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Who's Got GIG-BE Fiber?

Excitement over the selection of gear for the U.S. Defense Department's Global Information Grid Bandwidth Expansion (GIG-BE) project (see GIG-BE Winners Named) has deflected attention from another part of the same contract, which was finalized last week.

The U.S. Defense Information Systems Agency (DISA) announced September 24 that it has awarded two contracts for "fiber optic infrastructure," cumulatively worth $390 million (see GIG-BE Fiber Contracts Awarded).

The contract prices are fixed, DISA says. One contract is for the actual fiber itself, which won't exceed $250 million. The other is for "life cycle support," and it will go up to $140 million.

The contract for fiber links was the first part of the GIG-BE work to be tendered, and it's the first to be officially finalized. Seven fiber proposals had reached the government by May 16. But the RFP was quickly eclipsed by the four-part equipment contest, worth roughly $900 million.

The fiber portion is also the most secret element of GIG-BE, because it includes the actual connections that will link approximately 100 "critical sites in the United States, Pacific and Europe," according to DISA. For months, DISA has maintained that "For security reasons, the names of the contract awardees will not be publicly announced."

This hasn't stopped speculation. Two analysts have told Light Reading that Level 3 Communications Inc. (Nasdaq: LVLT) is rumored to have won the main chunk of work.

Pure guesswork, but it makes sense in several ways. First off, Level 3 is among the only carriers with sufficient international dark fiber to bid the job. For another, it's U.S. owned -- and DISA has stipulated that the contracts go to U.S. companies. That jettisons Global Crossing Holdings Ltd., in which Singapore's ST Telemedia Pte. Ltd. plans a large stake (see Can Global Crossing Be Sold? and STT Investment in GlobalX OK'd).

There may be at least one other winner, particularly given DISA's emphasis on route diversity. Analysts say candidates included AT&T Corp. (NYSE: T), WilTel Communications Group Inc. (Nasdaq: WTEL), and perhaps Qwest Communications International Inc. (NYSE: Q).

Whoever has won or lost, there will likely be two near-term results of the GIG-BE fiber award. First, eyes will be glued to U.S. carrier financial statements, hoping for evidence of government input.

Second, it's likely to stir controversy, like everything else about GIG-BE so far. Legislators, some reportedly responding to complaints about the selection process from constituent vendors, have already headed to the Pentagon (see Was GIG-BE Process Flawed?).

— Mary Jander, Senior Editor, Light Reading

wilecoyote 12/4/2012 | 11:21:53 PM
re: Who's Got GIG-BE Fiber? on the grassy knoll.

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