced by the NTIA on June 30, 2023.

Selective use of FWA

Fiber is Ziply Fiber's primary tool, but fixed wireless access (FWA) is also starting to factor into the equation organically and through recent acquisitions. As one example, Ptera, which Ziply Fiber is in the process of acquiring, will bring more FWA assets and expertise.

FWA "is another way that we think we're going to be able to address some of these high-cost locations," Zeitz said. "Our goal is to get the best and fastest Internet to all of our constituents. In some cases, building fiber is non-economical, and there's not sufficient grant money to cover it. So, wireless is another alternative we look at … It will be used selectively."

Turning to mobile, Comcast and Charter Communications have had some success bundling mobile services with home broadband. However, Ziply Fiber isn't convinced that the time is right to pursue a similar bundle, an attitude shared by fellow telecom operators Frontier and Lumen.

"Our current path is to stick with being a broadband data provider," said Zeitz, who has a wireless/mobile background from his time at AT&T Wireless and McCaw Cellular.

No demand for bundles

Research is demonstrating that consumers aren't necessarily clamoring for a home broadband/mobile bundle but are willing to take it if the discount is attractive enough, Zeitz said.

"To me, it's not necessarily a sustainable thing to offer that discount for long periods of times," Zeitz said. "If it got to the point that customers were saying, 'Hey, we really want those services combined, help me get it,' then we would think about it differently."

He added: "It's certainly something that we will continue to look at, but we're actually not seeing the demand from customers for it."

Ziply Fiber will be in position to switch gears if demand for a broadband/mobile bundle picks up. As a member of the National Content & Technology Cooperative (NCTC), the company has access to a new mobile agreement for NCTC members put together with Reach.

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— Jeff Baumgartner, Senior Editor, Light Reading