The combination of ubiquitous broadband and cloud computing are behind the birth of massive data centers, ever smarter (and larger) mobile devices and fatter networks. And when it comes to building fatter networks a new generation of companies has arisen that are using fiber to deliver Ethernet capacity to Internet Exchange points in a way that’s more flexible and cheaper than older copper-based or point-to-point fiber networks. We are moving into the terabit age, and in the last few years, several new companies building out fiber networks have started and received private equity investments, including Sidera, Lightower, Allied Fiber, Zayo and others.

Craig Plunkett, managing director of CEDX Corporation, wrote a post for GigaOM last year describing the change in connectivity that is behind this deal:

Ethernet exchanges open options for subscribers and publishers that didn’t exist in the time of point-to-point provisioning. Combine the growth of MetroE footprint, the increases in carrier Ethernet capacity to 40 and 100 Gigabit and new long- and short-haul dark fiber providers coming online with connections to Ethernet exchanges, and the world sees the rise of a new international communications platform being built on an Ethernet backbone that’s cheaper and more flexible than legacy copper. This is a repeat of the revolution that took place over a hundred years ago with the rise of the Bell system. In this case, it’s being built on a packet switched fiber infrastructure, and with central offices that are carrier-neutral from their inception. This new platform will give rise to revolutionary capabilities and efficiencies in the way we communicate, produce and consume content, store data and use compute cycles.

M/C Partners and Pamlico Capital acquired Lightower from National Grid plc in August 2007 and also has an investment in Zayo. M/C will exit Lightower with this deal, while Pamlico Capital, a Lightower investor, and ABRY Partners, a significant Sidera investor, will remain as investors in the new company. The combined company will be led by current Lightower CEO, Rob Shanahan. The merger is pending regulatory approval and is expected to close in the second quarter of 2013.

Following the merger, the combined company will have a 20,000-mile fiber-based network throughout the Northeast, Mid-Atlantic and Midwest, with connections to critical landing sites and exchanges internationally. The combined network will provide access to more than 6,600 on-net locations, including commercial buildings, data centers, financial exchanges, content hubs and other critical interconnection facilities.

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There is a ton of computing involved in this sport, and it all serves a different purpose.  On the one hand, there’s the horsepower required to compute different airspeed dynamics over the car’s form, while on the other there’s the massively parallel computing required to analyze the streams of data thrown off the cars in real time. And there’s a lot of gear that is packed up and travels from race site to race site.

The great F1 traveling IT show

Ahead of the show I talked to Mehul Kapadia, VP of strategic alliances and sponsorships from Tata Communications, about how some of the Formula 1 computing happens in the field. And one of the coolest things is that everything happens in the field — from the broadcasting of the race to TV and to apps to the creation of a DVD highlights video covering the whole season, most of the video and web output of the F1 occurs on a race site.

The place it occurs is a broadcast center that contains 160 tons of different gear, from servers to video-editing modules owned by F1. That gear is transported to each race on a jumbo jet and is designed to be set up in 24 hours and dismantled in 12 hours. The video feeds from the track to the rest of the viewing world is handled by satellite, but Kapadia is hoping that soon that will change. Tata is one of the largest IP backbone companies in the world and is hoping that after this year it can help transition the F1 world from satellite to fiber.

The trend of sending more and more HD-quality sports content via fiber networks instead of via satellite is one I’ve been hearing about for several years. Yet it’s a slow transition, in part because broadcasters and organizations that manage the sports are hesitant to mess with a formula that works. For all of the F1 races Tata provides a gigabit of connectivity to the track itself, which is more than 10 times the capacity than F1 had prior to the Tata sponsorship.

“In the middle of Austin this isn’t a big deal, but some of these sites are fairly remote,” said Kapadia.

And because the race teams are using on-site connectivity to stream data from hundreds of sensors inside the car to their teams that perform real-time calculations on-site, the extra capacity is going to get used. Those calculations help the racing teams tell their drivers when to come in for a pit stop or how to handle the course or other drivers. Somewhere in all that information, there’s almost certainly a great big data case study.

How much will F1 put in the cloud?

Tata is also hosting the Formula 1 web sites and apps in its data centers. And like most sports, the demand on the web site fluctuates incredibly — hitting peaks right before and during the race itself. It also experiences interest from all over the world, since F1 is a truly international sport. This poses geographical challenges and also means that any prime time isn’t constrained by a certain time zone. Tata hosts some of the site’s content on its on-demand InstaCompute cloud, but it also has built a content delivery network using technology it acquired through the purchase of BitGravity in 2011.

