Ducting Disruption Fuels Fiber for Smart Cities

How microducts and pushable fiber could make a difference in smart city connectivity.

Mari Silbey, Senior Editor, Cable/Video

November 7, 2017

7 Min Read
Ducting Disruption Fuels Fiber for Smart Cities

Cities, towns and telcos all want the same thing -- more fiber. But fiber doesn't just appear. It has to be funded, mapped and weighed against the construction disruption of real-world deployment.

Now, enter Clearfield Inc. (Nasdaq: CLFD), the fiber management company that thinks it's found an easier way.

Clearfield wants to give communities and telecom companies more control over how they time their broadband investments, and more flexibility to adapt deployment plans based on changing market and physical conditions.

The model works like this. Clearfield sells microduct infrastructure that a community or carrier can deploy when other construction is already underway (for roads, bridges, etc.), and that can be filled at a later date with pushable fiber. For municipalities, or even building owners, this means they can avoid taking on ownership of actual telecom infrastructure and create financial incentives for outside operators to extend fiber deeper into the community. For carriers, ductworks and pushable fiber mean savings on construction costs and the ability to move faster toward generating revenue on network services.

Ducting and pushable fiber aren't unique to Clearfield. CommScope Inc. , for example, is big in the microduct space, and PPC also markets its own brand of pushable fiber. But the combination of technologies is still relatively new, and Clearfield is trumpeting the approach as critical for enabling the volume of fiber deployments needed to support growing broadband demand.

"We think the model for either the building owner or for the community in general is to enable the lowering of construction costs to allow the service provider to do his work," says Clearfield CEO Cheri Beranek. "And so if you can lower those construction costs [with] a dig-once kind of mentality, you've really provided a means for the community to buy service when they choose to, and [still enable] a free market economy."

Figure 1: Source: Clearfield Source: Clearfield

Among the possibilities with the model, Beranek sees a major opportunity for communities to take advantage of AT&T Inc. (NYSE: T)'s current fiber expansion and to lay the groundwork for their own last-mile connections. AT&T has to pass at least 12.5 million locations with fiber by the end of 2019 under the regulatory terms of its deal to acquire DirecTV. But it doesn't have to directly connect every location it passes, and may choose not to do so depending on the specific economic circumstances. (See AT&T Preps for Big Fiber Build .)

However, if a community deploys ductwork in advance, that mitigates the costs for AT&T. It theoretically makes it more likely that AT&T will go the extra mile (pun intended) to drive fiber all the way to the residential or business end user.

For communities that don't want to manage their own broadband infrastructure, explains Beranek, it's still possible to "create a smart city initiative by creating a pathway that [the community] would own or enable." Officials could then open up that pathway to carriers for fiber deployment.

"The right way to do that is whenever you are opening up a trench, don't put in fiber, because a service provider wants to own their own fiber," says Beranek. "Put in multiple pathways for that service provider to own at a later date."

Ducts in detail
The Clearfield approach to fiber deployments is similar to the way the industry used to install ducts for copper years ago. The one big difference is the size. In the old days, ducts were two to three inches in diameter. Clearfield microducts, in contrast, have an outside diameter of just 10 millimeters, or less than half an inch.

"You can actually push a fiber that's been pre-connectorized in our factories to the desired endpoint so that you can turn up service with a single truck roll," says Beranek. "And by doing that, you've got minimal labor. You're going to be able to turn up that customer rapidly."

That pushable fiber is the other key innovation that Clearfield offers alongside its microducts. Despite its name, Clearfield's fiber cabling can be pushed or pulled through existing microducts to connector devices installed at the network demarcation point. Clearfield sells a reel for unspooling the fiber, the necessary connector units and several options for the number of fiber strands included in a cable, depending on customer preference.

As a caveat, Beranek does acknowledge that carriers aren't likely to want to share space in a single duct, so Clearfield recommends that communities deploy multiple ducts to attract multiple carriers. But she adds that the company's research suggests a service provider typically only needs a 30% take rate in a given region to earn a return on investment, which means there's room for profitable competition with multiple pathways in place.

