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Tower Companies Brace for an Edge Computing Bonanza

Cell towers are prime real estate for edge computing and their owners see major opportunity, once they figure out the business model.

August 7, 2018

8 Min Read
Tower Companies Brace for an Edge Computing Bonanza

For all the uncertainty in some aspects of edge computing, there is general agreement that cell towers will be the logical location for edge computing to happen first, which is why it's not surprising that major players such as Crown Castle and Vertical Bridge are investing in data center technology and exploring this next new frontier. They aren't doing it in the same way, however, and their respective efforts cast some light on differing business models. (See New Effort Tries to Curb Edge Chaos.)

Of course, neither company identifies itself as a "tower" operator, considering that is one type of wireless infrastructure and they each provide a broader scope including rooftops, ground locations, small cells and, in Crown Castle International Corp. (NYSE: CCI)'s case, 60,000 route miles of high-capacity fiber-optic cable to connect it all. For both companies, edge computing is just the next step in creating shared infrastructure that will support their next set of services and revenues.

That's true for the communications infrastructure industry in general, but what remains unclear is the business model. Joe Reele, vice president, Datacenter Solution Architects at Schneider Electric , which sells data center technology to all players, says two approaches are emerging and it's unclear which is better. Some of these companies, which are sometimes viewed as real estate operators, may get into the data center business themselves, while others will choose to lease space to those with data center expertise. (See The Great Edge Computing Land Grab.)

Figure 1:

"You can see that there are two very different business models that are being toyed with and to suggest that one is better than the other is a bit premature at the moment," Reele comments. "Certainly one model might be a faster deployment model, that is the 'I'll just lease out the space at the tower' approach, relying on someone in the industry who knows the clients. But it may not be as profitable. This is why it is the year of the pilot."

Unique assets
For Crown Castle, which has invested in edge compute infrastructure vendor Vapor IO , the approach for now will be to lease space and power at its towers and elsewhere for edge computing to happen, and also sell network connections to those sites, says Phil Olivero, vice president of technology.

"We've got a really unique set of assets in that shared communications infrastructure [of] small cells and fiber," he says in an interview. "That allows us to address exciting new communications opportunities like edge computing. We have 40,000 towers that are located at the edge of the wireless network, where it connects to the wired network, and we have space at the base of those towers that serve as a perfect place to put edge data centers. What is unique for us is that we also have 60,000 route miles of fiber that can connect edge data centers back to the core data centers or other destinations they need to connect to. Our focus is on being an enabler of this technology, but it is still very early innings on this opportunity."

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Vertical Bridge comes at this space from a slightly different direction, as an operator of wireless and broadcast infrastructure. It is partnering with DataBank Ltd., which provides data center, cloud and interconnectivity services, to build micro data centers on its tower/broadcast sites and in the 6,000 buildings to which it has exclusive rights, and will be selling that to carriers, content owners and more, says Bernard Borghei, executive vice president of operations and co-founder of Vertical Bridge.

The two companies share a parent company in Digital Bridge Holdings , whose family of companies also includes ExteNet Systems Inc. , owner and operator of neutral host facilities including small cells and DAS, and core data center company Vantage as part of its portfolio.

"We are the owners of the largest portfolio of broadcast towers in the country and the broadcast sites come with a lot of land," he tells Light Reading. "All of our sites have their LTE deployment and through the radio stations that operate on them, we have fiber. There is power available; there is land, there is fiber, there is water for a cooling system. So we started talking to DataBank and decided we would be able to use our sites and deploy these modular, scalable edge micro data centers right at the edge of the network. We would contribute our assets and our relationship with the carriers, and DataBank would bring in their engineering and operations and maintenance expertise in operating them."

Next page: The 5G play

The 5G play
Both companies are viewing the development of micro data centers as critical to 5G deployment, the Internet of Things, connected cars and much more. Data from sensors and other devices can be aggregated and analyzed closer to where it's produced and content can be stored closer to where it's consumed, offering lower latency and greater efficiency.

That's why, in addition to the carrier customers they already serve, communications infrastructure companies like Crown Castle and Vertical Bridge are eyeing large content players and applications developers as customers as well.

"We do see new entrants -- Netflix might be one example, or anyone who has to provide local content," Borghei says. "We foresee that in order to reduce transport costs, which is critical part of why edge makes sense, and also to achieve low latency, there will come a time where someone like Netflix could store their top ten downloadable [pieces of] content for the month for a specific zip code, locally at a couple of edge micro data centers that serve that zip code. And then they would be able to refresh and update that list as they see fit."

"We are certainly seeing some of the big content companies are looking to push content and user experience closer out to the user," agrees Crown Castle's Olivero.

His company is not engaging in the debates over how edge computing develops, which platforms or open source approaches emerge or which technologies prove more viable, he says. "We're leaving that to companies like VaporIO," Olivero says. "Our focus is on using the building blocks that we have implemented for many years to re-apply them to the edge computing space."

Neither man sees a particularly difficult challenge for their companies in the edge computing space, but then again, they both admit that may be because it's still early days.

"I'm not sure we have concerns yet because we haven't deployed," Borghei says. "The edge strategy will take a while to unfold and get deployed. Our view of it is that this will be something we will discuss and come up with new thoughts and ideas for implementing for the next three to five years for this picture to come together."

Security not a challenge
Interestingly, Vertical Bridge is not worried about one of the early concerns and that's securing edge compute space because of the monitoring infrastructure it already has in place, Borghei says.

"We have to monitor our power lights for aviation needs, which we do wirelessly and remotely through our NOC," he says. "We can add cameras and sensors for opening doors so we're pretty comfortable that [we have] the right level of security [and] we can beef up the security as needed and monitor through our NOC 24/7."

With exclusive rights to more than 6,500 buildings across the country for rooftop and in-building deployments, Vertical Bridge is also gearing up to provide edge compute/aggregation for things such as Cloud RAN and more. Borghei says the company was pitching its tower sites to one carrier customer but found that company was equally interested in the building access, specifically to support CRAN by housing the common baseband unit for many distributed radio access units, but also for much more.

"That was an eye-opening conversation for us too," he says. "They were interested not just in our tower sites but all these buildings that we have exclusive management rights to for telecom deployment in the urban area and that could become pretty interesting for really getting close to the edge as the number of devices increases, and low latency becomes even more important."

Crown Castle is also looking at the possibilities, but Olivero says it's too early to consider whether even some of its small cell and DAS sites are right for edge computing. "I think that's too far in the future to talk about now," he says.

— Carol Wilson, Editor-at-Large, Light Reading

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