But still much of the F1 IT work is handled on site at the broadcast center, which means that F1 IT staff are on the road a lot — even if it’s to exotic locales. By putting more of its operations in the cloud and by having fat pipes connecting the racetracks, Kapadia hopes that he can take F1 online and let more take place from remote locations. Because as cool as it is to have a traveling IT infrastructure and support team, it’s also a logistical challenge — and something better connectivity and the cloud could help solve.

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Thus, the announcement that AT&T will use small cells to build out density is important, because it will allow more subscribers to take advantage of the limited airwaves, and is yet another carrier commitment to the HetNet concept. This idea combines the use of multiple radio technologies –from LTE to Wi-Fi — as well as a variety of different base stations and antennas to maximize the capacity of the airwaves, and is the next generation of cellular infrastructure.

In addition to its cell towers, AT&T said it will use more than 1,000 distributed antenna systems. DAS setups take the capacity of a single cell and distribute it among numerous antennas, allowing a carrier to shape cellular coverage within or around buildings rather than just blast bandwidth out from up on high.

AT&T will also use more than 40,000 small cells to build out a highly dense network that can reuse spectrum and hopefully move traffic off the airwaves and on to AT&T’s fiber networks. The initial deployments of these dense networks will begin in the first quarter of next year and will work with the 3G UMTS and HSPA+ networks that AT&T has deployed. By 2014 AT&T will support LTE on these small cells as well. Both Verizon and Sprint are already exploring similar plans to make their networks more dense using small cells as well.

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Policymakers (many well-intentioned), government agencies, and elected officials, as well as big telecos’ lobbyists conning their way into more government subsidies for empty broadband promises, seem to fall into two camps hindering progress.

Bold weavers versus assumptive forecasters

One camp is the bold weavers, those who spout numbers and stats that seem woven from whole cloth, indicating broadband’s responsible for “x” million new jobs or “y” billion dollars. It is difficult, if not impossible, to draw clear lines between these types of grandiose statements and local economic realities to create good policy.

The other camp, assumptive forecasters, touts economic outcomes that seem reasonable, but whose validity is based on assumptions and anecdotal evidence. Case in point, it is accepted gospel that one big value broadband brings to underserved individuals is it enables them to look for jobs. This assumption is based on observations such as, “you can’t even apply for a job at McDonalds without going on the Internet,” but never addresses how to prep workers for jobs they might find online.

The bold weavers muddy the water with numbers while contributing to some local officials’ and stakeholders’ paralysis as they hesitate to move broadband plans forward until they see numbers that make sense. The assumptive forecasters can motivate individuals and local businesses to take action, but pointing to the wrong or the least valuable economic outcomes raises expectations now that produce disappointments later.

Want to understand broadband’s economic impact? Ask a pro

A better way to jumpstart a real national broadband discussion is to involve more people who best understand how to create economic development assets. I recently conducted a survey in partnership with the International Economic Development Council (IEDC) about what economic development professionals think about broadband. In August IEDC sent an e-mail message with a link to the survey to 7,000 people, and 365 senior managers and staff in economic development departments or agencies completed it.

Because it’s difficult to show a dollar-for-dollar correlation between technology and economic development, communities need other benchmarks and perspectives for assigning economic value. The survey tries to assess those.

Survey respondents critiqued outcomes including how broadband helped attract new businesses to an area, made local companies more competitive, and improved individuals’ ability to earn income. For each outcome, respondents indicated whether wireless and fiber networks had a direct or indirect impact on the outcome, and what minimum data speeds are needed by 2014 to produce these outcomes. These professionals also assessed if and how individuals can use broadband to increase their economic wellbeing.

Reading economic developers’ take on the economic impact of different broadband technologies and speeds gives communities a more accurate basis for decision making than they might get from policymakers defining broadband as 4 Mbps. Most communities don’t look at that as being a real benefit when attracting business to an area for example.

Getting experts involved also helps separate some of the hype from the reality of broadband and economic development. The often-repeated mantra – the Magic Broadband Bullet Theory – that broadband’s big economic value is helping people find jobs, results in national policies and multi-million dollar programs to bring low-income people online. But once they have access, then what?

