After millions of investment, jurisdictions try to achieve potential of fiber network

Three years ago, the state completed one of the nation's largest public investments in a fiber optic network— installing hundreds of miles of cables that politicians said would secure fire and police communications, spur economic development and lead to faster, cheaper internet.

Today, much of that potential remains untapped, lying unlit like a 21st-century highway to nowhere.


The network, much of it financed by $115 million in federal stimulus funds, connects primarily to public buildings, like schools, libraries and police and fire stations. But many of the extra strands installed in anticipation of private-sector demand lie dark.

"Right now, it's an asset that's underused," said Joseph Carella, program manager for the Mayor's Office of Information Technology.


But as jurisdictions around the region unveil deals to lease some of the publicly owned strands, there are signs that could be changing.

In November, Baltimore announced its first deal with a private entity, a real estate firm leading the large Stadium Square redevelopment in South Baltimore. Howard County unveiled an agreement in February with a wireless broadband provider to use the county's fiber to offer service to rural residents, following a similar arrangement in Anne Arundel County. Howard and Baltimore counties also signed deals allowing private entities such as the Johns Hopkins Applied Physics Lab, Exelon and the Columbia Association to use strands in the network.

"We have capacity that we're not using, but we're actively trying to get folks on board," said Rob Stradling, Baltimore County's director of information technology.

As video streaming and data downloading increase, demand for high-speed broadband has soared. That has fueled a national push to expand fiber networks, which can carry significant amounts of data at the speed of light.

But bringing fiber to individual homes and offices is expensive — installation often requires negotiating permits and rights of way, and digging up streets. Across the country, investment by big internet providers such as Comcast and Verizon has lagged, especially in poor or rural areas.

Public networks were created in part to fill those gaps, but they face challenges similar to their private counterparts. Officials in the region are spending money to expand the networks — Baltimore County invests about $1.5 million a year, for example — but use remains limited as officials try to work out ways to fund that so-called "last mile" connection.

In Baltimore, Caves Valley Partners agreed to pay to extend the public network to an office building in its Stadium Square project in South Baltimore, where it hopes to attract high-tech, creative companies. It also leased unused city-owned strands that tie into a nearby Tierpoint data center, giving potential tenants a wealth of high-speed options for broadband service and data hosting.

Developer Arsh Mirmiran said he believes the agreement — valued at $50,000 over 20 years — will give his firm an edge in attracting tenants looking for faster, cheaper internet.


"I wasn't thinking about it, and someone from the technology community told me this was a big deal if we wanted to be competitive," he said. "It's something that tenants are looking at."

The Stadium Square agreement is unusual in that it involves a real estate firm — not an internet provider or consumer.

Christopher Mitchell is a researcher for the Institute for Local Self Reliance, which follows broadband efforts across the country. In other countries, he said, developers responding to tenant demand have played a critical role in building out networks with competitive offerings.

"I'm glad to hear that real estate is getting more involved in this," Mitchell said. "I would expect to have more of this."

Mark Wagner, the CEO of ThinkBig Networks, helped Caves Valley work on its agreement and is consulting for other projects, including Under Armour CEO Kevin Plank's massive Port Covington development. He said he expects to see more public-private partnerships.

His firm is rolling out broadband service in Kent County on a network financed by a such a partnership. He compares the process to the creation of the electrical grid in the 1900s.


"We're very much in the situation right now where electricity was at the turn of the century," he said. "That would not have happened without economic development money coming in."

Public fiber networks have generated intense policy fights.

Supporters say high-speed internet is just the newest type of utility — and the fiber that it runs through should be viewed as any other form of infrastructure, with private companies paying to access it, and competing to offer service to consumers.

Opponents say the public networks discourage private investment and present unfair competition to private companies already in the field, especially when municipalities start to sell internet service like a utility.

Comcast, the dominant internet provider in Baltimore thanks to its cable television franchise, declined to say whether it supports or opposes public fiber networks, but identifies them in its financial disclosures as a competitive threat, and tried to block a similar effort in Chattanooga, Tenn.

