Gigabit Cities

LightSpeed Looks to Plug the Gigabit Gap

Most mid-sized cities in the US have it tough when it comes to ultra-high-speed broadband: They're typically not on the short list of targets for the major telecom and cable operators with gigabit network aspirations. Yet they don't get the benefits of FCC designation as "underserved" communities, because they're not altogether ignored by the incumbent providers.

Communities that fall into that in-between category, then, are counting on companies such as LightSpeed Communications LLC if they want to become Gigabit Cities. LightSpeed is based in East Lansing, Michigan, and is currently building out a gigabit network to serve portions of the Greater Lansing region. The area in and around Lansing, Michigan's capital, has a population of about 460,000 people and sits about 90 miles northwest of Detroit.

Incumbents AT&T Inc. (NYSE: T) and Comcast Corp. (Nasdaq: CMCSA, CMCSK) have yet to announce any fiber-to-the-home (FTTH) initiatives in the community, and Lansing failed to woo Google Fiber Inc. -- though Google's efforts did draw attention to the demand and the business model of providing a fat pipe to homes. (See Is Google Good for Gigabit?)

"Google has proved that there is an enormous market for people who just want bandwidth," says Jason Schreiber, co-founder and CEO of LightSpeed. Schreiber and his fellow founders hail from regional optical network operator Arialink, which was swallowed up by Zayo Group Inc. (NYSE: ZAYO) in 2012. (See How Zayo Spent $3.7B on Acquisitions.)

Schreiber says his ambition to target the residential market with fiber-fed broadband dates back to 2007, and persists even as incumbent providers shy away from the opportunity. "Far and away, I've always believed [residential] was the larger market," he says. "The challenge is that you're selling to consumers. That's why a lot of the carriers have ignored it."

Ray of Light
Bandwidth-hungry residents of Lansing, Mich., like to see this truck rolling down their street.
Bandwidth-hungry residents of Lansing, Mich., like to see this truck rolling down their street.

For the latest on urban network innovation, visit Light Reading's dedicated Gigabit Cities content channel. And be sure to register to attend Light Reading's Gigabit Cities Live event on May 13-14 in Atlanta.

To date, LightSpeed has activated service in parts of four neighborhoods in the region, passing about 4,000 homes. The first customers were connected in October, and about 15% of homes passed have subscribed in the first two months, Schreiber says. The company is turning up eight to 10 customers per day, he says.

Customers who sign up online now for LightSpeed's symmetrical gig can lock into a $49/month price for at least two years, with no contracts. The company has 3,200 poles around the Greater Lansing region in various stages of permitting, Schreiber says, and is adding to that at a rate of 50 to 60 per day.

Gigabit Envy
Part of LightSpeed's marketing effort is to give customers lawn signs that taunt their neighbors.
Part of LightSpeed's marketing effort is to give customers lawn signs that taunt their neighbors.

As it is for many communities, the presence of a gigabit network can be critical to economic development when it comes to attracting businesses to a region. "Gigabit-speed, fiber-based service is as important for modern businesses as being adjacent to a railroad station or highway or airport traditionally was," says Jeff Smith, director of the New Economy Division of the Lansing Area Economic Partnership, the economic development organization in Greater Lansing.

And it's an important consideration for residents as well, thanks to trends such as home-based employees, video collaboration and co-working. "That demand from the business side translates to the consumer level," Smith says. "It's now a requirement. Companies coming to this market are demanding it and expecting it when they arrive."

LightSpeed is deploying point-to-point active Ethernet rather than opting for a shared GPON architecture, Schreiber says, so there is a 1Gbit/s Ethernet port for each customer. The fiber cable is outdoor- and indoor-rated, so it can be strung directly into the home, he says. "It changes the economics of the install when you can have one guy who doesn't require splicing skills connect the home," he says.

Portal to the Future
A LightSpeed technician installs a fiber distribution hub on a Lansing street. Each hub is capable of serving fiber to more than 400 homes.
A LightSpeed technician installs a fiber distribution hub on a Lansing street. Each hub is capable of serving fiber to more than 400 homes.

Plummeting electronics costs have made the gigabit-to-the-home business model more viable, Schreiber says. An optical network terminal that was $900 in 2007 is now $90, for example -- in part due to the efforts of the companies pushing a gig out to more communities across the US. In turn, entities such as LightSpeed are emerging to address demand and seize regional opportunities that the larger broadband providers have yet to lock down. (See Tucows Buys Into Gigabit Services and US Internet Rolls Out 10Gig in Minneapolis.)

"It's literally a fraction of the cost," Schreiber says. "We can thank Google and AT&T for that. They pushed the equipment vendors to innovate and reduce costs."

— Jason Meyers, Senior Editor, Gigabit Cities/IoT, Light Reading

jschreiber 1/27/2015 | 8:44:54 PM
Re: Full disclosure Our most recent cabinets use Active E switches with 28x1G downlinks and 2x10G uplniks. We do not use splitters. 
MarkC73 1/27/2015 | 8:40:47 PM
Re: Full disclosure Thanks, haven't heard about them in a while, I'll have to dig through some literature and see what it's all about, looks like they have an active-e card vs not splitting their OLT to get active-e.
jschreiber 1/27/2015 | 8:29:08 PM
Re: Full disclosure Zhone.
DHagar 1/26/2015 | 5:40:38 PM
Re: Falling Costs of Fiber Carol Wilson, agreed.  The ability to develop a cost-effective infrastructure model that allows FTTH to become a reality, I think is the key.  It seems they should be able to standardize basic infrastructure that can deliver affordable access and build in the connections that deliver the higher capabilities.

Clearly, cities are all wanting to become gigabit cities, so the ability to collaborate with cities/citizens on infrastructure and service would appear to align with providers' interests to grow the market.

I hope they let you go on a site visit and come up with ideas!
cnwedit 1/26/2015 | 11:26:09 AM
Re: Falling costs of fiber From Jason's piece, it looked like they had an even more seamless install process but maybe I'm overstating it.

Verizon let me tag along on some FiOS installs back in '06 but they chose homes that had advanced inside wiring - in one case, the guy was a serious gamer who had installed his own Cat-5 wiring throughout his house. 

So I never got to see the more complex process of the inside wiring, which I think would have been interesting.
brooks7 1/26/2015 | 10:37:07 AM
Re: Falling costs of fiber Just FYI, FiOS uses no splices....never has.  So, better look somewhere else for savings.

The way they solve the problem is that everything is preconnectorized.  The ONT has a box that can hold extra cable wrapped up.  The installer is given several preconnectorized lengths of cable and chooses the one closest to the neeed.  The extra is wrapped up and then the blind mate connectors used at the ONT and end of cable are mated.  In fact, we had the outside part of ONT installs down to 15 minutes by the start of 06 by working with Verizon.  The inside part...well not so much.

cnwedit 1/26/2015 | 8:43:30 AM
Falling costs of fiber Certainly everyone benefits from falling costs when FTTH is widely deployed and the way they are further saving, by eliminating splices that take time and costly skills, makes sense. I'd still like to know more about their business model and what the break-even point is in terms of penetration. 
MarkC73 1/26/2015 | 12:29:01 AM
Re: Full disclosure Any discussion on what vendor their using for their active-e access gear?  Inquiring minds want to know.  Thanks!
jasonmeyers 1/23/2015 | 5:30:37 PM
Full disclosure Lansing/East Lansing is my hometown, but sadly, LightSpeed hasn't reached my home as yet. I remain gigabitless.
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