The myth of meet-me boxes and expensive drops

Submitted by acohill on Thu, 02/18/2016 - 15:30

We are working with a medium-sized city to design a new open access Gigabit fiber network, and the local telephone company is claiming that the connection from the street to the office building (in the downtown area) is "the most expensive part of reaching the customer."

So they are pushing for "meet-me" boxes outside of the downtown buildings, which would terminate fiber from the buildings into a fiber patch panel, and calling this open access.

Well, it is, after a fashion, but meet-me boxes favor the companies that already have fiber in the street or the alley. Any competitive provider that does not already have that advantage would have to spend a lot more money to get their fiber to the meet-me box. So the phone company cleverly "supports" open access by touting a solution that gives them a huge competitive advantage and effectively locks out most competition.

In fact, it is worse than that, because in this city there is a second provider that also has some fiber downtown, and they also like the meet-me box solution. Of course they do. The two companies would get an effective lock on the business market downtown and would be able to maintain their existing cartel-like pricing.

So this brings us to the notion that the fiber cable between the street and the building is the "most expensive part" of the network. It is not. As a general rule of thumb, it represents between 20% and 35% of the cost of a new build, and could be even less than 20% if the drop is made from a pole in the right of way to the side of the building (could be as low as 5% to 10% of the total build cost).

The incumbents are really stuck on "owning the customer." But the world is changing.

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