Next page: Building a track record

Building a track record
Clearfield is a public company that's forecasting $75 million in revenue for the year. However, it's not a particularly well known brand, and the company has historically focused sales on the Tier 3 telecom market. Furthermore, Clearfield's strategy of combining microducts with pushable fiber is still relatively untested at scale, which lends some risk to deployment.

Beranek says the company has been most successful initially with municipalities that fear they won't get competitive, affordable broadband service otherwise. The city of Longmont Colorado, for example, is an end-to-end Clearfield customer that has expanded its electric utility operations to include delivery of broadband services. In areas where the city sells broadband (gigabit service goes for $100 per month, but customers who sign up within the first three months of availability pay only half that amount), officials say they have a take rate of more than 50%. And incumbents like Comcast Corp. (Nasdaq: CMCSA, CMCSK) and CenturyLink Inc. (NYSE: CTL) are reportedly responding to the pressure with new pricing discounts.

Figure 2: Image from Longmont, Colorado showing fiber network construction Image from Longmont, Colorado showing fiber network construction

"They're getting very aggressive on their pricing for sure," says Matt Scheppers, broadband operations director in Longmont. "They're providing some deals that [are] only inside of our city limits, direct competing with us. They have special price deals in our area for customer retainage ... They have people on the streets knocking on doors more than one time to the same customer."

Within municipalities, multiple-dwelling units (MDUs) have also been a particular bright spot for the Clearfield microduct-plus-pushable-fiber technology. Clearfield typically sees two business models in the sector. Either a private developer controls carrier access to the building, or a national carrier offers a revenue-sharing deal to an MDU owner in exchange for preferred business terms. In either case, Clearfield has something to offer, particularly because the company's engineering design is so flexible that it can be applied to a range of MDU environments. That means customers -- either developers or carriers -- can build out to multiple MDUs with the same basic technology.

"You do enough of those MDUs, you create [clusters] of opportunity," Beranek says.

For more broadband market coverage and insights, check out our dedicated gigabit/broadband content channel here on Light Reading.

The big future potential for Clearfield is, naturally, in larger deployments. That may mean working with larger cities that are still fighting to determine their fiber future, but it also likely means teaming up with Tier 1 telecom operators in wider-reaching partnerships.

There are two primary barriers to working with Tier 1 telcos, however. The first is that national construction groups worry that Clearfield's deployment process will reduce labor needs, although Beranek says the company's made progress on that front convincing the construction sector that new techniques for laying fiber will mean more projects overall.

The second is that Clearfield's pushable fiber doesn't match up against traditional equipment performance standards, which has made it difficult to prove to the industry that the technology will meet performance requirements. Beranek says the company has done pilots with national carriers, but no mass commercial deployments. That may be about to change, however, as Beranek explains that Clearfield is now close to being compliant with new standards, thanks to work it's done with independent testing labs.

Ideally, as Clearfield gains traction in the industry, it will be able to help both communities and service providers deploy more fiber, extending network connectivity for more consumer, business and Internet of Things applications. If the model works as advertised, Clearfield promises two significant benefits: the ability to create a solid foundation for the smart cities of tomorrow, and the ability to help telecom companies make more money in the process.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

About the Author(s)

Mari Silbey

Senior Editor, Cable/Video

Mari Silbey is a senior editor covering broadband infrastructure, video delivery, smart cities and all things cable. Previously, she worked independently for nearly a decade, contributing to trade publications, authoring custom research reports and consulting for a variety of corporate and association clients. Among her storied (and sometimes dubious) achievements, Mari launched the corporate blog for Motorola's Home division way back in 2007, ran a content development program for Limelight Networks and did her best to entertain the video nerd masses as a long-time columnist for the media blog Zatz Not Funny. She is based in Washington, D.C.

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