Comcast residential customers who live within one third of a mile of the firm's fiber network, including those in Baltimore city and county, can order it, with pricing of about $300 a month, plus about $1,000 in installation and activation fees, according to its website. The company declined to say how many residential customers use the offering.


At a recent investor presentation, Chief Financial Officer Mike Cavanaugh said the company is focused on upgrading its network to allow for faster speeds, with emphasis on wireless.

Verizon offers its fiber-based FiOS service in parts of seven counties in Maryland, including Baltimore, Anne Arundel, Harford and Howard. It's also available at select addresses in the city, according to its website, but a campaign mounted by local residents to expand that reach has had little effect.

Verizon has no current plans to expand its network outside of places where franchise agreements are already in place, spokesman Michael Murphy said. He said the company prefers to build and maintain its own infrastructure, but does not oppose efforts by municipalities to improve their own fiber networks.

"Municipalities make those types of determinations as they see fit," he wrote in an email.

In Maryland, most of the models so far focus government efforts on infrastructure, not service.

Kent County brought on the dark-fiber provider FTS Fiber this year to build and manage a 110-mile network. The Eastern Shore county is contributing $4.5 million toward the roughly $20 million anticipated investment. The network is to connect to 54 anchor institutions. ThinkBig is helping to pay to install connections to homes. Other internet providers can lease strands as well.


The city of Westminster floated $21 million in bonds to install a fiber network. The city granted Ting, a unit of a Canadian telecom company, the exclusive right to lease its network in the beginning, but other internet providers eventually will be able to lease fiber and offer service to customers, competing on price.

"It's a perfect division of labor," said Dr. Robert P. Wack, president of Westminster's City Council.

Progress toward making greater use of the region's public fiber varies.

Baltimore Mayor Catherine E. Pugh wrote of a need for fiber infrastructure in her December letter to President-elect Donald J. Trump. The city is working on other ways to put the existing network to use, offering free Wi-Fi in public parks and community centers and looking at establishing an authority to govern it, said Carella, the information technology program manager.

Baltimore County has hired a program manager, published a map of its network and uploaded a sample lease agreement to make it easier for companies to investigate the option.

Leasing agreements were an early part of the program in Howard County, but officials are not actively marketing, network infrastructure and service manager Gary Shives said.


Officials in other jurisdictions said they want to use the networks to spur economic development but are still figuring out which model will work.

"The question is, how do you enable a government-owned infrastructure to be used commercially?" asked Rick Napolitano, interim chief information officer in Anne Arundel. Plans "are in the incubation stages and will likely take many years to develop."

Dave Schaeffer is CEO of internet provider Cogent Communications, one of the firms that offers service at the Tierpoint data center. He said the firm's sales have been limited in the Baltimore market because it's difficult to get access to unused fiber.

"If [jurisdictions] can unleash it and make it available to private business, it would spur business to come into Baltimore and provide jobs," he said. "We think it is a great thing for the city to spur economic development."

The former Hardesty Capital Management, now known as Tufton Capital Management, moved from Baltimore to Hunt Valley two years ago in part because it wanted more internet options. It now pays for two high-speed services that run on fiber, associate Ted Hart said.

He described the move as a "huge upgrade."


"We went from two tin cans communicating through a string to actually communicating," he said.

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The need is most extreme for businesses, especially tech companies such as those Mirmiran hopes to target.

Stephanie Williams, president of Bozzuto Management, said residential customers are demanding internet service at the speeds supplied by fiber as well.

"I wouldn't even call it an amenity," she said. "It's an expectation."

Ira Levy led the installation of the Inter-County Broadband Network and now works for a consulting firm that helps manage similar systems. He said the region needs strong, focused leadership to ensure the millions of dollars invested in the network are put to the best use.

"What ends up creating an issue or resulting in failure a lot of times is … they might get [fiber] in the ground but there isn't enough direction, goal-setting, governance, to actually ensure that it's adopted," he said. "There is a lot more potential — like, an incredible amount more potential."


This story has been updated to correct information about the availability of fiber optic service to Comcast's residential customers.