What’s the value of spending $1 billion dollars a year for the FCC’s $10/month Lifeline program (once it’s reformed to support broadband access) if after five or ten years we’ve done very little to pull people out of poverty? Forty-seven percent of economic developers indicate that money spent for broadband could produce a greater return by helping individuals improve job and professional skills. Another 25 percent see transitioning people from dying industries to 21st century job skills as the broadband potential we should be cultivating. Nearly one in five at 17 percent say using broadband to help people get a better education is the greater value of broadband for personal economic development.

What happens when thousands of Lifeline recipients go online inspired by the rhetoric that they can more easily get a job, only to learn they are not prepared to effectively compete for the jobs they find? Or the broadband infrastructure in their communities is so bad that recipients can’t capitalize on Web-based training and professional development.

Communities across the U.S. want to be the next Chattanooga, Tenn. or Bristol, Va. or Lafayette, La. by bringing a gigabit network to town (by the way, a majority of those surveyed did not select a gigabit as the minimum speed needed). However, to emulate those success stories communities need to understand exactly how broadband impacts local economies. Throwing broadband at a problem isn’t going to change deeper problems. It’s a lever for change, not a magic wand.

Get the abstract and full survey report, “Moving the Needle Forward on Broadband & Economic Development.” See how to connect the dots between the technology and economic outcomes.

Craig Settles is a consultant who helps organizations develop broadband strategies, host of radio talk show Gigabit Nation and a broadband industry analyst. Follow him on Twitter (@cjsettles) or via his blog.

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The Internet is reciprocal, and without other folks with gigabit connections, Jack Studer, a managing partner at Lamp Post, is wondering who the students, developers and hackers that plan to come play on the network will talk to. Sure, the network works inside the town. Studer has described some of the ways it has changed the way he runs his business. But what happens if he tries to build apps and ship them over long-haul networks?

The problem is both a lack of powerful gigabit networks, but also uncertainty about what happens when a large number of people start sending traffic out from Chattanooga’s networks. As a commenter explained in a recent post, a gigabit is only as good as the backhaul coming into it. Which means if I use a gigabit connection and start uploading something to the web at large, only the first mile will be fast. And if an entire town (or a bunch of enterprising developers) finds ways to use the bandwidth on its first mile of access, at some point something might break.

So Studer is looking for the universities, the towns with their own fiber networks, and maybe ISP’s such as Sonic.net or Verizon’s labs to talk to his network. Help him kick the tires a bit and see what happens. So if you have a gig or maybe even 500 Mbps, plus an extra server lying around, give Lamp Post a call. You might be helping build the next generation of connectivity. And how cool would that be?

Image courtesy of Flickr user bgottsab.

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A handful of upstarts, including the likes of Hyperoptic and Gigaclear, want to change that. And one of them, CityFibre Holdings of London, is looking to raise over $800 million to build out a fiber network that reaches nearly a million households in the U.K. and will be capable of offering gigabit-per-second speeds.

The new network would reach public services as well. The proposed network will also reach 50,000 businesses, according to Greg Mesch, the company’s CEO. CityFibre is a metro network operator in what are called in the United Kingdom “secondary towns and cities,” like York, Ayr and Dundee.

The British government has lately become aggressive in its desire to wire up Britain with really fast broadband connections and has pledged close to $900 million to broadband enable its rural areas. BT has a $4 billion investment program in place. Analyst firm AnalysysMason estimates it would cost over $48 billion in order to get every home in the U.K. to get fiber-based broadband.

BT running hard

Earlier this week, BT announced two-thirds of U.K. premises will have access to fiber broadband by the end of 2014, one year ahead of its original target of 2015.  Six million premises already have access to the technology. BT also is planning to increase the headline speed of its fastest fiber broadband product to up to 300 Mbps by spring 2012, and at the same time, also double the speed of its fiber-to-the-cabinet service. I’m sensing the idea of competition is pushing BT to accelerate its plans.

CityFibre’s plan is to not only offer the service on its own, but also to open it up to third-party Internet service providers who could buy on a wholesale level from the company. CityFibre manages fiber network infrastructure for public sector services such as police, healthcare groups and local government in addition to working with universities. They operate seven metro rings, and in the city of Bournemouth, own what is currently said to be the largest fiber-to-the-home project in the U.K. Nearly 24,000 homes there will get super-fast broadband in 2012.

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